Rough Day For Markets, But Good Q2 Earnings After The Close

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Markets got pummeled today, not on Q2 earnings results or Weekly Jobless Claims, which were mostly terrific, but on international spot oil prices — Brent crude — crossed the psychologically important $100 per barrel (/bbl), up +7% today. West Texas Intermediate (WTI) rose over +6% to $92/bbl. A dozen straight days of bombing Iran and now the Yemen-based Houthis attacking Saudi ships have turned our “four to six week war” into a sinking albatross now five months along.

The Dow shed another -506 points today, -0.97%, while the S&P 500 did even worse: -90 points or -1.21%. The tech-heavy Nasdaq was the worst of the worst today — -553 points, -2.15% — while the small-cap Russell 2000 slid by only down -19 points, -0.67%. Part of this pullback in tech stems from the extraordinarily large AI capex spending from companies like Alphabet (GOOGL - Free Report), which reported negative cash flow for the first time in its publicly traded history.

Intel Shines in Q2, FIX and DECK Also Report Earnings

Chip-making giant and Zacks Rank #1 (Strong Buy) Intel (INTC - Free Report) may have just posted the strongest quarterly numbers in this Q2 earnings season: 42 cents per share doubled the 21 cents in the Zacks consensus, which itself was a +310% earnings growth increase from the -$0.10 per share reported in the year-ago quarter. Revenues in the quarter grew +25% year over year to $16.1 billion, well above the $14.41 billion analysts were estimating — the company’s strongest revenue growth in 15 years.

Guidance for the present quarter also impressed: Intel is looking for $0.31-0.38 per share in Q3, well above the $0.25 expected. Revenues of $15.8-16.8 billion is much stronger than the $15.08 billion consensus estimate. Gross margins are projected to come in at +42%. Intel CEO Lip-Bu Tan called it “unprecedented demand for compute.” Shares of INTC raced higher by +11% after the release, but has since simmered down to +5.5% growth.

Another AI tech firm also reported “unprecedented,” record-setting results in its Q2 report this afternoon. Comfort Systems (FIX - Free Report) — no, not a mattress company; they provide cooling systems to the AI chips — reported earnings of $12.53 per share, nicely ahead of the $10.38 estimate from analysts. Revenues of $3.27 billion surged +50.3% year over year, well above the $2.94 billion in the Zacks consensus. These are all record numbers for the company, as is crossing over $1 billion in cash flow in the quarter. Shares are down a tad in the after-market, but are up +96% year to date.

Shoe brand parent Deckers Outdoors (DECK - Free Report) also outperformed on earnings after today’s closing bell, but much more modestly: earnings of 94 cents per share versus 88 cents expected. Revenues just met estimates of $1.02 billion in the quarter. Full-year earnings guidance was in-range with earlier forecasts. The Hoka running shoe grew +7.7% in the quarter while UGG gained +4.9%. All other brands collectively were down -18.1%. Shares are down -7% on the news, doubling the company’s losses year to date.