Zoom founder Eric Yuan speaks before the opening ceremony of the Nasdaq on April 18, 2019 in New York City.
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Shares of Zoom rose 16% in extended trading on Monday after video chat software provider reported higher-than-expected earnings for the first quarter and released an optimistic forecast for the second period.
Here’s how the company did:
- Income: According to Refinitiv, $ 1.03 per share against 87 cents per share, analysts expected.
- Income: According to Refinitiv, $ 1.07 billion versus $ 1.07 billion, analysts expected.
Zoom justified past analysts ’earnings estimates for the quarter and gave recommendations for profitability for the current quarter and full year that were well above expectations. This suggests that the company may reduce costs as growth slows. Investors are looking for technology companies that can make a profit when they move into stocks that can better withstand rising inflation and interest rates.
At the beginning of the report Zoom was a struggle for shareholders. After five consecutive quarters of three-digit revenue growth during the pandemic, Zoom is now looking forward to a much slower expansion and correction of the market that most affected stocks to “stay home”.
As of Monday’s close, Zoom shares were down about 85% from a peak in October 2020, including more than 50% this year.
Revenue growth for the period ended April 30 was 12%, compared to nearly 200% in the same quarter a year earlier.
Now in the second quarter, Zoom expects revenue of 1.115 billion to 1.12 billion dollars, an increase of at least 9.2%. Analysts expected growth of 8.7% to $ 1.1 billion, according to Refinitiv. The company expects earnings per share in the range of 90 cents to 92 cents, which is above the 87 cents estimated by analysts.
For the full fiscal year, Zoom expects revenue of $ 4.53 billion to $ 4.55 billion against the $ 4.55 billion expected by analysts. According to Refinitiv, it expects earnings of $ 3.70 to $ 3.77 per share against the $ 3.53 that analysts expected.
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