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Tuesday, January 21, 2025
Markets had a strong session on the first full day of President Trump’s second administration. With much to sift through, what with extensive executive orders being passed, the general belief remains that these decisions will ultimately benefit publicly traded companies and the investors who own them. The Dow gained +537 points today, +1.24%, while the S&P 500 was +52 points, +0.88%. The Nasdaq underperformed the field but still gathered +126 points, +0.64%, and the small-cap Russell 2000 led all major indexes, +1.85%.
Indexes have rocketed up from 2025 lows hit a week to a week and a half ago. The Russell is leading the way so far, nearly +4% from the start of the year. This would track with the idea that large tariffs enforced on companies that involve foreign goods would largely miss the mostly domestic small-cap companies in the index. The blue-chip Dow looks to play catch-up with the tech-heavy Nasdaq, which led all major indexes for the two previous years.
Q4 Earnings Better than Expected: Netflix, United, Capital One
Netflix NFLX shares are up +12% following the release of its Q4 earnings numbers after today’s close. Earnings of $4.27 per share outpaced the $4.19 in the Zacks consensus, with revenues of $10.25 billion coming in higher than the anticipated $10.12 billion. Net added subscribers blasted off to +18.9 million in the quarter, way above the 8.9 million projected.
The streaming giant also sees fit to raise its subscription rates: with ads, costs move from $7 per month to $8. Without ads, this goes from $15.49 per month to $17.49, and for Premium service it’s now up $2 to $24.99 per month. There is no subscriber guidance for next quarter; in fact, this is the last quarter Netflix will file subscriber numbers in its earnings reports.
Check out the updated Zacks Earnings Calendar here.
United Airlines UAL shares are up +3.5% in late trading, reflecting a strong Q4 earnings report for the Zacks Rank #1 (Strong Buy)-rated airline. Earnings of $3.26 per share surpassed the $3.01 analysts were looking for (and well above the $2.,00 per share reported in the year-ago quarter). Revenues of $14.7 billion easily bettered expectations of $14.39 billion. Premium revenues grew by +10% in the quarter, followed by +8.7% in International, +7% in Corporate and +5.7% for Domestic air travel.
Capitol One COF also outpaced expectations in its Q4 report released after today’s close, albeit by slimmer margins than the companies above. Earnings beat by a penny to $2.67 per share on revenues of $10.19 billion, modestly ahead of the $10.16 billion analysts were looking for. Loan loss provisions were notably lower than expected — $2.64 versus $3.02 — while Net Interest Income was slightly lower than anticipated. Shares are down slightly on the news, but had shot up +8% year to date.