Communications stocks: all five weekly reports beat EPS, yet shares fell

what happened

According to Seeking Alpha, five communications services companies reported this week, and all of them beat earnings-per-share expectations. On revenue, four exceeded forecasts while one fell slightly short. The sector has lost more than 8% so far this year, while the S&P 500 has gained nearly 12%.

Netflix closed Wednesday 5% lower. Third-quarter revenue of $12.9B matched estimates, but the fourth-quarter outlook of $13.4B came in below analyst expectations. Meta Platforms fell 7% even though revenue rose 26% to a record $64.6B, while costs and expenses climbed 68%. The company now expects capital expenditures of $135B to $145B, with the lower end raised from $130B, though the range stays within the $138B estimate.

AT&T disappointed investors with postpaid phone subscriber additions below expectations. Its shares closed more than 6% lower despite revenue and adjusted earnings above consensus. Alphabet, Verizon and T-Mobile US are scheduled to report next week.

why it matters

Forecasts and spending matter as much as headline profit here. Netflix and Meta show that investors are punishing weak guidance and rapid cost growth even when reported figures beat consensus, which may set the tone for upcoming reports from large tech and telecom companies.

market impact

Communication services stocks: the market reacts sharply to guidance and subscriber metrics, pressuring Netflix, Meta and AT&T shares.

instruments