5 Stocks With Surprisingly Strong Q4 Earnings

Companies such as Tesla, Uber and Airbnb have beaten analysts' expectations in the current earnings season.
Steven Porrello
By Steven Porrello 
Published
Edited by Rick VanderKnyff
Tesla Shanghai Gigafactory (Photo by Xiaolu Chu/Getty Images)

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We’re midway through the fourth-quarter earnings season — that special time when companies tell us how they performed the year before — and so far there’s been a healthy amount of good news. 

Notwithstanding a sluggish economy in 2022, several companies — like Tesla, Uber and Airbnb — performed exceptionally well, beating analysts’ predictions on bottom- and top-line numbers. 

To be sure, a strong Q4 earnings report doesn’t mean the company will repeat that quarter’s performance in 2023. What it does mean, however, is the company is fighting to adapt to new circumstances and might be a good contender against rising interest rates and investor pessimism.   

With that in mind, let’s look at how five companies beat analysts’ estimates and what that means for 2023. 

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Tesla

  • Date released: Jan. 25, 2023  

  • Summary of Q4 earnings report: Tesla reported higher earnings and revenue than last year (Q4 2021). They also achieved their highest-ever quarterly revenue, operating income and net income. 

  • How it beat expectations: 

Earnings detail

Reported numbers

Consensus estimates

Q4 revenue

$24.32 billion.

$24.16 billion.

Earnings per share (EPS)

$1.19.

$1.13 to $1.15.

  • Why some investors are bullish: 

    • Tesla delivered 405,278 EVs in Q4, up from 308,600 in the same period last year. 

    • The company can now produce 2 million EVs per year across all factories. This puts them on track to produce a record-high number of EVs in 2023 (currently the record is 1.37 million). 

    • Musk claims demand for Teslas escalated in January 2023 after the company cut prices on its EVs late last year. 

  • Why some investors are bearish: 

    • Tesla reported a lower gross margin (25.9%) than Q4 2021 (30.6%). This means Tesla is retaining less sales revenue after deducting the costs of producing vehicles. 

    • Tesla suspended production in December at its Shanghai plant, which produces roughly 750,000 EVs per year. 

    • Problems with Tesla’s driver-assistance software has led the company to recall 360,000 vehicles 

Uber

  • Date released: Feb. 8, 2023 

  • Summary of Q4 earnings report: Uber had its strongest quarter yet. Revenue was up 49% year over year, with more ride-shares and deliveries completed than any previous quarter. The platform had 131 million customers (11% increase) and 5.4 million drivers — an all-time high. 

How it beat expectations:

Earnings details

Reported numbers

Consensus estimates

Revenue

$8.6 billion.

$8.49 billion.

Earnings per share (EPS)

$0.29.

$0.18.

Earnings before interest, taxes, depreciation, and amortization (EBITDA)

$665 million.

$620 million.

  • Why some investors are bullish: 

    • Uber hit a company milestone: 2 billion trips were completed within a single quarter for the first time. That’s roughly 23 million trips per day. 

    • Active drivers hit an all-time high of 5.4 million. 

    • Uber is not seeing a decline in consumers, despite rising costs in food and transportation. The reported 131 million consumers is up 11% year over year. 

    • Company expects gross bookings to increase between 20% to 24% in Q1 2023. 

  • Why some investors are bearish: 

    • Uber’s freight segment (roughly 17.8% of Uber’s Q4 revenue) could face problems in 2023. The company expects freight volume to decline slightly in 2023, especially if consumers buy less and producers ship fewer items. 

Palantir

  • Date released: Feb. 13, 2023 

  • Summary of Q4 earnings report: Palantir, a data analytics company, reported higher revenue from all business segments. Revenue from government clients rose 23% year over year, while revenues from commercial customers was up 11%. 

  • How it beat expectations: 

Earnings details

Reported numbers

Consensus estimates

Revenue

$509 million.

$502.3 million.

Earnings per share (EPS)

$0.04.

$0.03.

  • Why some investors are bullish: 

    • The company achieved profitability in the fourth quarter for the first time in its history.   

  • Why some investors are bearish:  

    • Palantir’s projections for Q1 2023 are lower than what analysts are expecting: $503 million to $507 million versus $520.28 million. 

Airbnb

  • Date released: Feb. 14, 2023 

  • Summary of Q4 earnings report: Airbnb reported its first profitable year and had its best market day yet. Revenue and net income were higher for both the fourth quarter and the full 2022 year. The company reported more bookings and nights experienced in 2022 than in 2021. 

  • How it beat expectations: 

Earnings details

Reported numbers

Consensus estimates

Revenue

$1.90 billion.

$1.86 billion.

Net income

$319 million.

$184 million.

Earnings per share (EPS)

$0.48.

$0.25 - $0.27.

Earnings before interest, taxes, depreciation, and amortization (EBITDA)

$506 million.

$434 million.

  • Why some investors are bullish: 

    • Airbnb was profitable for the entire 2022 year — the first in its history. 

    • This is the sixth time in the last eight quarters that Airbnb has beaten analysts’ expectations. 

    • The travel sector is expected to grow in 2023, just slightly below its last boom year in 2019. More growth in the sector could lift vacation rental companies like Airbnb. 

  • Why some investors are bearish: 

    • Nights and experiences booked were below analysts’ expectations — 88.2 million reported versus 90.1 million. 

    • The company closed operations in China, effectively losing 150,000 listings. 

    • Active listings continue to decline year over year. In 2022, the company had roughly 6.6 million listings; that was fewer than the 8.5 million it had in 2021.  

TripAdvisor

  • Date released:  Feb. 14, 2023

  • Summary of Q4 earnings report: Q4 revenue was 47% higher than the year before. Total revenue for 2022 was also higher than expected, roughly 65% more than 2021. 

How it beat expectations:

Earnings details

Reported numbers

Consensus estimates

Q4 revenue

$354 million.

$344 million.

Earnings per share (EPS)

$0.16.

$0.04.

2022 revenue

$1.49 billion.

$1.48 billion.

  • Why some investors are bullish: 

    • Tripadvisor’s 2022 Q4 revenue ($354 million) was slightly higher than its 2019 Q4 revenue ($335 million), showing the company has bounced back to its pre-pandemic highs. 

  • Why some investors are bearish:  

    • The company didn’t provide forward guidance for 2023. Some experts took this to mean that TripAdvisor would aim to maintain current margins rather than focus on growth. 

The author owned shares in Tesla and Airbnb at the time of publication.

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