Square parent Block (SQ) reported earnings, revenue, operating profit and gross payment volume for the March quarter that missed analyst estimates due to reduced expectations. But the SQ stock rose as analysts focused on the Consumer Cash app and its outlook in the midst of the Afterpay acquisition.
The San Francisco-based Block reported fourth-quarter earnings after the market closed Thursday. The Square share climbed 4.4% to 99.76 in early trading on the stock market today.
While the Square stock missed some calculations, “Importantly, the Cash App began to accelerate again, with gross profit up 11% sequentially, and strong” health “metrics including 1.5 million consumers using direct deposits,” said Lisa Ellis , analyst at MoffettNathanson in a report.
Square income for the first quarter was 18 cents per share on an adjusted basis, down 56% from the same period last year. Analysts had estimated earnings of 20 cents per share.
SQ Stock: Income below expectations
Square said revenue fell 21% to $ 3.96 billion as Cash App transactions for digital cryptocurrency Bitcoin fell. Analysts had forecast revenue of $ 4.14 billion.
Financial analysts also view operating income as a key measure of SQ equities. Operating revenues came in at $ 1.29 billion, up 34%, against estimates of $ 1.30 billion.
Gross payment volume from retail customers rose 31% to $ 43.5 billion, against estimates of $ 45.39 billion.
The results included recently acquired Australia-based consumer loan startup Afterpay.
Post-payment contribution to profit
In a letter to shareholders, management said: “Afterpay contributed $ 92 million in gross profit in February and March, with $ 46 million in gross profit recognized in each of the Cash App and Square.”
Excluding Afterpay, the company said “gross profit was $ 1.20 billion, up 25% year-over-year.”
In Thursday’s ordinary session, the Square share fell 10.5% in the middle of a wide sale on Nasdaq. The SQ share has retreated 50% in 2022 on its way into the earnings report.
If you are new to IBD, you should consider taking a look at the stock trading system and the basics of CAN SLIM. Recognizing chart patterns for issues such as SQ stocks is a key to the investment guidelines.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cyber security and cloud computing.
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