We may be deep in the doldrums of this earnings season, but Thursday was a big day.
Four more S&P 500 names stepped up to the plate yesterday - spanning communication equipment, farm and heavy machinery, luxury goods, and packaging - and the scoreboard was all red.
A couple of the reports were from industry behemoths, while the other two were from significantly smaller names.
The market was already on edge after fresh economic data rattled investors Thursday morning, and a sharp outside reversal in the 10-year U.S. yield (+1% on the day) only added to the selling pressure.
For the bulls, it was a tough session, with every reaction skewing negative.
Here are the latest earnings stats from the S&P 500 👇
*Click the image to enlarge it
The $275B provider of networking hardware and software, Cisco Systems $CSCO, had a -1.43 reaction score after reporting a double beat.
They reported revenues of $14.67B, versus the expected $14.62B, and earnings per share of $0.99, versus the expected $0.98.
The $130B heavy machinery manufacturer, John Deere $DE, had a nasty -4.63 reaction score after reporting a double beat. This was the worst earnings reaction in 14 quarters.
Their revenue and EPS actuals met the market's expectations.
Now let's dive into the data and talk about the most important beats 👇
CSCO was punished for a double beat 🩸
Cisco Systems fell 1.6% after this earnings report, and here's what happened:
Revenue increased 8% year-over-year, led by the Networking segment, which grew by 12% over the same timeframe.
They reported a record number of AI infrastructure orders from web-scale customers, with two of them placing over $1B each in orders.
The one big disappointment from this report was the forward guidance... Management is being cautious!
In Sunday's column of the Weekly Beat, we highlighted how everything changed for this stock after its Q1 2025 earnings report, which snapped 4 consecutive quarters of negative revenue and earnings growth.
This also sparked a new streak of positive earnings reactions.
We thought Thursday's earnings reaction could potentially push the price toward the .com bubble peak for the first time.
However, the market had other ideas...
This turned out to be a significant setback, not only by snapping a streak of positive earnings reactions, but also in the technicals.
CSCO failed to hold its breakout, so now we expect more range-bound price action between 70 and 66 for the foreseeable future.
DE had its worst earnings reaction in 14 quarters🩸
John Deere fell 6.8% after this earnings report, and here's what happened:
Revenue and net income fell year-over-year by 9% and 26%, respectively.
Worse yet, operating profit fell a whopping 32% year-over-year.
To make a bad quarter worse, the management's guidance was a big disappointment. They expect most business segments to continue declining by double digits.
In Sunday's column of the Weekly Beat, we highlighted how this company has experienced significant top and bottom line declines in 6 consecutive quarters.
Despite that weakness, the stock had been resiliently strong.
Thursday's earnings report wasn't good, and the market has seemingly grown tired of the bad news.
If you're a bull, seeing one of the world's largest industrial players get blasted like this should raise red flags.
This earnings reaction was a textbook bearish gap-n-go from a prolonged consolidation, sparking a new short-term downtrend.
We expect this to lead to further downside this year.
So long as DE is below 500, the path of least resistance is likely to remain lower for the foreseeable future.
Thank you for reading
-The Beat Team
P.S.: At All Star Charts, we don’t just track the tape - we trade it.
Our analyst team is constantly uncovering setups with an asymmetric risk/reward profile.
Breakout Multiplier takes those trades and supercharges them with call options to maximize upside.
