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Important points
- Block shares soared after the company reported unexpected quarterly profits and provided better-than-expected guidance for the current quarter and full year.
- The company said its Cash App business performed well in the quarter, with non-Bitcoin revenue increasing 20% year-over-year, and monthly active trading users reaching 56 million in December.
- Square’s stock price could encounter resistance around $80 from a trend line connecting several notable swing highs over the past 18 months.
Block Co., Ltd.
Source: TradingView.com.
Block (SQ) stock rose after the payments fintech announced unexpected quarterly profits and announced better-than-expected current quarter and full-year forecasts for growth expectations and earnings for its Cash App business. Shares rose more than 13% in after-hours trading. From cost reduction efforts.
The Oakland, Calif.-based company had net income of 2 cents per share in the fourth quarter, compared with net income of 93 cents per share in the year-ago period. Analysts had expected the company to report a loss of 1 cent per share.
Total revenue for the period was $5.77 billion, an increase of 24% year over year. Excluding revenue generated from Bitcoin, the highest value was $3.25 billion, a 15% year-over-year (YOY) increase. In particular, Square’s Cash App business performed strongly in the quarter, with non-Bitcoin revenue increasing 20% year-over-year and monthly active trading users in December rising 9% year-over-year to 56 million. Ta.
Looking ahead, the company expects adjusted earnings for the current quarter to be in the range of $570 million to $590 million, with the lower end of that estimate well above analyst models of $511.76 million. He said that it exceeded the average. For the full year, the company expects adjusted profit of $2.63 billion, beating Wall Street’s estimate of $2.4 billion.
“We have made a number of recent efforts to reduce costs and will now focus on growth,” CEO Jack Dorsey said in the company’s fourth-quarter 2023 letter to shareholders. ” he said. Dorsey also noted that Square has reduced its workforce to fewer than 12,000 employees, adding that it expects staffing levels to remain at current levels until growth is limited. Last November, the company announced it would introduce a 12,000-employee cap as part of a broader cost-cutting program to reduce the load on commercial real estate and automate some processes.
In early January, the 50-day moving average broke above the 200-day moving average on the SQ chart, forming a golden cross buy signal. Recently, in the lead up to the company’s earnings report, prices were unified between his two closely watched metrics. If the stock continues to rise after earnings, the $80 level is worth keeping an eye on. This area could provide resistance from the trend line connecting some notable swing highs over the past 18 months. A breakout supported by volume above this key resistance area could signal the start of a new uptrend.
Square shares rose 13.2% to $76.95 in after-hours trading.
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