Earnings Results: Block’s stock rallies as upbeat earnings outlook comes as a relief

by | Feb 23, 2023 | Stock Market

Shares of payment-technology company Block Inc. turned around and were rallying sharply in after-hours action Thursday, with one analyst noting that the company’s forecast likely came as a relief. The company reported a fourth-quarter net loss of $114 million, or 19 cents a share, whereas it posted a net loss of $77 million in the year-prior quarter.

On an adjusted basis, Block
earned 22 cents a share, down from $1.05 a share a year before, whereas analysts were modeling 30 cents a share. The company also posted adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) of $281 million, ahead of the FactSet consensus, which was for $227 million. For the full year, executives at Block anticipate $1.3 billion in adjusted earnings before interest, taxes, depreciation and amortization (Ebitda), which was in line with the FactSet consensus. The company is also targeting gross profit of 25% for the combined company, versus 22% in the fourth quarter of 2022. Shares of Block, the company formerly known as Square, were up nearly 8% in after-hours trading Thursday. That movement likely “can be owed to strong gross profit trends and adjusted Ebitda guidance meeting buy-side expects despite uncertainty into the print,” wrote Wolfe Research analyst Darrin Peller in a note to clients. Block’s fourth-quarter revenue increased to $4.65 billion, up 14% from a year before, whereas the FactSet consensus was for $4.63 billion. With Block, however, analysts generally look at the company’s gross pro …

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