US Stocks: Earnings Summary (Feb 7)
US stock markets were under pressure this week, with the S&P 500 index falling -0.63%. The peak of earnings season revealed a clear pattern: investors are no longer forgiving weak future guidance, punishing missteps harshly. Conversely, companies that demonstrated improved profitability through cost savings were generously rewarded. RYTM's analysis helps cut through the noise and focus on the numbers that truly matter.
What happened: Revenue grew explosively by 123%, but the operating profit margin fell sharply, raising concerns about the quality of growth. Why: Demand for AI servers is at a record high, but production costs and lower-margin large customers are eating into profitability. Weekly result: +1.8% (high volatility)
What happened: The company unexpectedly fell to a loss and drastically cut its 2026 profit forecast. Why: Medical costs spiraled out of control, especially in the Medicaid and Marketplace segments, indicating deeper issues in cost management. Weekly result: -25.5% (crash)
What happened: The luxury goods maker's operating profit grew by 45.2%, significantly beating analyst expectations. Why: The strength of the Coach brand and a successful pricing strategy compensated for weakness in other brands and improved margins. Weekly result: +6.2% (strong rally)
What happened: The cosmetics giant's operating profit recovered from a loss to a profit (+169%), demonstrating the success of its turnaround plan. Why: Strict cost-cutting and efficiency improvements are working, but new tariff warnings overshadowed the positive picture. Weekly result: +2.9% (fell after results)
What happened: Operating profit growth accelerated to 22.4%, and the company raised its growth forecast for the data center segment. Why: There is explosive demand for AI and data center power solutions, which is supporting margins. Weekly result: +6.4%
What happened: Operating profit remained stable despite a slight decline in revenue; the sale of its aerospace unit was announced. Why: Strict cost discipline and asset sales to reduce debt gave investors confidence in the success of the turnaround. Weekly result: +5.6%
What happened: Operating profit grew by 22%, but the growth rate slowed, and the future guidance was disappointing. Why: Sales were strong, but the 2026 growth expectations fell short of the high bar set by investors. Weekly result: +1.0% (dropped after results)
What happened: Operating profit grew by 13.8%, standing out positively from competitors struggling with costs. Why: A strong performance from the Evernorth pharmacy unit managed to cover increased medical costs on the insurance side. Weekly result: +2.6%
What happened: Operating profit growth accelerated to 15.8%, and the company provided strong guidance. Why: Business payment volume grew robustly, and the company sold non-strategic units to focus on profitability. Weekly result: +18.0%
What happened: Operating profit turned from a decline to 7.8% growth, exceeding expectations. Why: Restructuring and cost savings have started to bear fruit, improving profitability despite modest revenue growth. Weekly result: +16.3%
What happened: Operating profit growth accelerated to 9%, driven by digital services. Why: The Dow Jones business unit and digital real estate services showed strength, but the stock fell due to general market sentiment. Weekly result: -6.4%
What happened: Operating profit fell by 42.5%, but the result was better than feared. Why: Demand is weak, but cost-cutting helped avoid the worst. The merger with Qorvo is under regulatory investigation. Weekly result: +5.3%
Conclusion
In summary, the week showed that revenue growth alone (as in SMCI's case) is not enough—investors demand profitability and confidence in the future. Molina's crash and Tapestry's rally vividly illustrate how the market separates winners from losers. In the coming weeks, it will be worth watching whether the cost-cutting trend continues and how companies respond to changing economic conditions. RYTM will be keeping a close watch.
RYTM content is for informational purposes only, not financial advice or recommendations. You are solely responsible for your investment decisions. Always consult a professional.