Featured Earnings Reports This Week
The coming week will contain over 400 public companies releasing their quarterly earnings statements. Here are some of the biggest market movers and hottest stocks reporting this week to watch.
Monday Netflix (NFLX)
After reaching all time highs in early March Netflix has plummeted nearly 25% as the market experienced a broad rotation out of high growth momentum tech stocks into more conservative value oriented dividend paying equities. Shares surged last quarter after Netflix beat EPS expectations by 13c per share. Look for big revenue growth Monday and there are whispers that the company may announce a raise in subscription prices which could translate to a significant boost in future profitability.
Tuesday VMware (VMW)
VMware is an American software company that specializes in cloud and virtualization technology and services. Over the past 2 years VMware has enjoyed steadily growing revenue and profitability. This quarter the Estimize community expects slightly better numbers out of WMware than Wall Street does on both the top and bottom line.
Tuesday McDonald’s (MCD)
On Tuesday earnings reports from both McDonald’s and Yum! Brands may indicate who has drawn first blood in the fast food breakfast wars. Taco Bell recently rolled out a breakfast menu while McDonald’s countered by offering a free coffee promotion. With the United States going through a shift away from greasy fast food McDonald’s has done a pretty good job to keep its menu fresh and offer healthy alternatives like oatmeal, salads, and yogurt. This quarter profit is expected to fall while revenue is predicted to rise compared to FQ1 of last year.
Tuesday Yum! Brands (YUM)
Yum! Brands is the parent company of Taco Bell, KFC, Pizza Hut, and other restaurant chains. Launching a breakfast menu at Taco Bell was perhaps the biggest announcement of the quarter from Yum!. None of Yum!’s other restaurants served a breakfast menu and this quarter Yum! is attempting to challenge McDonald’s on breakfast as well as Dunkin’ Donuts and Starbucks who both enjoy significant morning food sales.
Tuesday Intuitive Surgical (ISRG)
Intuitive Surgical is the producer of the da Vinci Surgical System. The da Vinci system is an innovative healthcare product which helps perform surgeries robotically. Intuitive Surgical stock spiked in early April above $540 before steeply selling off and seeing a price drop of over $125 per share.
Wednesday Apple (AAPL)
Apple is one of the most well covered stocks on the Estimize platform, as of Friday 105 estimates had already been submitted. The iPad, iPhone, and iPod maker is still holding on to a war chest of cash and it’s been a long time since they’ve released a new product line. With no new products to boost earnings and sustained pressure from activist investor Carl Icahn, Apple may announce another share buyback to further reduce its cash position. Despite not having any product launches Apple is expected to slightly outperform the corresponding quarter from last year.
Wednesday Facebook (FB)
The social network has made 2 blockbuster acquisitions this quarter. In February Facebook announced a shocking decision to spend $19 billion on mobile instant messaging company WhatsApp and another $2 billion on virtual reality company Oculus VR. As covered in detail last week Zuckerberg is continuing to unbundle Facebook from one big blue app into easier to use mobile apps that provide best in class user experiences within individual product verticals. Last quarter Facebook did a great job of monetizing on mobile and the Estimize community expects another great quarter from the social network on Wednesday.
Wednesday QUALCOMM (QCOM)
QUALCOMM is an American global semiconductor company that produces and designs products and services for telecommunications devices including high end smart phones. Smartphones have been booming lately and QCOM stock is up 10% since the start of 2014 alone, which is especially impressive considering the broad sell off in tech stocks. The Estimize community expects QUALCOMM to beat Wall Street’s EPS consensus by 4c per share and revenue expectation by over $100 million. The market has sky high expectations for QUALCOMM to live up to.
Wednesday Zynga (ZNGA)
Zynga is an social and online games company most well known for its Farmville franchise. Within the past week Zynga launched Farmville 2: Country Escape, the first Farmville game to launch on mobile. Ex-Microsofter CEO Don Mattrick who took over 10 months ago is betting big on mobile and wants to compete with Candy Crush maker King Digital Entertainment who took in $1.9 billion last year. Zynga has been in a state of consistent decline and will need the new Farmville game to be a smash hit to get back on track.
Thursday Microsoft (MSFT)
This quarter CEO Satya Nadella made a breakthrough announcement that for the first time ever Microsoft Office will be sold on the iOS operating system. Historically the war was always between Windows and Apple operating systems, but today the battles are being fought over mobile where Apple’s iOS is going head to head with Google’s Android OS. It appears that Nadella will continue to shift Microsoft toward becoming a cloud services and software as a service provider. Last quarter Microsoft reported much higher EPS and better revenue than the Street had called for and contributing analysts on the Estimize.com platform expect similar results Thursday.
Thursday Amazon (AMZN)
Amazon is a notoriously low margin electronic and online commerce company. They sell just about anything a shopper could ever want on Amazon.com and provide a variety of other offerings including Amazon Prime and Amazon Web Services. Amazon, like Google, has a history of heavily reinvesting profits back into the company, so EPS can often be difficult to estimate. During the holiday season Amazon reported significantly lower EPS than the Street was looking for and failed to live up to the high revenue growth expectations. This quarter the Estimize community is looking for 22% yoy revenue growth and an EPS increase from 18c to 27c.
Thursday Baidu (BIDU)
Baidu is the number one search engine in the world’s most populated country and is often called the Google of China. Wall Street is expecting flat profit compared to last year alongside a 53% increase in revenue. Meanwhile the Estimize community is looking for EPS to grow from 95c to $1.04 and for revenue to come in lower than the Street is expecting.
Thursday Visa (V)
Visa beat Wall Street expectations on both EPS and revenue last quarter on increased credit and debit card usage. The Estimize community nailed the beats on both lines and are expecting beats of similar magnitudes this quarter. Mobile and electronic payments are a hot industry and products like Facebook’s new mobile payments system and bitcoin may threaten Visa’s high transaction fees in the future, but for now more success is expected from the credit and debit card provider.
Thursday Starbucks (SBUX)
Last quarter there was some concern that Starbucks sales might be down because of the weather and lower customer traffic in shopping centers where many Starbucks stores are located. As it turned out Starbucks did come up short on revenue, but also managed to top profit expectations. This quarter the Estimize community is predicting that Starbucks will beat Wall Street’s EPS consensus but miss on sales for a second consecutive period.
Thursday Pandora (P)
Pandora, one of the biggest players in streaming music, is expected to see a drop in revenue growth compared to recent quarters. In each of the past 9 quarters Pandora’s revenue has grown on a year over year basis between 50% and 60%, but this quarter the Estimize community is only looking for 41.7% growth. 41.7% revenue growth is no small feat, although the community does expect Pandora to post a loss of 7c per share.
Thursday Under Armour (UA)
High performance clothing manufacturer Under Armour is set to report on Thursday. The company’s stock has been on fire but like many other growth stocks it has sold off sharply since mid March. Throughout the quarter Wall Street has taken its EPS estimates down slightly while the Estimize revenue projection has advanced steadily.
Thursday Caterpillar (CAT)
Last quarter Caterpillar reveserved 3 consecutive months of earnings misses by crushing analyst estimates on both the top and bottom line. Recently Caterpillar found itself under fire from congressional committees for restructuring to avoid $2.4 billion in taxes. The company has not found been found responsible for any wrong doing and the stock has soared from $83.32 in late October to a current valuation of $102.83. The Estimize community is predicting year over year decline but a beat relative to the Wall Street consensus.
Friday Ford (F)
Ford is the final major earnings report of the week. Over the past month all eyes on the automotive industry have focused on the General Motors recall and investigation. Ford stock is currently trading at $16.00 which is higher than where it began the year, but lower than highs from early April. We are seeing a big delta on EPS between Estimize and Wall Street as well as a moderate differential on revenue expectations.
What is Estimize?
Estimize.com is a free open online platform that allows users to contribute their own financial forecasts. The contributor base ranges from hedge fund analysts, asset managers, independent research shops, non professional investors, academics to students. By tapping into the wisdom of the crowd Estimize has created a data set that is more representative of actual market expectations and is more accurate than the traditional Wall Street consensus up to 69.5% of the time.