The revenue season for Wall Street's third quarter will accelerate in the coming days. Investors are bracing for another difficult reporting season given the negative impact of the ongoing coronavirus crisis on various sectors and industries.
The worst affected sectors are expected to be sectors, with earnings declines of more than 120%, followed by an expected decline of 61.5%. In comparison, corporate earnings are expected to decline only 2.5%.
Not surprisingly, the Invesco QQQ ETF (NASDAQ 🙂 – which tracks the performance of 100 of the largest non-financial stocks listed on the US – is trading near its all-time high, up nearly 34% this year, compared to the 6.5% increase over the same period.
As such, much will be at stake as the five major, megacaptured technology companies report their respective results in the coming days.
1. Alphabet: Reports Oct. 26 After Markets Close
Estimated earnings per share: + 10.1% on an annual basis
Estimated revenue growth: + 5.4% year on year
Google parent Alphabet (NASDAQ :), (NASDAQ 🙂 saw its stock lag behind those of the other four Big Tech stocks, and & # 39; only & # 39; Up 16% since the start of the year as jitters over reduced ad spend have continued to put a lid on the search giant's profits.
GOOGL – which hit a record high of $ 1,725.65 on September 2 – ended Tuesday at $ 1,551.08. It has a market capitalization of $ 1.05 trillion, making it the fourth most valuable company listed on the US stock exchange.
Google exceeded second-quarter expectations in late July, but still suffered its first-ever year-on-year revenue decline due to the negative impact of COVID-19 on its advertising business.
Consensus calls on Mountain View, California-based tech giant to report earnings per share of $ 11.15 per share, an improvement from earnings per share of $ 10.12 a year earlier. Sales are expected to be $ 42.68 billion, up from $ 40.5 billion in the same quarter a year earlier.
The main question for investors is whether the worst is lagging for Alphabet's core search and ad revenue business, which saw a decline of nearly 10% year-on-year in the previous quarter. YouTube's ad revenue growth, which also slowed in the last quarter, will be closely monitored.
Alphabet's lucrative Google Cloud Platform is one segment to be prepared for another quarter of blockbuster growth. In the second quarter, revenues from the operation increased 43% to $ 3.01 billion.
In addition, investors will be happy to receive more information on recent news that the US Department of Justice will file an antitrust suit against Google. Part of the suit will look at allegations that the company is monopolizing its internet search to stifle competition.
2. Microsoft: Reports Oct. 27 After Markets Close
Estimated earnings per share: + 11.6% on an annual basis
Estimated revenue growth: + 8.2% year on year
Microsoft (NASDAQ 🙂 thrived during the coronavirus crisis, with the technology giant facing increasing demand for its cloud-based services amid the shift to work-from-home.
The Redmond, Washington-based company has seen its stock increase by about 36% since the beginning of the year. The shares, which hit a record high of $ 232.86 on September 2, were settled at $ 214.65 yesterday. With a market capitalization of $ 1.62 trillion, Microsoft is the second most valuable company in the world.
Microsoft, whose last quarter earnings and revenue projections are expected to post earnings per share of $ 1.54 per share, up from $ 1.38 in earnings per share in the same period a year ago. Sales are expected to total $ 35.77 billion, 8% more than sales of $ 33.06 billion in the same period a year earlier.
In addition to the top and bottom line numbers, investors will focus on growth in Microsoft's Intelligent Cloud segment, which includes Azure, GitHub, SQL Server, Windows Server and other business services. Microsoft's commercial cloud revenues grew 17% year-over-year to $ 13.4 billion in the most recent quarter, while revenues from Azure services grew 47%.
Another important measure that we focus on is how well Microsoft's Productivity and Business Processes unit performed. The main segment includes the Office 365 cloud productivity suite, Teams communications app, LinkedIn (NYSE :), as well as Dynamics products and cloud services.
Microsoft's booming gaming unit, which has benefited from increased demand in a stay-at-home environment, will also be closely watched, with the upcoming November 10 release of the next generation Xbox console expected. revenue growth in the quarter before lead.
3. Apple: Reports Oct. 29 After Markets Close
Estimated earnings per share: -8.2% on an annual basis
Estimated revenue growth: -0.3% year on year
Apple (NASDAQ :), which approved a four-for-one stock split last quarter, largely drove high this year as lockdowns around the world led to strong demand for its subscription services, including iTunes Music, Apple TV + and Apple Arcade.
Stocks of Apple are up about 60% this year. The stock, which hit a record high of $ 137.98 on September 2, dropped to $ 117.51 ??on Tuesday. It has a market capitalization of $ 2.01 trillion, making the Cupertino, California-based technology and consumer conglomerate the most valuable company trading on the US exchange.
Consensus calls on Apple – whose revenues and revenues were in the last quarter – to report earnings per share of $ 0.71 for the fiscal fourth quarter, about 8% lower than the same period a year ago. Revenue is expected to decline 0.3% from the same period a year earlier to $ 63.85 billion as some aspects of the business have been affected by the coronavirus.
While Apple no longer reports individual sales of its product range, many will be happy to hear if the company will provide insight into the initial impact of the iPhone 12, which was available for pre-order earlier this month.
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Updates on the growth of the iPad and Mac business will also be of interest to investors, as both have performed well in a stay-at-home environment, with sales growth of 31% and 26.1% year-on-year. respectively in the last quarter.
More importantly, investors hope that Apple will provide direction for the next quarter, as this is usually lucrative due to holiday spending. The iPhone giant was unable to forecast this quarter's results when it released its Q3 numbers due to uncertainty about the virus's impact on its business.
4. Amazon: reports October 29 after close markets
Estimated earnings per share: + 72.3% on an annual basis
Estimated revenue growth: + 32.3% year on year
Widely regarded as one of the biggest beneficiaries of the COVID-19 crisis, Amazon (NASDAQ 🙂 has significantly outperformed the broader market this year, up nearly 75% as Americans move towards online shopping accelerated.
Shares of the Seattle, Washington-based company, which hit a record high of $ 3,552.25 on September 2, closed at $ 3,217.01 last night. With a valuation of $ 1.61 trillion, Amazon is the third most valuable company listed on the US stock exchange.
Amazon – whose second-quarter results erupt in late July – is expected to print earnings per share of $ 7.29, year-over-year growth of about 72% over earnings per share of $ 4.23. Revenue is expected to increase 32% from the same period last year to $ 92.57 billion, reflecting the strength of both e-commerce and cloud computing.
Investors will continue to focus on the company's thriving cloud computing business to see if it can sustain its scorching growth rate. Amazon Web Services revenues grew 29% to $ 10.8 billion in the second quarter, cementing its position as a leader in the cloud computing space ahead of Microsoft Azure and Google Cloud.
The growth of the Subscription Services division, which primarily includes Amazon Prime and its 150 million paid members, will also be in the spotlight. Numbers from this segment were up 29% in the previous quarter to $ 6.02 billion.
Looking ahead, investors will be looking for advice on Amazon's earnings and operating income for the main fourth quarter, which includes the Christmas shopping season. Analysts expect the e-commerce and technology giant to deliver fourth-quarter sales of $ 111.4 billion, up 27% from the year-earlier quarter.
5. Facebook: Reports October 29 after markets close
Estimated earnings per share: -11.3% on an annual basis
Estimated revenue growth: + 11.6% year on year
Facebook (NASDAQ 🙂 has enjoyed a surge in demand in its family of social media apps, including Instagram, Messenger, and WhatsApp, as a result of ongoing restrictions to social distance. Not surprisingly, all three platforms have a growing audience, given that the social network now has 3.14 billion members.
While Facebook stock has outperformed the broader market this year, it has outperformed many of its biggest rivals. Concerns about reduced ad spend due to an ongoing ad boycott coupled with COVID-19 related disruptions in the ad industry, limited profits.
Facebook stock, which is up 30% since the start of the year, ended at $ 267.56 yesterday. At its current level, the Menlo Park, California-based social media giant is valued at $ 762.2 billion, making it the smallest of the five major technology companies and the only one with a market cap of less than $ 1 trillion.
Facebook, which reported second-quarter earnings and sales, is expected to post earnings per share of $ 1.88 for the July-September period, down 11.3% from earnings as of share of $ 2.12 in the same quarter a year earlier. However, revenues are expected to increase 11.6% from the same period last year to $ 19.7 billion, driven by strong demand for remote work-from-home software products
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In addition to top-and-bottom-line numbers, investors will be waiting for more on the continued impact of the COVID-19 outbreak on ad revenue for the remainder of 2020 and beyond. Facebook's 10% year-on-year growth in ad revenue in the second quarter represented a slowdown from its 17% increase in the first quarter of this year.
