Earnings to Watch Next Week: Advance Auto Parts, Baidu, Walmart and Magna in FocusFollowing is a list of company earnings scheduled for release February 15-19, along with earnings preview for select companies. Next week’s earnings are probably not much significant for major market movements, but it is adequate to gauge investors’ sentiment.
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Liberty Global, the largest international broadband communications provider, is expected is report a profit of $0.25 per share in the fourth quarter, which represents year-over-year growth of over 110% from the same quarter last year when the company reported loss of $1.98 per share.
The Anglo-Dutch-American multinational telecommunications company is expected to post report a rise in revenue to $3.28 billion, up from $2.98 billion seen in the same period a year ago.
“Liberty offers a complex proposition, but it has also a good story ahead if it’s able to replicate its Dutch merger success (combination of Ziggo & Vodafone) in the UK and Swiss transactions. From here we see two key value drivers: (1) the delivery on deal synergies, and (2) Liberty‘s ability to renew with growth. Meanwhile, 2021 is a transition/integration year,” noted Nawar Cristini, equity analyst at Morgan Stanley.
|LBTYA||Liberty Global Class A Ordinary Shares||$0.25|
|DM||Dominion Midstream Partners||-$0.06|
|OSH||Oak Street Health||-$0.23|
|OMAB||Grupo Aeroportuario Del Centro Nort||$7.07|
Tuesday (February 16)
IN THE SPOTLIGHT: ADVANCE AUTO PARTS, ROYAL CARIBBEAN CRUISES
ADVANCE AUTO PARTS: The leading automotive aftermarket parts retailer is expected is report a profit of $1.97 per share in the fourth quarter, which represents year-over-year growth of over 20% from the same quarter last year when the company reported profit of $1.64 per share.
The company will report a rise in revenue to $2.36 billion from $2.11 billion seen in the same period a year ago.
“Conditions seem supportive for Advance Auto Parts (AAP) to deliver more meaningful margin expansion in 2021 and beyond. Expect in-line Q4 results; the April Virtual Strategy Update represents a more important potential catalyst. We are Overweight as risk/reward screens favourable,” said Simeon Gutman, equity analyst at Morgan Stanley.
“AAP operates in a defensive (recession-resistant) category and has one of the largest long-term EBIT margin expansion opportunities in our coverage (we estimate 300-400 bps over time). COVID-19 slowed parts of AAP‘s transformation but gross and EBIT margin upside from internal initiatives is still expected beginning in 2021. Significant and improving FCF generation plus share repurchases likely to enhance EPS growth. We think the combination of a defensive category, AAP‘s progress generating stable top-line growth, and significant margin upside all make for a positive risk/reward skew.”
ROYAL CARIBBEAN CRUISES: The company which operates over 50 cruise ships on a selection of worldwide itineraries that call on more than 1,000 destinations is expected to report a loss of $5.20 in the fourth quarter, which represents a year-over-year decline of over 450% from the same quarter last year when the company reported a profit of $1.42 per share.
The Miami-based company will report revenue of $35.616 million, down over 98% from $ 2.52 billion seen in the same period a year ago.
“We think the cruise industry will be one of the slowest sub-sectors to recover from COVID-19. Cruising needs not just international travel to return, but ports to reopen, authorities to permit cruising, and the return of customer confidence. We expect cruising to resume in Q2 2021, and expect FY19 EBITDA to return in FY23 given FY22 will be the first normal year, and pricing will likely come under pressure. FY19 EBITDA implies EPS 40% lower given share issue dilution and higher interest expense,” said Jamie Rollo, equity analyst at Morgan Stanley.
“We see debt doubling in FY21 vs FY19 due to operating losses and high capex commitments, and leverage looks high at 6x even in FY23e, so we see a risk more equity might need to be raised.”
|RCL||Royal Caribbean Cruises||-$5.20|
|BKI||Black Iron Inc.||$0.56|
|AAP||Advance Auto Parts||$1.97|
|FQVLF||First Quantum Minera||$0.11|
|CMP||Compass Minerals International||$1.40|
|ACC||American Campus Communities||$0.09|
|KAR||Kar Auction Services||$0.29|
|RPAI||Retail Properties Of America||$0.01|
|SEDG||Solaredge Technologies Inc||$0.66|
|HE||Hawaiian Electric Industries||$0.34|
|VERX||Vertex Inc. Cl A||$0.07|
|EXPD||Expeditors International Of Washington||$1.07|
|AWK||American Water Works||$0.80|
Wednesday (February 17)
IN THE SPOTLIGHT: BIDU
The Chinese tech giant will post sales of $4.46 billion for the current fiscal quarter, up over 7% from $4.15 billion during the same quarter last year.
“Following a sharp recent rally, we maintain our EW rating on an industry-relative basis. Baidu has provided better disclosure and has struck a constructive tone on its AI initiatives. We find it well-positioned in certain industrial applications. We also like its rich cash position and strategic investments,” wrote Gary Yu, equity analyst at Morgan Stanley.
“Our price target reflects materialization of AI investments, but we highlight milder near-term growth vs. peers amid risks from competition. The company is well-positioned to ride the next Internet wave, but patience is needed. Our price target implies 18x consensus 2021e non-GAAP P/E the vs. historical 11-24x trading band since 2019.”
|CRL||Charles River Laboratories||$2.11|
|CHH||Choice Hotels International||$0.64|
|PXD||Pioneer Natural Resources||$0.70|
|JACK||Jack In The Box||$1.74|
|RBC||Regal Beloit Corporation||$1.58|
|BFAM||Bright Horizons Family Solutions||-$0.23|
|SNBR||Scs Group Plc||$1.42|
|UFPI||Universal Forest Products||$0.72|
|AM||Antero Midstream Partners||$0.19|
|WRI||Weingarten Realty Investors||$0.10|
|HPP||Hudson Pacific Properties||$0.05|
|AEL||American Equity Investment Life||$0.97|
|PAAS||Pan American Silver USA||$0.43|
|LOPE||Grand Canyon Education||$1.79|
|CBD||Companhia Brasileira De Distrib||$0.46|
Thursday (February 18)
IN THE SPOTLIGHT: WALMART
Walmart, an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores from the United States, is expected to report a profit of $1.51 in the fourth quarter, which represents year-over-year growth of over 9% from the same quarter last year when the company reported profit of $1.38 per share.
Zacks Research forecasts Walmart‘s Q4 comparable sales to pop 5.2%, with its adjusted EPS set to climb 6.5% to $1.47 a share.
“On the top-line, we think market expectations are for 6-8% US comps, low double-digit Sam’s Club SSS growth, and mid-single-digit International revenue growth. We believe the buy-side is anticipating 40-60 bps of gross margin expansion and 20 bps SG&A leverage, translating to 70 bps of EBIT margin expansion and 25%+ EBIT growth. Overall, the bar for Q4 EPS seems to be in the range of $1.75-1.85,” said Simeon Gutman, equity analyst at Morgan Stanley.
|SYNH||Syneos Health Inc||$1.10|
|RS||Reliance Steel & Aluminum||$1.96|
|FOCS||Focus Financial Partners Inc||$0.77|
|TPH||Tri Pointe Homes||$0.67|
|WAB||Westinghouse Air Brake Technologies||$1.03|
|SHLX||Shell Midstream Partners||$0.33|
|WST||West Pharmaceutical Services||$1.12|
|AVNS||Avanos Medical Inc||$0.21|
|GLPI||Gaming And Leisure Properties||$0.56|
|COG||Cabot Oil Gas||$0.21|
|CWST||Casella Waste Systems||$0.14|
|HST||Host Hotels & Resorts||-$0.42|
|HASI||Hannon Armstrong Sustnbl Infrstr Cap||$0.34|
|RBA||Ritchie Bros. Auctioneers USA||$0.58|
|AG||First Majestic Silver||$0.11|
|ARRY||Array Technologies Inc||$0.05|
|AEP||American Electric Power||$0.79|
|PBR||Petroleo Brasileiro Petrobras||$0.02|
|USM||United States Cellular||-$0.02|
|RY||Royal Bank Of Canada||$1.68|
|TDS||Telephone Data Systems||$0.03|
|GOL||Gol Linhas Aereas Inteligentes||-$0.41|
|NCLH||Norwegian Cruise Line||-$2.31|
|TV||Grupo Televisa Sab||$0.25|
|FMS||Fresenius Medical Care||$0.70|
|PAC||Grupo Aeroportuario Del Pacifico||$0.46|
Friday (February 19)
IN THE SPOTLIGHT: MAGNA INTERNATIONAL
Magna International, one of the largest and most diversified auto parts suppliers in the world, is expected to report a profit of $2.02 in the fourth quarter, which represents year-over-year growth of over 40% from the same quarter last year when the company reported profit of $1.41 per share.
|POR||Portland General Electric||$0.42|
|SRC||Spirit Realty Capital New||$0.18|
|MGA||Magna International USA||$2.02|
|DE||Deere & Company||$2.12|
|HBM||HudBay Minerals Ord Shs||-$0.07|