Earnings to Watch Next Week: IBM, Netflix, Coca-Cola, Twitter, Intel and American Express in FocusFollowing is a list of company earnings scheduled for release July 19-23, along with earnings previews for selected companies. Next week’s earnings are of much significance for major market movements as Q2 is believed to be a quarter of significant recovery, with growth accelerating and the outlook for the coming periods gradually improving.
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The Armonk, New York-based technology company is expected to report its second-quarter earnings of $2.32 per share, which represents year-over-year growth of over 6% from $2.18 per share seen in the same quarter a year ago.
The world’s largest computer firm would post revenue growth of about 1% to $18.24 billion. In the last four consecutive quarters, on average, the company has delivered earnings of over 5%.
The better-than-expected results, which will be announced on Monday, July 19, would help the stock recover its last year’s losses. IBM shares rose about 12% so far this year.
“We expect IBM to marginally beat the consensus estimates for revenues and earnings. The company has reported better than expected earnings figures in each of the last four quarters while revenue beat consensus in three of the last four quarters,” noted analysts at Trefis.
“In the past year the company has increased its investment in R&D and capex and since October has acquired seven companies focused on hybrid cloud and AI. As the pace of vaccination increases and countries are opening up, we expect the momentum to continue in the second-quarter FY2021 results as well. Our forecast indicates that IBM’s valuation is around $140 per share, which is in line with the current market price of $140.”
|JBHT||J B Hunt Transport Services||$1.57|
|ELS||Equity Lifestyle Properties||$0.28|
Tuesday (July 20)
IN THE SPOTLIGHT: NETFLIX, UNITED AIRLINES HOLDINGS
NETFLIX: The California-based global internet entertainment service company is expected to report its second-quarter earnings of $3.18 per share, which represents year-over-year growth of 100% from $1.59 per share seen in the same quarter a year ago.
The streaming video pioneer would post revenue growth of about 19% to around $7.3 billion. In the last four consecutive quarters, on average, the company has delivered earnings of over 5%.
“Areopening consumer and the lingering effects of 2020’s production delays suggest risk to consensus 2Q/3Q estimates. However, more content is on the way, supporting an increase in net additions in 4Q21/’22. In this cross-asset report, we reiterate OW on shares and reiterate our recommendation to buy 10Y bonds in credit,” noted Benjamin Swinburne, equity analyst at Morgan Stanley.
“We believe share performance is highly dependent on increasing global membership scale. Proven success in the US and initial international markets provides a roadmap to success in emerging markets, and scale should allow NFLX to leverage content investments and drive margins. Higher global broadband penetration should increase the NFLX addressable market, driving member growth and providing further opportunity given NFLX’s global presence. Longer-term, we see the ability to drive ARPU growth, particularly given increased original programming traction.”
UNITED AIRLINES HOLDINGS: One of the largest airlines in the world is expected to report a loss for the sixth consecutive time of $4.21 in the second quarter of 2021 on July 20 as the aviation service provider continues to be negatively impacted by the ongoing COVID-19 pandemic and renewed travel restrictions.
However, that would represent a year-over-year improvement of about 55% from -$9.31 per share seen in the same quarter a year ago.
|PM||Philip Morris International||$1.54|
|ONB||Old National Bancorp||$0.40|
|FMBI||First Midwest Bancorp||$0.38|
|CNI||Canadian National Railway USA||$1.49|
|CMG||Chipotle Mexican Grill||$6.50|
|UAL||United Airlines Holdings||-$4.21|
|PNFP||Pinnacle Financial Partners||$1.44|
|UCBI||United Community Banks||$0.62|
|SNBR||Scs Group Plc||$1.07|
Wednesday (July 21)
IN THE SPOTLIGHT: COCA-COLA
The world’s largest soft drink manufacturer is expected to report its second-quarter earnings of $0.56 per share, which represents year-over-year growth of over 30% from $0.42 per share seen in the same quarter a year ago. The company’s revenue would grow over 30% to $9.4 billion.
“We are Overweight Coca-Cola (KO) after significant stock underperformance given COVID impacts on KO’s on-premise eating / drinking out business (~40% of sales) and gas & convenience (~10%) with gov’t mandated restaurant closures and reduced foot traffic. COVID impacts drove a large -9% organic sales decline in 2020, but we forecast a recovery to ~8% organic growth in 2021/2022 with a post-COVID recovery in away-from-home,” noted Dara Mohsenian, equity analyst at Morgan Stanley.
“We believe Coke’s LT topline growth outlook is above peers, with strong pricing power, and favorable strategy tweaks under Coke’s CEO, including increased innovation and a cultural shift towards a total beverage company.”
|JNJ||Johnson & Johnson||$2.29|
|RCI||Rogers Communications USA||$0.62|
|BKR||Baker Hughes Co||$0.16|
|CCI||Crown Castle International||$0.68|
|DFS||Discover Financial Services||$4.01|
|GL||Globe Life Inc||$1.83|
|LVS||Las Vegas Sands||-$0.15|
|REXR||Rexford Industrial Realty||$0.09|
|FR||First Industrial Realty||$0.22|
|SLG||SL Green Realty||$0.17|
|UFPI||Universal Forest Products||$1.56|
|CNS||Cohen & Steers||$0.82|
|MC||Moelis & Company||$0.83|
|TCBI||Texas Capital Bancshares||$1.24|
|IPG||Interpublic Of Companies||$0.43|
|FNF||Fidelity National Financial||$1.41|
|PPERY||PT Bank Mandiri Persero TBK||$0.18|
Thursday (July 22)
IN THE SPOTLIGHT: TWITTER, INTEL
TWITTER: The online social media company that enables users to send and read short 140-character messages called “tweets”, is expected to report its second-quarter earnings of $0.07 per share, which represents year-over-year growth of over 105% from a loss of -$0.16 per share seen in the same quarter a year ago.
The San Francisco, California-based company would post revenue growth of about 55% to $1.06 billion.
“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for TWTR given 1) continued turnaround progress and 2) platform scarcity,” noted Brian Nowak, equity analyst at Morgan Stanley.
“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”
INTEL: The California-based multinational corporation and technology company is expected to report its second-quarter earnings of $1.07 per share, which represents a year-over-year decline of about 14% from $1.23 per share seen in the same quarter a year ago. The company’s revenue would fall over 10% to $17.73 billion.
|FITB||Fifth Third Bancorp||$0.81|
|FAF||First American Financial||$1.70|
|RS||Reliance Steel & Aluminum||$4.73|
|MMC||Marsh & McLennan Companies||$1.42|
|CLF||Cliffs Natural Resources||$1.52|
|TPH||Tri Pointe Homes||$0.81|
|VLY||Valley National Bancorp||$0.29|
|EWBC||East West Bancorp||$1.39|
|SAFE||3 Sixty Risk||$0.33|
|FFBC||First Financial Bancorp||$0.52|
|COF||Capital One Financial||$4.57|
|ASR||Grupo Aeroportuario Del Sureste||$36.49|
|RHI||Robert Half International||$1.05|
|AEP||American Electric Power||$1.12|
|SASR||Sandy Spring Bancorp||$1.20|
|ORI||Old Republic International||$0.53|
|FFIN||First Financial Bankshares||$0.38|
Friday (July 23)
|NEP||Nextera Energy Partners||$0.61|
|AIMC||Altra Industrial Motion||$0.81|
|FBP||First Bancorp FBP||$0.22|
|GT||Goodyear Tire & Rubber||$0.16|