Earnings to Watch Next Week: MongoDB, Campbell Soup, JD.com and Oracle in FocusFollowing is a list of company earnings scheduled for release March 8-12, along with an 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.
Monday (March 8)
|CASY||Casey’s General Stores||$0.95|
|DM||Dominion Midstream Partners||-$0.06|
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Tuesday (March 9)
IN THE SPOTLIGHT: MONGODB
MongoDB Inc, which provides an open-source database platform for automating, monitoring, and deployment backups, is expected to report a loss of $0.39 per share in the fourth quarter, which represents a year-over-year decline of 56% from -$0.25 per share seen in the same quarter a year ago. However, in the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 30%.
New York City-based company would post year-over-year revenue growth of over 27% to $156.97 million.
“MongoDB has established itself as one of the most popular databases to support the development of modern net-new apps. Into CY21, we see the business at a crucial inflection point. First, it is poised to garner the majority of revs from its public cloud business – the segment where market growth and share gains are the strongest. Second, the acceleration in customer adds suggests that its go-to-market model has matured to scale a modern, cloud-first business,” said Sanjit Singh, equity analyst at Morgan Stanley.
“As a result, an equation for durable 30%+ growth emerges (20%+ customer base growth with near 120% net-expansion from the existing base) – a growth story that does not look overly demanding given the strategic nature of this asset.”
|SLA||Standard Life Aberdeen PLC||£6.04|
|CMD||Cantel Medical Corp||$0.51|
|DQ||Daqo New Energy||$1.12|
|DKS||Dick’s Sporting Goods||$2.24|
|OSH||Oak Street Health||-$0.23|
|CLNE||Clean Energy Fuels||$0.00|
|ADOOY||Adaro Energy ADR||$0.05|
Wednesday (March 10)
IN THE SPOTLIGHT: CAMPBELL SOUP
CAMPBELL SOUP: Camden County, New Jersey-based processed food and snack company is expected to report a profit of $0.83 per share in the fiscal second quarter, which represents year-over-year growth of over 15% from $0.72 per share seen in the same quarter a year ago.
In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 9%. One of the world’s top soup makers would post year-over-year revenue growth of over 6% to $2.3 billion.
“High exposure to secularly challenged soup category: Shelf-stable soup (26.5% of sales) faces headwinds given shifts in preferences toward better-for-you and fresh foods, competition from private label, and pricing pressure. Snacking brands are well-positioned, but face competitive pressures: Milano, Goldfish, Farmhouse, and Snyder’s-Lance have strong brand equity but face high competition from PEP and MDLZ,” said Pamela Kaufman, equity analyst at Morgan Stanley.
“Significant organizational changes over last two years refocused the company and show promise: Divesting non-core businesses and new leadership refreshes the company’s strategic plan, allowing the company to focus on its key segments and geographies.”
|VERX||Vertex Inc. Cl A||$0.07|
Thursday (March 11)
IN THE SPOTLIGHT: JD.COM, ORACLE
JD.COM: Chinese e-commerce platform JD.com is expected to report a profit of $0.22 in the fourth quarter, which represents year-over-year growth of over 177% from $0.08 per share seen in the same quarter a year ago.
The leading B2C e-commerce player in China, which accounts for over 20% of China’s total B2C online market and over 50% of the online direct sales market, would post year-over-year revenue growth of about 35% to $33.1 billion.
“JD’s recent accelerated moves in Community Group Buying business could leverage its advantages in the e-commerce supply chain. Its fast-growing businesses could bring incremental growth momentum into 2021. Maintain Overweight,” said Eddy Wang, equity analyst at Morgan Stanley.
“We forecast that JD’s total revenue will grow 29% YoY in 4Q20, driven by strong demand for electronics and home appliance consumption during promotion season, as well as sustainable strong demand for online FMCG (i.e., JD’s GMV grew 33% YoY during the Double 11 promotion period). Meanwhile, we expect JD to increase its reinvestment to boost consumption in 4Q20, which could drag on its 4Q margin; as such, we forecast that JD’s 4Q20 non-GAAP net margin will reach 0.97% (vs. 0.5% in 4Q19 and 3.19% in 3Q20).”
ORACLE: Austin, Texas-based computer technology corporation is expected to report a profit of $1.11 in the fiscal third quarter, which represents year-over-year growth of over 14% from $0.97 per share seen in the same quarter a year ago.
In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 5%. One of the largest vendors in the enterprise IT market would post $10.06 billion in sales for the current fiscal quarter, according to Zacks Investment Research. On average, analysts expect that Oracle will report full-year sales of $40.02 billion for the current year, with estimates ranging from $39.44 billion to $40.33 billion.
“Oracle’s current low valuation at 13x CY22e EPS reflects its slower growth rate compared to peers. Despite potential opportunities within existing database customers and cloud-based ERP applications, offsets from waning businesses mean 2021 likely lacks the catalysts for the positive inflection in revenue growth investors would need to see to drive multiples higher,” Keith Weiss, equity analyst at Morgan Stanley.
“We see 15% EPS growth in FY21 and 6% in FY22, driven by an aggressive pace of share buybacks. However, cc revenue growth is 2%, in a software sector filled with strong secular growth stories, and just 2% operating income growth points to Oracle potentially reaching peak margins, leaving us Equal-weight at our $67 price target.”
|ULTA||Ulta Salon Cosmetics Fragrance||$2.18|
Friday (March 12)