Earnings to Watch Next Week: Zoom, Advance Auto Parts, Lululemon and Cooper Companies in FocusFollowing is a list of company earnings scheduled for release May 31-June 4, along with earnings previews 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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Tuesday (June 1)
IN THE SPOTLIGHT: ZOOM
The San Jose, California-based communications technology company Zoom is expected to report its first-quarter earnings of $0.99 per share, which represents year-over-year growth of about 395% from $0.20 per share seen in the same period a year ago.
The company, which provides videotelephony and online chat services through a cloud-based peer-to-peer software platform, would post revenue growth of 175.8% to $905.24 million.
For first-quarter fiscal 2022, Zoom forecasts revenues in the range of $900 million and $905 million. Non-GAAP income from operations is expected in the range of $295 million and $300 million. Moreover, non-GAAP earnings are expected in the 95-97 cents-per-share range.
The cloud video communications provider forecasts revenues in the range of $3.760 billion and $3.780 billion for the full fiscal year.
“Sentiment improving, but still leans negative heading into FQ1. Commentary around 2H churn / Phone still likely more incremental to move vs. 1Q print / 2Q guide. Profitability potential meaningful LT, but balanced in NT by churn concerns, keeping us EW into print,” noted Meta A Marshall, an equity analyst at Morgan Stanley.
“Zoom has established its position as the newly emerged leader in video conferencing, now a growth market, largely credible to the company itself given an introduction of a solution that employees actually use. The company has a meaningful competitive moat built on more than just architecture, but a rapid uptick in video usage has attracted significant investment efforts from competitors. Position within customers makes an attractive opportunity to expand into the broader UC market. Early wins encouraging. Environment post-COVID and large-scale WFH, and timing to reach, less certain.”
|ZM||Zoom Video Communications||$0.99|
Wednesday (June 2)
IN THE SPOTLIGHT: ADVANCE AUTO PARTS
The leading automotive aftermarket parts retailer is expected to report its first-quarter earnings of $3.05 per share, which represents year-over-year growth of over 235% from $0.91 per share seen in the same period a year ago. The company would post revenues of $3.31 billion.
“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,” noted Simeon Gutman, equity analyst at Morgan Stanley.
“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.”
|AAP||Advance Auto Parts||$3.05|
|AI||Arlington Asset Investment||-$0.25|
Thursday (June 3)
IN THE SPOTLIGHT: LULULEMON ATHLETICA, COOPER COMPANIES
LULULEMON ATHLETICA: The Vancouver-based retailer healthy lifestyle-inspired athletic retailer is expected to report its fiscal first-quarter earnings of $0.90 per share, which represents year-over-year growth of over 309% from $0.22 per share seen in the same period a year ago.
The apparel retailer would post year-over-year revenue growth of over 70% to $1.12 billion.
“Revenue & GM upside could yield a 16c 1Q21 EPS beat vs. the Street. While 1Q21 beats & raises haven’t been enough to send most Softline retailers’ shares higher, LULU may be an exception as investors move up the quality curve. Trim PT to $377 on an updated WACC; raise 1Q21 EPS on better sales,” noted Kimberly Greenberger, equity analyst at Morgan Stanley.
COOPER COMPANIES: The global medical device company is expected to report its fiscal first-quarter earnings of $3.09 per share, which represents year-over-year growth of over 104% from $1.51 per share seen in the same period a year ago.
The San Ramon, California-based company would post revenue growth of 31% to $690.73 million.
“Shares of Cooper Companies outperformed the industry in the past six months. The company exited the fiscal first quarter on a strong note, wherein both earnings and revenues beat their respective consensus mark,” noted analysts at ZACKS Research.
“The company witnessed solid performance across its core CVI and CSI units during the quarter under review. Expansion in both gross and operating margins is a positive. Management at Cooper Companies remains optimistic about the Clarity, MyDay and Biofinity suite of products and the portfolio of daily silicone hydrogel lenses, which makes it one of the leaders in the soft contact lens market.”
|SAIC||Science Applications International||$1.53|
|CRWD||CrowdStrike Holdings Inc. Cl A||$0.06|
|TOELY||Tokyo Electron Ltd PK||$1.25|
|ASEKY||Aisin Seiki Co||$0.88|
Friday (June 4)
There are no major earnings scheduled