This is going to be quite the week in New York. We’re hosting the Super Bowl this weekend (insert alternative drug themed name here) and everyone is excited. First though, there’s a mini Super Bowl going on down by Wall Street this week, with four tech giants reporting earnings.
Apple, Facebook, Google, and Amazon are all reporting earnings this week. Their announcements should have big impacts on not only their stocks, but on the market as a whole. As context, just these four stocks combined are worth a staggering $1.2 trillion dollars today. Each’s share price also grew an impressive 10-84% over the past year.
Apple is the first to report, announcing earnings after the close today. I don’t see earnings going well for Apple tonight. Gross profit margins have been declining over the past few years, and investors will be keeping a close eye on them tonight. In a worrying sign last week, Samsung — Apple’s main rival for smartphones –reported a profitability decline in its mobile division. Samsung’s margins were hit by a rise in marketing expenses to promote new phones and Apple likely had similar issues with the release of its new phones in the fall.
I’m cautiously optimistic about Facebook, but could see things going either way. Facebook has high earnings expectations this quarter. Analyst consensus per ThomsonReuters is currently expecting $0.27 in earnings per share (EPS) on $2.32 billion in revenues, for expected year-over-year growth of 59% and 92% respectively. That high number leaves a lot of room for failure, but if Facebook does meet it it should have a very positive impact on the stock price. Key items to watch will be mobile revenue numbers and active user growth, particularly in the teen segment investors were so concerned about last quarter.
I’d be fairly comfortable buying Google or Amazon before earnings. Both tend to do pretty well after earnings reports, and Google has been on a hot acquisition streak recently. Plus, I see either stock stabilizing fairly quickly if it is hit with negative earnings impact.
Here are the other notable earnings this week:
- Tonight: Apple
- Tomorrow: American Airlines, AT&T, Electronic Arts, Ford, Pfizer, Yahoo
- Wednesday: Boeing, Deutsche Bank, Facebook
- Thursday: 3M, Google, Time Warner Cable, Under Armour, Visa, Amazon
- Friday: MasterCard, Mattel, Tyson Foods