Image: Investor browsing through the most popular company shares
The latest earnings season in the U.S. is winding down, but
the coming week will still feature some huge names, whose earnings and guidance
are likely to move not only their own stock, but entire sectors, or even the
broader market. Earnings reports can be a volatile time for stocks, but they
can also present investors with opportunities if they’re able to react quickly.
With that in mind we’ve put together a brief overview of
some of the bigger earnings reports for the upcoming week to support your
research towards a promising direction.
Image: Alphabet parent of Google releases earnings report
Technology Sector Highlights Another Full Week of Earnings Amid Scandals
People often say to save the best for last, but that
definitely isn’t the case for the markets this week as Monday kicks off the
earnings week with a report from Google parent Alphabet.
This has the potential to set the tone for the entire technology sector for the
day, or even longer.
Alphabet has been facing some heat for data scandals. Just like Facebook,
Alphabet is expected to overcome any negative impact. Earnings are expected to
be strong, and traders should monitor Google’s non-ad revenues as they look for
some earning diversity.
Image: DOW Jones reunites important financial components
Past Quarter Struggles & Slow Growth versus Positive Executive Guidance
Tuesday also sees a report after the market closes, from a
heavy hitter – one of the Dow Industrial components – Walt Disney. With
expectations fairly subdued this quarter due to strong comps from last year,
investors could get a nice positive surprise.
The Parks and Recreation sector could experience a solid
foundation and growth once again, but the greatest scrutiny will remain on the
Media Networks group. This is the largest segment of Disney’s business which
has struggled so much over the past quarters. Growth here is expected to be
slow - one thing that could make the stock pop is positive guidance from
executives, as shares are currently valued on the cheap side.
Image: General Motor sales are crucial to the stock's performance
General Motor Earnings = Triumph or Error?
Wednesday we get earnings from General Motors before the
bell, and on the surface, things don’t look great based on overall sales. Crucial
to the stock’s performance will be the mix of sales.
For example:
- a)
North American sales were down 2.7% overall
- b)
Chevrolet Equinox rose 26.4%
- c)
Traverse crossovers grew by 14.1%,
This indicated GM is successfully moving sedan
customers to the more profitable crossovers. In China, the fourth quarter sales
were down 25.4%, but not as low as several of GM’s rivals.
Sales of luxury vehicles remained strong with Cadillac
acquisitions growing 17.2%. Perhaps the most important element within the forecast
for the Wednesday earnings is the 16.7% January gain in General Motor shares,
which came following some strong hints from the company regarding 2018 as a
very strong year.
Image: Twitter reports earning season results before market opening
Numbers Shaping Up Twitter - Wall Street Expects Strong Earnings
Thursday
will start off with social media giant Twitter reporting its earnings before
markets open, which could set the tone for the entire technology sector.
Twitter has spent several quarters purging its platform of bots and fake
accounts but this quarter investors won’t be giving them a pass, looking for
solid growth on the user front.
Expectations
from Wall Street are for strong earnings growth, and analysts are looking at
$0.25 a share or growth of 31.6% over the same quarter last year. Revenues are
also expected to jump by 19.1% versus the year earlier. Twitter has beaten
estimates in three of the past four quarters, and signs are pointing to other
earnings beat this quarter.
Image: Financial news impact global markets
Monitoring Global Events that Impact the Financial Markets
This collection of information should offer plenty of insight
on what positions you could open in the coming week, based on earnings.
The technology sector could be heavily impacted both by the
Monday report from Alphabet and the Thursday report from Twitter. Strong
results from either could also send shares of the other so-called FAANG stocks
higher. Tuesday’s report from Disney could have an impact on the Dow.
With expectations subdued and stock valuations low, Disney could pop up a
surprise. General Motors continues to be a turnaround story, even in what looks
like a weak quarter for the automotive sector, they might have performed well
by improving their sales mix.
Sources:
marketwatch.com, finance.yahoo.com, seekingalpha.com, fool.com,
zacks.com
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