Earnings Season Kicks Into Hyperdrive
Benzinga | Jul 19, 2013 01:46PM ET
Earnings season picks up next week as many key companies across multiple industries report results for the last quarter. Also, the flash, or initial estimates, of manufacturing PMIs from key countries around the world will be in focus, especially those in China.
Key Earnings
In the coming weak, earnings from key tech companies Apple (AAPL), Facebook (FB), and Netflix (NFLX) are expected.
Apple
Apple is expected to report third quarter EPS of $7.31 vs. $9.22 a year ago. Revenue is expected to rise slightly to $35.09 billion from $35.02 billion.
Morgan Stanley is optimistic on the stock heading into earnings. The analyst team has an Overweight rating on the stock and a price target of $540.00.
“We're positively biased into earnings as we expect Apple to beat consensus estimates on the back of strong demand for discounted iPhones. We expect Q4 guidance below consensus given historical conservatism ahead of new product cycles.”
“We believe Apple could ship at least 29M iPhones in Q3, above consensus of 26.5M. Demand data from our AlphaWise Smartphone Tracker and US Telecom analyst Simon Flannery's estimates, and supply chain checks by our Asia/Pac Tech analyst Jasmine Lu all suggest 29-32M iPhone shipments.”
“Even if we assume all iPhones above our 26M model are the cheapest iPhone 4 at a $50 discount, the higher shipments imply total revenue north of $36B, above guidance of $33.5-35.5B and consensus of $35.1B. The mix shift results in a slightly lower iPhone GM, and total GM close to the mid-point of Apple's 36-37% guidance. We believe Macs and iPads are likely in-line with our model of 3.9M and 18M. Net, EPS could beat our $7.22 and consensus of $7.32.”
“Potential June Q beat, accelerating new iPhone builds, and broad investor expectations for conservative guidance make us positively biased into earnings but shares are unlikely to re-rate before new carrier distribution, new services, or new products are announced with the next catalyst the late September iPhone launch.”
Meanwhile, the analysts at Jefferies are more cautious heading into earnings, noting signs from earnings from carriers such as Verizon (V ).
- Earnings Expected From: 3M (MMM), Celgene (CELG), Coca-Cola Enterprises (CCE), Dow Chemical (DOW), General Motors (GM), Amazon (AMZN), Expedia (EXPE) and Facebook (FB).
- Economic Releases Expected: the German IFO Business Climate Index, British GDP, durable goods, jobless claims, the KC Fed Manufacturing Index and Japanese CPI.
- Earnings Expected From: KKR (KKR), Tyco (TYC) and Weyerhaeuser (WY).
- Economic Releases Expected: the Michigan Consumer Sentiment Index.
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