Earnings season is well under way, with several titans of industry scheduled to report this week. Who should investors be looking at in these troubled times?
There has been much speculation surrounding companies earnings reports for Q1. In the fourth week of Q2 of the longest year ever, some of the biggest names on Wall Street will be reporting on their first-quarter performance, and more importantly, updating guidance for the coming quarter.
With household names such as Google (NASDAQ: GOOG), Spotify (NYSE: SPOT), Amazon (NASDAQ: AMZN), and so much more reporting, we could’ve listed any number of companies. However, the 5 stocks below can give investors a key insight into the industries they represent.
It’s going to be an important week for America’s biggest exporter, as Boeing (NYSE: BA) will attempt to assuage investor concerns amid some of the most turbulent times it has ever faced. The company has been reeling ever since March 2019, when a second 737 MAX going down brought the total death toll of two crashes to 346 people. MAX production remains halted since then, with the company reporting a loss of $636 million in 2019, its first annual deficit since 1997. Now, with a pandemic bringing the airline industry to a standstill, Boeing is truly up to its eyeballs in it.
One of its biggest customers, Delta Airlines (NYSE: DAL) had an understandably terrible Q1 report last week, with the likes of American (NYSE: AAL) and Southwest (NYSE: LUV) reporting later in the week. Since January, Boeing stock has fallen 50%, forcing the company to apply for federal aid, which it is likely to receive in order to stay afloat. The company will also announce a slew of cuts in order to help with short-term cash-flow problems such as cancelled orders, as well as a long-term plan for the company’s survival. At this point, the company’s future depends largely on the sum of aid money it will receive from the government.
Boeing’s earnings call will take place on Wednesday, 29 April.
One of the world’s most valuable companies, Apple (NASDAQ: AAPL) is the king of hardware, and its iPhone is easily the most recognizable device on the planet. Having reported revenue of $91.8 billion in Q4 2019, as well as making huge strides in its Services segment in the past year, the company had a great 2019. All that could change in 2020 though, as the heavily China-reliant tech giant is likely to report that it did not meet revenue goals at its earnings call on Thursday.
Back in February, the company was forced to pull guidance of roughly $64 billion in revenue as stores and manufacturing plants in China were closed to the COVID-19 pandemic. Now that these are back open, however, the rest of the world has been forced to close. Investors can expect a decline in iPhone sales, but should look to see how the company’s wearables and services fare, as they now account for up to 25% of the company’s revenue.
Apple reports Q1 earnings on Thursday, 30 April after close.
One would think that Facebook (NASDAQ: FB) would have little exposure to a pandemic, but much like its rivals Twitter (NYSE: TWTR) and Pinterest (NASDAQ: PINS), its advertising business is taking fire. At its last earnings call, Facebook unveiled that it had hit 2.5 billion monthly active users, with $21.08 billion in revenue, up 25% year-over-year, with $2.56 in earnings per share. 99% of the company’s revenue derives from advertising, and as the coronavirus wreaks havoc on the world, businesses are no longer able to afford ads.
Facebook will see a significant weakening in this all-important ad business, especially in countries heavily hit by the virus, including the U.S.. According to some reports, advertising auction prices fell by 20% in February and March, with conversion rates also experiencing a steep decline as spending slows. Facebook is expected to report quarterly earnings of $1.78 per share on revenue of $17.42 billion, and has not updated guidance since the pandemic struck.
Facebook will release its first-quarter results on April 29 after the market closes.
When the world is dealing with a deadly pandemic, stay-at-home stocks such as Zoom (NASDAQ: ZM) and Slack (NYSE: WORK) will thrive. The same goes for companies that allow you to see your doctor from the safety of your own home, which is exactly what Teladoc (NYSE: TDOC) allows as the market leader in virtual healthcare. The company’s stock has soared 131% in 2020 through Friday, April 24, compared to the S&P 500’s (NYSEARCA: VOO) 11.7% drop in the same period. Teladoc’s initial guidance was to take in revenue of $180 million to $181 million compared to the $156.5 million brought in last quarter.
This 15% increase may not sound like much in the sense that you would expect usage to explode during a pandemic, but bear in mind that restrictions were not set until mid-way through March. As with most businesses right now, Teladoc’s Q2 guidance will be the hotly anticipated topic at its earnings call. One interesting metric to keep an eye on will be total visit volume, which is expected to be more than 1.8 million visits, which represents robust growth of about 70% year over year.
Teladoc will unveil its Q1 results on Wednesday, 29 April.
Love it or hate it, Tesla (NASDAQ: TSLA) is one of those stocks that is always on investors’ minds. While the hype surrounding companies such as Virgin Galactic (NYSE: SPCE) or Beyond Meat (NASDAQ: BYND) can come and go, Elon Musk’s electric-vehicle empire always makes the news. 2019 was a great year for the company, as revealed in its last earnings call, which saw the company’s revenue grow 2% to $7.4 billion.
The coronavirus has thrown a spanner in the works though, with car production in the U.S. currently halted and the company’s all-important Shanghai factory only getting back to normal in recent weeks. Some mixed news did come for Tesla in China, as well as homegrown NIO (NYSE: NIO), as the Chinese government cut EV subsidies by 10%, but extended them by 2 years until 2022. Tesla is expecting to have delivered 88,000 vehicles in Q1, down from more than 112,000 in Q4 2019. As well as this, investors will be keen to get a look at the company’s balance sheet after it raised $2 billion in equity offerings in January. At least a third of this is expected to have been used in offsetting cash-burn caused by the pandemic. Tesla is expected to resume production in its Fremont factory on May 4, so guidance for Q2 will be very important for Musk and Co.
Tesla will announce first-quarter earnings on Wednesday, 29 April.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.