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Earnings Ahead: Google, Disney, EA, GM and Twitter on lineup

The five major companies reporting earnings this week are Alphabet Inc. (GOOGL), The Walt Disney Co. (DIS), Electronic Arts Inc. (EA), General Motors Co. (GM), and Twitter Inc. (TWTR). These companies release have fetched the eye of the market as this could turn the indices in any direction.

Google-parent Alphabet Inc. (GOOG) will announce fourth-quarter earnings on Monday after the market closes. Analysts expect earnings to climb 12% to $10.86 per share and revenue to jump by 20.50% to $38.94 billion. The tech sector went through a rough patch of data scandals, regulatory crackdowns, and socio-political tensions. Google has been impacted by the security vulnerability, which affected 52.5 million users.

This has prompted Google to prepone closure of Google Plus service, which is once hailed as the company’s answer to Facebook (FB), to April 2 from August 2019. It is expected that Alphabet might be sharing more information with regard to the closure and its impact on the future results at the earnings conference call. Advertising revenue has been the sole breadwinner of Google-parent.

However, the company has been busy in multiplying non-advertising revenue with the aid of diversifications. This includes artificial intelligence and machine learning, cloud segment, automobile, healthcare, original content video streaming, broadband internet services, and experimental tech lab X. The fourth quarter could showcase the non-advertising business improvement and the revenue derived from the same.

Related: Alphabet Q3 2018 earnings report

Walt Disney (DIS) will report Q1 earnings results  on Tuesday after the bell. Earnings are predicted to drop by 18% to $1.55 per share and revenue is likely to decline by 1.10% to $15.18 billion. The entertainment conglomerate’s bottom line could be hurt by higher expenses at Media Networks and a relatively uncertain film slate. The decrease in bottom line could be reduced by the continued growth at Parks & Resorts.

In Media Networks, results at ESPN would be hurt by higher programming and production costs along with a rise in cable programming expenses. The bottom line is likely to take a hit due to the continued ramp-up of ESPN+ including sports rights investment. Cable programming expenses are anticipated to be up mid-single digits for the full year 2019.

The Studio Entertainment segment is likely to be hurt by weak film slate when compared to the phenomenal success of Star Wars: The Last Jedi, Thor: Ragnarok and Coco in the prior year. However, from the next quarter, Disney has a strong lineup under its hoods such as Captain Marvel, Dumbo, the next Avengers film, Aladdin, Toy Story 4 and The Lion King on the verge for theatrical release. The year 2019 could be influenced by the timing of the completion of the Fox acquisition.

Related: Disney Q4 2018 earnings report

Picture Courtesy: Pixabay.com

Gaming giant Electronic Arts Inc. (EA) is set to post third-quarter results  on Tuesday after the bell. Analysts expect earnings to drop 11% to $1.94 per share and revenue to decrease 11% to $1.75 billion for the quarter. The results could be hurt by a decline in packaged goods and other net revenue as well as higher costs and expenses.

The company continues to determine most of its revenues from digital business due to the shift to digital video games versions. The digital business is likely to be benefited by the strong performance of FIFA, which is an important growth driver.

The company’s holiday sales were hurt by the delay in launching the highly-anticipated Battlefield V in November. This delay has given the rivals an added advantage in holiday sales attraction. The game lost to Activision’s (ATVI) Call of Duty: Black Ops 4, and Take-Two Interactive’s (TTWO) Red Dead Redemption 2. The quarterly conference call could highlight more on the upcoming gaming titles and the shift from traditional devices to the digital platform.

Also read: Electronic Arts second quarter 2019 earnings results

General Motors (GM) will post Q4 earnings on Wednesday before the bell. Earnings are expected to dip by 26.10% to $1.22 per share and revenue is likely to decline 3.30% to $36.48 billion for the fourth quarter. The automaker, which is struggling in the cut-throat competition, has been undergoing a transitional phase of shifting its focus towards pickups as it is more profitable than cars.

For remaining profitable, the company has announced plans to lay off about 14,000 staffs as part of its restructuring activity. However, sales could be hurt by lesser demand arising in the market for GM vehicles as well as a decline in the launches during the quarter. The company has experienced more pickups sales than cars after reporting the quarterly sales numbers.

The company has simplified its model lineup by dropping six car models from its US vehicles lineup this year. While GM’s domestic sales are declining, its crossovers and trucks are thriving due to a competitive advantage. In the long run, the crossover market could be more profitable for General Motors instead of cars. The company’s conference call could highlight more on the upcoming lineups.

Also read: Twitter’s 2018 performance and 2019 forecast

Twitter Inc. (TWTR) is scheduled to report Q4 earnings results on Thursday before the market opens. Analysts project earnings to jump 31.60% to $0.25 per share and revenue to increase by 18.90% to $869.5 million for the quarter. The results will be benefited by better-than-expected growth in most products and regions. Advertising revenues are likely to rise due to the increase in owned and operating advertising revenue.

The micro-blogging platform’s total ad engagements could increase as video ad formats were the fastest growing ad format. The monthly active users are likely to be hurt by the removal of fake and malicious accounts as part of the company’s efforts to clear its platform of toxic content. Policy changes due to the enactment of GDPR also contributed to the decline alongside other factors.

Twitter is trying to increase user engagement through live video-streaming as well as by tailoring content to appeal to various user groups. The company could highlight its metrics and steps to user engagement in their fourth-quarter earnings call.

 

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