Tech Stocks Earnings Coming: Frothy Days Are Here Again?
Earnings from a spate of top digital companies will be reported in the coming days, including for Google (April 15), Yahoo (April 20), Apple (April 20), eBay (April 21), Netflix (April 21), Amazon (April 22) and Microsoft (April 22).
Most Wall Street analysts expect good news from the group as a whole, especially as the economy recovers. Bright points include the e-commerce and advertising markets, both of which have been rebounding.
In addition, extensive cost cuts over the last year and easy year-over-year comparisons for most companies will brighten the financial picture.
That’s the hope at least, especially since tech stocks have been performing less robustly than the S&P of late.
Of all the tech companies, analysts are most worried about Google (GOOG), which has seen its share price pushed down over a variety of issues.
There are good reasons for long-term concern, despite expected strength in its core search business, when the search giant reports tomorrow. But from its battle with China to possible regulatory scrutiny from the federal government to its escalating fight with Apple, Google is an ongoing digital soap opera.
And while its Android mobile operating system is growing, there are still questions about if and when Google can make bank from the business.
Yahoo (YHOO), the perennial weakling in recent quarters, is getting much better reviews, especially as the display ad market improves. Also a plus: Cost savings from its online ad and search partnership deal with Microsoft (MSFT).
Yahoo’s stock has been rising of late above its consistent $15 range to over $18 yesterday. Crossing to a $20 a share price would be a significant Rubicon for Yahoo.
Apple (AAPL), though, seems to have remained an investor darling and is expected to turn in another stellar quarter. Investors will be looking to hear if the company will release actual iPad sales results, which some think the secretive company is lowballing.
Also of interest are sales of its powerhouse iPhone, as well as any more news on the new operating system for it.
For eBay (EBAY), improvements in its main marketplace business, as well as continued strength in its PayPal division, will be closely watched by investors.
But continued pressure from a range of new and old competitors and eBay’s ability to respond and grow remain a worry.
Netflix (NFLX), though, is hindered only by existing bullishness around the stock. Wall Street is expecting strong results from the online video rental company, especially as it continues to add subscribers and innovate its intense customer service focus.
For Amazon (AMZN), the impact of the Apple iPad and e-book prices will likely get a lot of attention, even though it has a much larger business beyond its Kindle e-reader. The improvement in the e-commerce arena is likely to be a boon to Amazon.
Last of all to report will be Microsoft, whose earnings are more complex, given its many businesses.
While the focus will be on sales of Windows 7, in the digital arena, analysts will likely be interested in the status of its Yahoo partnership, the gains in search share for Bing and what plans the software giant has related to the cloud-computing arena.