Article / 24 October 2014 at 12:44 GMT

Earnings Watch: Analysts hit 'like' on Facebook

  • Last week's average earnings beat stands at 4.8%
  • ExxonMobil, Berkshire Hathaway, Facebook up for next week
  • Analysts expect Facebook EPS to more than double

B
y Mads Koefoed

Apple and Amazon were among the companies reporting last week, but both their results and their subsequent receptions by the market differed markedly. The former saw earnings ($1.42 per diluted share) far outstrip expectations ($1.30) on record iPhone sales, which topped 39 million for the quarter. Amazon, meanwhile, recorded its largest-ever operating loss of $544 million which sent the stock tumbling. 

Apple

Apple's hotly awaited iPhone 6 sent earnings through the roof. Photo: Mario Tama \ Getty

In addition to Apple and Amazon, 128 other companies reported this week and the status now is that, out of a total of 193 companies that have reported, the average earnings beat is 4.8% with average earnings growth at 6.9%.

Next week also promises a lot of action with no less than 153 US companies reporting earnings, including heavyweights Exxon Mobil (October 31), Berkshire Hathaway (October 31) and Facebook (October 28). The combined market capitalisation of these companies is $750 billion, give or take. 

In total, we are looking at almost $3.9 trillion worth of stocks announcing next week. 

Please find a selected list of (expected) earnings releases next week below, as well as a complete PDF list attached.

  • Facebook Q3 FY14 (Tuesday)... is set to report revenue growth of more than 50% according to estimates by the Street. Earnings are expected to more than double to $0.40 per diluted share (before abnormal items) from $0.17 a year ago. Nanigans reports in its latest global Facebook advertising benchmark report that global clickthroughs are through the roof from the same period last year while the cost per click continues to rise at a robust pace year-on-year. Facebook has exceed earnings expectations in seven of the last eight quarters, so is another beat coming on Tuesday? (Facebook is expected to report after the market has closed.)
  • Starbucks Q4 FY14 (Thursday)... could well show off quarterly results where sales rose a bit more than 10% from a year ago if the Street's estimates are to be taken at face value. The global coffee retailer (valued at around $56 billion) is expected to deliver EPS of $0.74 compared with $0.61 a year ago on a cost-cutting strategy. Meanwhile revenue is projected to hit $4.24 billion as the company continues to expand its operations. (Starbucks is expected to report after the market has closed.)
  • Exxon Mobil Q3 FY14 (Friday)... is rounding off next week's earnings with a report, which is expected to show sales down around 5% from the same quarter in 2013. Earnings, too, could drop from a year ago with the Street having pencilled in a 3% decline in EPS, to $1.73 from $1.79. The US is well on its way to becoming the biggest producer of oil in the world, and Exxon Mobil is capitalising on this move (by horizontal drilling, for example, which has previously been too expensive). (Exxon Mobil is expected to report before the market opens.)

Also keep an eye out for Chevron, Pfizer, Merck, Visa, Gilead Sciences, ConocoPhilips, Altria, and MasterCard, among others.

-- Edited by Michael McKenna

Mads Koefoed is head of macro strategy at Saxo Bank.
4y
fxtime fxtime
Berkshire Hathaway should prove interesting considering the losses on Tesco and IBM
4y
Mads Koefoed Mads Koefoed
@fxtime: Yes, it will indeed.

Amazon is down 9.3% at the moment in pre-market trading.

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