Earnings Calendar: October 31 – November 4

The earnings keep on coming this week. Included in the jam-packed calendar is a wave of updates from chipmakers with AMD, Qualcomm QCOM, NXP, and ON Semiconductor ON all penciled in. The pharmaceutical industry will also be under the spotlight with Pfizer PFE, Moderna MRNA, Eli Lilly LLY, GSK, and Amgen among those scheduled to report.

There are a number of well-known apps reporting this week, including ride-hailing service UBER, accommodation booking platform Airbnb ABNB, trading app Robinhood HOOD and cryptocurrency outfit Coinbase COIN. We will also get updates from payments giant PayPal PYPL and streaming service ROKU.

In the UK, investors will be keeping an eye on luxury car maker Aston Martin, airplane engine maker Rolls Royce, clothing retailer Next, airline Wizz Air and supermarket Sainsbury’s.

Elsewhere, one of the biggest banks in Singapore, DBS Group, will report in the wake of its US and UK peers reporting their results, while Woolworths headlines the calendar in Australia.

Advanced Micro Devices

It could be a rough ride for AMD this week as Wall Street believes adjusted earnings will decline for the first time in more than three years this quarter. AMD has already warned that revenue will be over $1 billion lower than originally expected this quarter due to weaker demand from its Client segment, which homes its processors made for computers and laptops. This isn’t a problem specific to AMD. Its rival NVIDIA issued a similar warning around two months before AMD raised the warning flag. While AMD’s other divisions supplying chips for data centres is expected to prove more resilient, there are signs that this has also peaked considering markets anticipate a second consecutive quarter of lower sequential revenue over fears that businesses have also started to pull back on spending. You can read more in our AMD Q3 Earnings Preview.

BP

While most companies are struggling to impress this earnings season, the oil and gas industry has continued to deliver bumper profits in the third quarter. While oil prices have eased since June this has been more than offset by natural gas prices that remain over twice as high as last year. BP is expected to report a 62% jump in revenue to $58.5 billion and underlying replacement cost profit – its headline measure – is expected to soar 86% to $6.2 billion. Questions are on whether we have now reached the peak in terms of prices and how demand could fare with a recession looming, and investors will also want to see how the recently announced acquisition of US biogas producer Archaea will impact cash flow and shareholder returns over the short term. Rival Shell has already revealed that its profits dropped in the third quarter from the peak we saw in the second. US rivals Exxon Mobil and Chevron are testing new all-time highs following their results.

Uber

The story at Uber is that its ride-hailing service is still recovering after being heavily disrupted by the pandemic while growth at its food delivery arm is slowing down after booming during lockdown. Uber’s newer division focused on freight should deliver another solid contribution and remains a key catalyst for growth. However, demand for all three could be vulnerable to the economic downturn. Still, Uber remains on the right path for now. Bookings are expected to hit a post-pandemic high of $29.6 billion in the third quarter, up 28% from last year and the $29.1 billion seen in the second, and Uber is set to deliver its fifth consecutive quarter of positive adjusted Ebitda of $457.9 million, up from just $8 million last year. The outlook will prove highly influential, although markets appear confident bookings, revenue, and Ebitda can all continue to grow at double-digit rates in the fourth quarter. Rival Lyft reports third-quarter earnings on Monday, November 7.

Pfizer

Covid-19 will be the key theme of Pfizer’s results this week. Wall Street forecasts revenue will be down 12% from last year at $21.1 billion and have penciled in a 4.7% rise in adjusted EPS to $1.40. That would mark the first fall in sales and the most tepid earnings growth in 18 months. Pfizer is coming up against increasingly tough comparatives concerning its Covid-19 vaccine, with jab sales forecast to be 80% lower than last year at $2.5 billion. Sales of its newer Covid-19 treatment Paxlovid have helped counter this, but analysts believe quarterly sales already peaked in the last quarter at $8.2 billion and will decline to $7.6 billion in the third. They account for over half of all sales, so the outlook for both will be crucial in deciding how markets react.

Aston Martin

It has been a long road to recovery for Aston Martin and there is still a long way to go. Operational challenges have been addressed and the recent £654 million capital injection from investors removes any concerns about cash. However, the new funding will also ramp-up the pressure for Aston Martin to deliver. The first job is to meet its 2022 guidance that is aiming to deliver 6,600 cars and grow its adjusted Ebitda margin. It has also promised to start generating cashflow again in the second half of 2022. Analysts forecast Aston Martin made 1,464 wholesale deliveries in the third quarter, up 8.5% from last year. Revenue is expected to grow 46% to £346.5 million and adjusted Ebitda – its headline measure – is expected to surge to £56.7 million from £23.5 million the year before. Analysts believe the £2.5 million Valkyrie will prove critical to its ability to deliver in the second half, alongside its higher-margin DBX707 and Vantage V12. News that Chinese firm Geely has become a new significant shareholder has installed some confidence that it is over the worst of its troubles, but the stock is still down 80% since the start of the year.

Robinhood

Robinhood shares have been trending higher since bottoming out in June, but they remain down 40% from where they started 2022. Rampant inflation, a weaker economic outlook, and a crash in cryptocurrency prices have all hurt activity on its platform and forced the company to make layoffs and unwind some of the expansion it undertook during the good times. That will place cost-savings under the spotlight as it tries to become a leaner business. Monthly Active Users are expected to have declined to 13.7 million at the end of September from 14 million at the end of July and fall some 27% from this time last year. Wall Street forecasts revenue will come in at $357.8 million, down 2% from last year but marking an improvement from the last quarter. The net loss per share is expected to be $0.18, having contracted from the $2.06 loss seen the year before. Consensus numbers suggests options trading will have improved since the previous quarter, but that equities and cryptocurrencies will continue to struggle amid the tough market conditions.

Coinbase

Cryptocurrency markets remain depressed. Although bitcoin has found higher round since bottoming out in June, it has only briefly managed to return above the $20,000 mark during the last four months. That sets the tone for what could be another lackluster set of results. Coinbase is expected to have lost 1.15 million Monthly Transacting Users over the three months to the end of September to have ended the month with 7.85 million on its books. Revenue is forecast to halve from last year and drop 18% sequentially to $652 million. Coinbase has said its subscription and services should see sales improve this quarter and analysts are looking for $164 million. This is increasingly important as it looks to diversify income and wean itself off relying on trading volumes. Its adjusted Ebitda loss is penciled in at $212 million, which would turn from the profitable times we saw during last year and wider than the loss we saw in the most recent quarter. With the challenging environment unlikely to change anytime soon, investors will want to see it get a grip on costs and ensure it minimizes its cash burn. A reiteration of its goal to limit adjusted Ebitda losses to under $500 million this year is also key.

DBS Group

Singaporean bank DBS Group is expected to reveal its bottom line is gaining traction as it reaps rewards from higher interest rates. Net profit is expected to jump 15% from last year to SGD1.96 billion, just shy of the all-time record seen less than two years ago. Net interest income is forecast to rise 30% and, unlike its US and UK rivals, provisions for credit losses are not expected to be a significant drag on the bottom line. Loan growth is expected to remain healthy and counter softer performances from its wealth management arm. Eyes will be on costs, with some analysts warning its ambition to maintain a cost-to-income ratio of 40% may be tough given the weaker economic outlook and the fact expenses are rising across the board.

PayPal

Visa and Mastercard, which have reported in recent days, both saw payments improve thanks to the recovery in travel and cross-border transactions, and said that consumer spending remains resilient. Spending volumes have continued to grow, albeit at a slower pace to keep fears of a slowdown alive. PayPal is expected to follow and see volumes rise 11% to $343.2 billion. Venmo, which recently celebrated being added to Amazon, is expected to grow at a faster pace of 16%. Wall Street forecasts revenue will rise 10% to $6.8 billion and have penciled in a 14% drop in adjusted EPS to $0.96. PayPal is aiming to add 10 million net new active users in 2022 as it focuses on purging unprofitable accounts and deliver $5 billion in free cashflow.

Sainsbury’s

An update from Sainsbury’s this week will provide insight into how consumer spending is shaping up as the UK struggles with the cost-of-living crisis. Supermarkets have a challenge as they try to keep prices low for consumers amid rampant inflation while also protecting profitability, which is waning. The unwinding of demand for Argos, which boomed in the pandemic, is posing a problem even if higher prices on the grocery side is propping up overall revenue. Analysts forecast revenue will be up just 3.5% from last year at £16.3 billion while pretax profit is expected to almost halve to £274.3 million. Sainsbury’s is aiming to deliver underlying pretax profit of £630 million to £690 million this year, and a reiteration would be welcome.

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