Earnings Calendar: Dec 19-23

This is the last week of earnings before markets wind down for Christmas. Although the calendar is quiet, there are some big hitters set to update the markets including athleisure giant Nike, delivery firm FedEx, meme stock favorite BlackBerry, memory chipmaker Micron and cruise operator Carnival.

Below is a calendar outlining the key earnings to watch out for this week. Please note: Earnings This Week will return on January 6, 2023.

Nike (NKE)

Nike’s topline growth is expected to have accelerated when it releases results this week thanks to weaker comparatives from the year before, but earnings are set to remain under pressure as rising inventory levels and higher costs continue to bite. Wall Street forecasts that Nike will report a 10.7% year-on-year rise in revenue to $12.6 billion in the second quarter and forecast diluted EPS will drop 20% to $0.66. Its direct-to-consumer unit will lead the topline growth over smaller gains from its wholesale division. In terms of products, analysts expect footwear to lead the charge and be accompanied by smaller rises in sales of apparel and equipment. The level of markdowns needed to clear stock will be a central focus, and how this is impacting margins. China, where COVID-19 restrictions have led to a period of prolonged weakness, will also be under the spotlight amid hopes that the economy will reopen in 2023. In fact, analysts believe sales at constant currency will return to growth in China in the second quarter for the first time in over a year, although revenue will dip thanks to unfavorable exchange rates amid the strong US dollar. Investors will also get a glimpse into how it has fared over the current quarter covering the busy holiday shopping season.

FedEx (FDX)

FedEx has been hit by a slowdown in demand amid weaker economic conditions and problems with its Express unit. Wall Street forecasts FedEx will report a tepid 0.9% year-on-year rise in revenue in the second quarter to $23.7 billion and a steep 42% plunge in adjusted EPS to $2.81. A 13% rise in Freight revenue and mild growth from Ground is expected to counter softness in Express. Meanwhile, its adjusted operating margin is expected to be squeezed to just 4.2% this quarter from over 7% the year before as costs continue to rise, albeit at a slower pace. With no say over the macro-environment, FedEx needs to demonstrate it can deliver using the levers it does have control over. It is aiming to deliver $2.2 billion to $2.7 billion worth of cost savings this financial year as part of a broader program aiming to trim $4 billion worth of fat by 2025. Analysts believe it will have made savings worth around $700 million in the second quarter and a beat here would help install some confidence around its turnaround, as would any positive news from Express or its European operations.

Micron (MU)

Micron has been among those that have seen a swift change in fortunes this year as the semiconductor industry suffers from a drop in demand for electronics and oversupplied inventory levels pushing down prices. Sales of both DRAM, the chips that temporarily store data, and NAND, which are used for permanent storage, are both forecast to be down over 44% from last year. As a result, Wall Street forecasts Micron will report a steep 46% year-on-year drop in revenue in the first quarter of its financial year to $4.1 billion – which would be at the bottom-end of the company’s guidance. Meanwhile, costs continue to rise and are expected to rise over 10% from last year and this, twinned with softer demand, is set to see adjusted EPS will come in at breakeven, with markets believing there is a risk it could slip into the red for the first time in years. Micron has said it expects to stage a recovery in the second half of its financial year but markets have huge doubts considering they believe revenue and earnings won’t return to growth until the first quarter of the 2024 financial year. Micron is cutting production and expenditure in response, but we could see more action taken if current market conditions persist.

BlackBerry (BB)

BlackBerry continues to transition to a new model and has a big job to do in turning the company’s fortunes around. Wall Street forecasts the meme stock favourite will report an 8.1% year-on-year drop in revenue in the third quarter of its financial year to $169.1 million and are looking for a loss per share of $0.07. BlackBerry will have reported lower revenue for 12 consecutive quarters (and earnings have been under pressure throughout most of this) over the last three years. Licensing revenue has fallen to almost zero following the sale of an array of patents while software and services have also failed to grow in recent years. That, accompanied by rising costs, is keeping BlackBerry in the red. Cybersecurity is expected to remain tough thanks to intense competition, although its Internet-of-Things (IoT) unit is forecast to post a 19% jump in sales, underpinned by QNX and IVY. However, with the automotive industry proving to be a major customer, there will be concerns over demand as we head into 2023 and the economy continues to soften.

Carnival (CCL)

Carnival is expected to post sequential improvements in passenger numbers and occupancy rates when it reports this week, but the cruise line operator is still a long way from recovering from the COVID-19 pandemic. Analysts believe Carnival will see fourth-quarter revenue more than treble from the year before to $3.93 billion. Adjusted Ebitda – its headline measure – is expected to come in at a $68.7 million loss this quarter and this will be the key figure to watch considering Carnival has vowed this measure will turn positive in the new 2023 financial year. However, it is expected to remain in the red at the bottom-line, as it has done since 2019, and post a GAAP net loss of $1.07 billion. Carnival will be setting the tone for what to expect in the new financial year and investors will be keen to know whether it can finally get back into the black. Markets currently believe adjusted Ebitda will turn positive in the first quarter and stay positive for the rest of the year although its bottom-line won’t return to profit until the third quarter, according to current consensus figures.

More By This Author:

Earnings This Week: Oracle, Adobe And Accenture
Will Black Friday And Cyber Monday Help Retail Stocks?
Earnings This Week: Dell, Baidu And Kingfisher