Earnings This Week: Salesforce, Broadcom And C3.ai

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Earnings Calendar: May 29 – June 2

The US earnings season is tapering off, but we have some big reports to keep an eye on this week. The headline updates will come from CRM behemoth Salesforce (CRM), semiconductor firm Broadcom (AVGO), hardware giant HP (HPQ), edge-to-cloud firm Hewlett-Packard Enterprises (HPE), and cybersecurity outfits CrowdStrike (CRWD) and Okta, Inc. (OKTA). The retail space will also remain under the spotlight with results due out from value chain Dollar General (DG), athleisure retailer Lululemon (LULU), designer fashion group PVH Cop. (PVH), and department stores Macy’s (Mand Nordstrom (JWN).

The UK calendar includes results out from shoemaker Dr Martens, car-selling platform Auto Trader, water utility Pennon Group, oil producer Ithaca Energy and discount retailer B&M.

Below is a calendar outlining the key earnings we are watching this week:

Monday, May 29

Ithaca Energy Q1

N/A

Impax Asset Management H1

Tuesday, May 30

Thursday, June 1

HP Q2

Broadcom Q2

Hewlett-Packard Enterprises Q2

Dollar General Q1

Canopy Growth Q4

Lululemon Q1

Greencore H1

Hormel Foods Q2

Wednesday, May 31

Zscaler Q3

Salesforce Q1

MongoDB Q1

CrowdStrike Q1

Auto Trader FY

Netapp Q4

Macy's Q1

Chewy Q1

Pennon Group FY

Okta Q1

PVH Q1

B&M European Retail FY

Dr. Martens FY

Nordstrom Q1

Friday, June 2

C3.ai Q4

N/A


Salesforce stock: Q1 earnings preview

Salesforce is used by businesses around the world to manage their CRM systems and the company is therefore treated as a major bellwether for the US economy that can provide vital insights into spending at a time when businesses are becoming more stringent with expenses. With that in mind, revenue is forecast to rise 10.3% from last year to $8.175 billion. While strong, that will mark the sixth consecutive quarter of slower growth as businesses pullback. Adjusted EPS is expected to perform much better and rise 64% to $1.61 as it benefits from easier comparatives. That would be welcomed now that Salesforce has prioritised profitability after announcing job cuts and a restructuring plan that has appeased activist investors that had been pushing for change before becoming convinced in the last set of results that it is heading in the right direction. We could see artificial intelligence provide a boost, with investors keen to find out how its Einstein GPT, which it claims is the ‘world’s first generative AI for CRM’ and is being powered by Chat GPT creator Open AI, has performed since being launched in early March.


CrowdStrike stock: Q1 earnings preview

Tech stocks have faced the challenge of slower growth but cybersecurity is proving more resilient, with businesses forced to keep spending to protect their systems and data regardless of what the macroeconomic picture is. The largest players are also benefiting as businesses look to consolidate services in search of savings. With that in mind, revenue is expected to rise 39% to $676.95 million and annual recurring revenue is expected to rise 42% and hit a new all-time record of $2.7 billion, with new products helping drive this higher to show its expanding product range is paying dividends. Growth has slowed as the pandemic-fuelled boom in demand unwinds but these are not numbers to be sniffed at in the current environment. Adjusted EPS is expected to jump 62% to $0.51. Billings, which are forecast to rise 31% to $854.3 million, net retention rates and customer numbers will be closely watched as investors gauge whether it is keeping hold of customers and attracting new ones.


Nordstrom stock: Q1 earnings preview

Nordstrom is striving to simplify the business and revive demand and a shake-up to the board that has brought in a new chief financial officer and chief technology officer, which will now be charged with helping the company turn things around, should help. Still, analysts are not hopeful for this week’s earnings and think it will take more time for an improvement to feed through. Net sales are expected to be down over 12% from last year at $3.05 billion. That would mark the third consecutive quarter of declines and mark the lowest quarterly revenue on record for two years. That is set to be the result of lower demand across the board and Bloomberg Intelligence has implied it could perform even worse based on consumer transaction data that showed steep double-digit declines in spending during the first quarter. Meanwhile, Nordstrom is expected to sink into the red and report an adjusted loss per share of $0.12. The decision to exit Canada and close down loss-making stores, twinned with any fresh ideas from new board members, may boost margin expectations later this year, although this would also require a recovery in demand. Currently, Nordstrom is not expected to return to growth until the third quarter of its financial year. A beat or signal that it could escape the red sooner would be bullish, but it may find it difficult to find support without some upside surprise.


C3.ai stock: Q4 earnings preview

C3.ai is not the biggest stock in the world but it has caught the imagination of the markets this year and benefited from the hype around artificial intelligence. The stock is up 168% since the start of 2023, although it still trades at just a fraction of the price it traded at when it went public back in late 2020. C3.ai has already taken the element of surprise with preliminary results that revealed revenue suffered a mild dip from last year and that it remained in the red. That places the onus on the outlook. Progress made by the largest players like Microsoft and Alphabet, twinned with hugely impressive results from NVIDIA, suggests AI is providing significant momentum at a very quick rate and this will raise the bar for C3.ai. With that in mind, C3.ai must issue guidance that at least meets expectations, if not beat them. Markets want C3.ai to target $72 million in sales and an adjusted operating loss of $25.1 million in the first quarter of the new financial year.


Broadcom stock: Q2 earnings preview

Semiconductor and software firm Broadcom is experiencing a slowdown in growth and markets hope it can signal that things will recover quicker than currently expected. Revenue is forecast to rise 7.6% from last year to $8.7 billion, marking the third consecutive quarter of slower growth. Adjusted EPS is expected to come in at $10.15. That would be up 12%, a much slower rate than investors have become accustomed to in recent years. Importantly, investors believe this slowdown will continue in the third and final quarters, which means Broadcom will need to impress with its outlook if it wants to inspire the markets about the coming months ahead. We recently discovered that Broadcom will develop and make 5G radio frequency components for Apple, which is trying to source more parts in the US rather than abroad. The multi-billion dollar deal provides hope that new catalysts can improve its prospects.


Lululemon stock: Q1 earnings preview

Lululemon has been a standout performer in the retail and apparel space. While most retailers have suffered from a pullback in spending on discretionary goods like clothes, Lululemon has reliably grown sales and earnings at double-digit rates in recent years. This trend is set to continue after Lululemon said annual sales will be up about 15% this year, although this does signal that we will see a slowdown and this will be the main focus this week as investor gauge whether it can keep up the momentum. Lululemon is forecast to report a 19% rise in first quarter revenue to $1.925 billion, which is just below the top-end of its guidance range. Adjusted EPS is expected to jump 33% to $1.97, which is also at the upper-end of its range. The reopening of China should provide some momentum, although this may be countered by the slowdown in North America. Signs of benefits from inventory levels, which have grown markedly this year, would also be welcome.


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