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Corporate earnings calendar: August 29 – September 1

We are now at the end of the Q2 US earnings season but markets still have some updates to play with. We have results from CRM behemoth Salesforce (CRM) and cybersecurity software company CrowdStrike (CRWD), as well as computer makers HP (HPQ) and DELL. Notably, both Broadcom (AVGO) and VMware (VMW) are reporting this week as they continue to make progress on their mega-merger.

China will also remain in focus with updates due out from Ping An Insurance, e-commerce firm Pinduoduo, and electric vehicle maker NIO. Swiss bank UBS will also be under the spotlight following its rescue of Credit Suisse earlier this year.

UK markets are closed for the bank holiday on Monday and the calendar is light for the remainder of the week, with distributor Bunzl, insurer Prudential, and oil company Gulf Keystone Petroleum atop the agenda.

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

(*Unconfirmed)

Salesforce stock: Q2 earnings preview

Salesforce has made improving profitability a priority and is starting to reap rewards, an aptly timed move considering it is suffering from a slowdown in demand.

Revenue is forecast to rise 10.5% from last year to $8.526 billion, which would mark the seventh consecutive quarter of slower growth as businesses become more stringent with their spending.

Notably, Salesforce has said current remaining performance obligations – representing the amount of work it has been paid for but yet to complete and used as an indicator of future revenue growth – will rise about 10% year-on-year in the second quarter but Wall Street has pencilled-in a much slower rise of just 3.2%, suggesting analysts are more pessimistic and that Salesforce needs to convince them about its outlook. Salesforce could start to see a boost from higher prices as we move into the second half, although this could impact the number of customers willing to renew more expensive contracts going forward.

Keep an eye on AI developments after Salesforce launched Einstein GPT in the first quarter to help clients improve efficiency.

Adjusted EPS is expected to rise 59% and hit a new all-time high of $1.90. Its adjusted operating margin – a key metric – should improve to around 28.2% in the quarter compared to just 19.9% the year before as Salesforce focuses on driving profitable growth.

Keep an eye on how the third-quarter outlook compares to expectations. Wall Street is looking for sales of $8.66 billion and adjusted EPS of $1.84. Salesforce is currently aiming to deliver annual sales growth of about 10% and a 42% rise in full-year adjusted EPS.

CrowdStrike stock: Q2 earnings preview

CrowdStrike has risen over 40% in 2023 as overall demand for cybersecurity remains resilient, allowing the firm to report record sales, earnings and cashflow in the last quarter. Still, the stock is trading at almost half the peak valuation we saw when markets went on an over-zealous buying-spree of tech stocks back in 2021.

This should mark another quarter of progress. Revenue is forecast to rise 55% from last year and hit a new record of $724.9 million. Annual recurring revenue should climb 40% and also hit a new high of $2.98 billion.

The improved billings outlook recently posted by larger rival Palo Alto Networks heightens the pressure for CrowdStrike to provide a bullish tone to show that it is successfully competing against the bigger players. CrowdStrike’s remaining performance obligations should be up around 35%, providing better visibility over future growth than some others in the industry.

Adjusted EPS is seen coming in at $0.56, up 55% from last year but one cent short of the record figure we saw in the previous quarter.

As for the third quarter outlook, analysts are looking for revenue of $774.5 million and a new record adjusted EPS figure of $0.60. CrowdStrike is aiming to deliver annual sales growth of around 35% and a 55% rise in full-year adjusted EPS.

Broadcom and VMware stock: Earnings preview

Broadcom launched a $69 billion takeover of VMware in May 2022 and has been trying to clear the regulatory hurdles ever since. Broadcom is confident it will secure all the approvals needed by the end of October, but the pair recently extended the deadline to complete the deal to November 26. Broadcom is trying to make a big push into cloud computing and software by buying VMware.

The pair have made progress, but are still not home and dry. Regulators in the UK, European Union and a number of other countries including Canada, Brazil and Taiwan have all given the deal their approval, and Broadcom has said that the period for US regulators to challenge the deal has expired. However, it still needs some other approvals, most notably from China - where some analysts have flagged the risk of it being used as a pawn amid rising US-China tensions.

We expect investors and analysts to question progress on the deal this week, although it is unlikely much has changed since the update just a few days ago. Therefore, the primary job is to show both companies remain in the right gear to get markets excited about the prospects they will have if they manage to join forces.

With that in mind, Broadcom is forecast to report its slowest quarterly revenue and earnings growth in three years! Revenue is forecast to rise 4.8% to $8.86 billion while adjusted EPS is forecast to rise 7.4% to $10.45. The company makes chips that go into smartphones (it is a supplier for the Apple iPhone) and other devices, where demand has unwound after the boom we saw during the pandemic. Markets are hopeful that its arm that sells chips used in datacentres can reap rewards from increased demand for AI, although Wall Street is not anticipating any tangible boost in the immediate future. Keep an eye on guidance for the current quarter, with analysts looking for revenue of $9.29 billion and adjusted Ebitda of $5.89 billion.

VMware is forecast to report a 3.6% year-on-year rise in revenue in the second quarter to $3.45 billion, driven by its subscription services. Billings are expected to fall for the first time in a year, partly because of tougher comparatives, while remaining performance obligations could come in flat and spark woes about future growth. Adjusted EPS is seen climbing 4.4% to $1.71.

Pinduoduo stock: Q2 earnings preview

This could be a tough quarter for Pinduoduo, which is struggling with rising costs, more fierce competition and a lacklustre Chinese economy.

Revenue is forecast to grow 38% from last year to RMB43,282 million in the second quarter. While strong, that would be the fourth consecutive quarter of slower growth and the mildest topline expansion seen in 18 months.

The headline earnings figure to look out for is adjusted net income, which is forecast to rise just 0.3% from last year to RMB10,804 million. That will be the most stagnant growth seen since it turned profitable in 2021 and analysts believe it will report its first fall in the third quarter, painting a bleaker outlook as sales continue to slow too.

Margins have tightened as Pinduoduo is seeing costs increase at a time when demand is slowing down. R&D and marketing costs continue to rise as Pinduoduo tries to fight against more intense competition, while its ongoing expansion, including overseas, is also not cheap.

NIO stock: Q2 earnings preview

NIO has underperformed this year as the inflationary environment and the relentless price war with competitors makes it all the more difficult for the company to grow and escape the red, but this quarter should show several green shoots that should improve confidence.

We already know that it delivered 23,520 vehicles in the second quarter. That was down over 5% from the year before and a marked drop from the 31,044 shifted in the first quarter amid more fierce competition. NIO is expected to report an 11% year-on-year drop in quarterly revenue to RMB9.15 billion, hit by both lower volumes and prices.

However, NIO’s fortunes have changed since it launched its new ES6 in May and ramped-up output of the ET5 Touring in June, with the new models having reinvigorated demand. We have seen deliveries rise from 6,155 in May to 10,707 in June and 20,462 in July, showing the new models are providing some much-needed momentum for the second half.

Keep an eye on the outlook for third-quarter deliveries, with analysts hoping NIO will target a big jump in deliveries to around 48,460. The guidance for revenue is also key as it will reveal the impact of the price war. Analysts are looking for it to target quarterly sales of RMB17.2 billion.

We saw NIO’s gross margin tighten to its lowest rate on record at just 1.5% in the first quarter as rising costs and the ongoing price war took their toll. However, markets believe that will be the trough and see it starting to make a recovery to 3.3% in the second, and pencilling-in a significant acceleration in the second half and see it returning to double-digits. Still, that means the adjusted loss per ADS for the second quarter is forecast to come in at RMB2.41, which would be significantly wider than the RMB1.34 loss the year before.

A big ramp-up in deliveries and a recovery in margins paints a rosier outlook for NIO in the second half compared to what we saw in the first. However, the disappointing performance of the Chinese economy and more intense competition poses a threat to estimates.

Bunzl share price: H1 earnings preview

Bunzl, which distributes everyday supplies like disposable paper and plastic packaging, has taken the element of surprise away ahead of its first half results after it issued a pre-close statement back in June.

Bunzl has said revenue will be up 4% to 5% from last year, which should see it deliver a figure of around £5.9 billion. Still, most of that will be down to favourable foreign exchange rates, with constant currency growth to come in at a tepid 1%, and that in turn is all being driven by acquisitions rather than organic growth.

Bunzl has said underlying revenue growth fell moderately across North America because of weakness in the foodservice sector, although it said some of this should be temporary. The UK & Ireland should be the bright spot, followed by Continental Europe. The Rest of the World will underperform as it is still suffering from lower sales stemming from Covid-19 products, like masks.

It has said adjusted operating margins should be level with what we saw the year before at 7.3%. The topline growth twinned with a steady margin should translate to a 4.9% rise in adjusted operating profit to £431.7 million.

Bunzl upgraded its guidance in June, making any further changes less likely. It is aiming to push annual revenue ‘slightly higher’ at constant currency and has said its adjusted operating margin will be ‘slightly lower’ than the year before.

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