Two of the hottest companies of 2020 will try to keep their momentum alive as the revenue reporting period looms in the coming weeks.
Netflix Inc. NFLX
has become one of the biggest beneficiaries of the COVID-19 crisis, as more people flock to streaming services amid quarantine measures and the absence of traditional new TV programs in the first half of the year. Now the question is whether that easy growth is past.
After adding nearly 27 million new subscribers to pay in the first six months of 2020, Netflix warned investors to prepare for a slowdown. Analysts expect only 3.8 million newly paid subscribers for the third quarter when Netflix reported results on Tuesday afternoon. This marks the lowest pickup per month in more than a year.
There’s more to Netflix than subscriber growth, however, and some analysts are unhappy about the other parts of the company’s story. The streaming giant seems to be less affected than other media companies by stopping pandemically induced production, according to Benjamin Stanley̵7;s Benjamin Swinburne. Both he and Jefferies analyst Alex Giaimo are also encouraged by a recent price hike in Canada, which indicates strong engagement with the Netflix platform and could also signal a price increase in the future.
Full preview: Has Netflix raised US prices? Recent actions suggest this may be the case
The bulk COVID-19 is not very kind to Tesla Inc. TSLA,
forced factory shutdown earlier this year, but you never know by looking at its stock, which rockets more than 400% higher so far by 2020. Even if Tesla does not meet the previously stated target of selling 500,000 vehicles by the course of 2020, investors could blame the pandemic shortage and give the company a pass, per CFRA Nelson Garrett.
A major issue for Tesla’s revenue call on Wednesday afternoon was how the company’s demand lasted. Tesla delivered 124,100 Model 3 and Y vehicles combined in the third quarter, despite having the capacity to produce at least 150,000, according to Bernstein analyst Toni Sacconaghi. That rate of use is lower “than we have seen in previous quarters, begging the question of whether demand or production is the barrier,” he wrote.
Full preview: Investors are asking if Tesla’s sales guide is complete
Netflix and Tesla highlight the best revenue reporting slates this quarter, with 84 members of the S&P 500 SPX
and eight Dow Jones Industrial Average DJIA
parts due for reporting this week. Here are some other key themes.
INTC of Intel Corp.
The report on Thursday afternoon follows a disappointing show three months back, when the company revealed a delay for the next generation of chips and said it could search for a third party to manufacture them.
Deep: How did Intel lose the Silicon Valley crown?
Intel executives are looking to restore confidence at this time, and Wedbush analyst Matt Bryson said the company “should immediately exceed expectations” after issuing a forecast he considered conservative. The company may also benefit from improved PCs and automotive demand, but it remains to be seen how much assurance the company can provide on this long-term roadmap.
Both chipmaker Xilinx Inc. XLNX
report Wednesday. Its results will be even more noticeable now that Advanced Micro Devices Inc. AMD
is said to be interested in buying the company.
For more: A deal with AMD-Xilinx is fraught with risk
Verizon Communication Inc. is a telecommunications rival. VZ
at AT&T Inc. T
may provide some early clues about iPhone needs when they report Wednesday morning and Thursday morning, respectively. Apple Inc. AAPL Preorders
The iPhone 12 and iPhone 12 Pro launched on Friday.
For more: The 5G iPhone leads to war subsidies
The two companies may also shed light on their promotional strategies for this year’s launch. AT&T has specifically taken an aggressive approach to offering $ 800 in credit credits to both new and existing customers trading on an iPhone 8 or newer model. Verizon’s most attractive deal also comes with a $ 800 subsidy, an analyst said, but it is limited to new subscribers.
The promotion of existing AT&T subscribers could help the company retain subscribers at the time rival T-Mobile US Inc. TMUS
improves the quality of its network, but history has shown that generous subsidies do not necessarily pay for carriers if the entire industry offers the same type of deals.
After United Airlines Holdings Inc. UAL
at Delta Air Lines Inc. DAL
reported major losses and warned long-term pandemic recovery timelines, Southwest Airlines Co. LUV
at American Airlines Group Inc. AAL
will offer their own insights into the situation Thursday morning. “Southwest’s main goal is to prevent furloughs, but it does not seem to be rising,” Cowen & Co. analyst wrote. and Helane Becker.
A more intense view of the travel scene could come from Royal Caribbean Group RCL,
with cruise control in almost every market. The company hopes it can see the voyages continue later this year, but William Blair analyst Sharon Zackfia sees uncertainty over time and expects Royal Caribbean to see the four-quarters capacity 5% with occupancy rate 50%.
International Business Machine Corp. IBM
In-line preliminary results have been announced for the September quarter, but Morgan Stanley’s Katy Huberty said contrary to “improving IT spending data points.” He expects the company to continue to catch up with peers as tech spenders, and he is more focused on the company’s cloud trends and the company’s cognitive businesses when IBM reports Monday afternoon. .
IBM revenues: The Chief Executive’s first big step is to evaluate more than numbers
Snap Inc. SNAP
follows its report Tuesday and its report will serve as the first signal on social-media advertising trends. Stifel analyst John Egbert expects the company’s revenue growth to “accelerate material” from second-quarter levels as ad demand returns recently. “Despite a thin feature film slate in recent months, data / anecdotes from major agencies and advertisements regarding ad market trend trends have been more positive since August,” he wrote.
Here is the Dow
IBM’s Monday report begins with a packed week of earnings reports for stocks on the Dow Jones Industrial Average. Procter & Gamble Co. PG
at Travel Cos. Inc. TRV
same report Tuesday, followed by Verizon Wednesday morning. Coca-Cola Co. KO
at Dow Inc. DOW
was on schedule for Thursday morning, with Intel that afternoon. American Express Co. AXP
circle on Sunday morning morning.