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Earning reports from household names this week. PART 2

by Jul 27, 2021Market Reviews

With Monday earning reports out of the way, it is now time to turn our attention to the reports due Tuesday. Interestingly, Half of FAANG are releasing earnings reports today. For this reason, expect a hyperactive NASDAQ during the Tuesday session.

 

Let’s start with Apple Inc (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT)

The two largest companies in the US, APPL and MSFT, are reporting one after another on Tuesday.

The Market Analyst seated to the left of me, Pavan Sharma, from the equities research arm of BlackBull Markets (check them out for astute stock picks), shared the following interesting graphic from 2020 with me that demonstrates the enormity of Apple.

airpods

This graphic begs the question; how many Air pods did Apple sell in Q3 2021, and how much this device contributes to the Company’s Q3 revenue?

Revenue for Apple is anticipated to be US $73B, up by more than US $10B over the PCP. Air pods might be a smaller portion of the Company’s Q3 revenue depending on how well the iPhone 12 has sold in the quarter and whether Apple has experienced any Air pod supply constraints.

When it comes to Microsoft, investors will want to see if it has maintained its cloud service revenue growth. Cloud is now the software Company’s most significant revenue stream and should hopefully account for more than US $14B of the US $44B expected revenue for the quarter. Microsoft’s past success in cloud computing might be its downfall this quarter. Maintaining a 25% YoY growth in its cloud division is a big ask.

As an aside, BlackBull Markets research arm’s top tech pick is Apple for several reasons. The main reason being its strong brand presence and ability to make healthy margins on its wide variety of products and services with strong growth potential anticipated on new products and services as well – particularly digital services complementary to its core business. Apple also has a solid balance sheet with ~$196 billion in cash, which can be deployed to reinvest in new offerings or acquisitions, and on traditional valuation metrics is more attractively priced than its mega-cap peers with a solid history of paying a growing dividend.

APPL and MFT earning reports will drop after the closing bell on Tuesday.

 

Mattel (NASDAQ: MAT) likely to surprise

Because I covered Hasbro (NASDAQ: HAS) yesterday, I want to cover Mattel, another big toymaker, today.

Mattel EPS

Mattel has made a habit of making pessimistic projections, whether underselling their projected profits or overselling their projected losses. For this reason, the Company’s actual earnings-per-share are likely to surprise the market when Mattel releases its earnings report after Tuesday trading concludes.

Mattel’s earnings for its Q2 operation is expected to be slightly above USD 900M, up 23% from the PCP when it was contending with the Covid-related closure of many of its retail partners.

 

Other earning reports to watch Tuesday:

  • General Electric (NYSE: GE)
  • Alphabet (NASDAQ: GOOG)
  • AMD (NASDAQ: AMD)
  • Starbucks (NASDAQ: SBUX)
  • Visa (NYSE: V)
  • Mondelez International (NASDAQ: MDLZ)

 

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