The earnings season is under way. Investors are closely watching this week’s earnings as three tech giants are scheduled to reported earnings in the coming days. They are Apple, Inc. (NASDAQ: AAPL), Facebook, Inc. (NASDAQ: FB) and Amazon.com, Inc. (NASDAQ: AMZN).
Watch Apple’s iPhone sales
Apple, Inc. (NASDAQ: AAPL) is scheduled to release its fiscal first quarter financial results after after the market closes Tuesday. The iPhone maker is expected to report revenue growth in the latest quarter after posting three straight quarter declines.
The consensus estimates from FactSet are calling for earnings of $3.22 per share on revenue of $77.4 Billion, compared with $3.28 earnings per share on revenue of 75.9 billion a year ago. Although revenue is expected to be higher, earnings is expected to experience year-over year decline due to higher cost for new products.
Apple shares are trading near 52 weeks high. The stock had gained 4.67 percent this year.
Analysts are closely watching some key areas of the company, such as iPhones sales and growth of software and services. IPhone sales contribute about 63 percent of the company’s total revenue. Analysts had projected iPhone sales to increase 3 percent to $53.1 billion.
Revenue from services segment, including App Store, iTunes, Apple Music, iCloud, Apple Pay, licensing, and other services, rose 24 percent in the most recent quarter. It became the second-biggest revenue contributor in 2016. Analysts polled by FactSet expected revenue from service to reach $6.9 billion in the current quarter.
Facebook’s Revenue Growth
Facebook, Inc. (NASDAQ: FB) is scheduled to report fourth quarter financial results on Feb 1 after market closes. Investors are closely watching whether or not the amazing revenue growth rate in advertising will finally slowdown in the fourth quarter.
Wall Street expected the social media giant to report earnings per share of $1.31 on $8.48 billion in revenue. These represent a 45 percent increase in revenue and a 66 percent increase in earnings from the same quarter a year ago.
Facebook shares dropped to $115 after the company said its advertising revenue growth would drop in the second half of 2017 in its third-quarter conference. The stock rebounded in 2017 and is trading near the 52 week high. The stock had gained 13.4 percent this year.
Investors focus on some keys areas like mobile ad growth and user growth. In the third quarter,
Mobile ad revenue rose 70 percent to $5.7 billion, accounting for 84 percent of total ad revenues. Investors are cautious about the growth rate as the company warn it may slowdown in the second half of 2017. User growth is healthy and monthly active users hit 1.79 billion in the most recent report. Increasing monetization of Instagram, Facebook Messenger and Whatsapp may become a driver for revenue growth.
Amazon: Keep an eye on Expenses
Amazon.com, Inc. (NASDAQ: AMZN) is scheduled to post its fourth-quarter financial results on Thursday after the market closes. Investors are watching how the company performed during the holiday season and how much money the company spent in the quarter.
The e-commerce giant is expected to report earnings per share of $1.41 on $44.84 billion in revenue, according to Zacks. These represents a 25.44 percent increase in revenue and a 41.45 percent increase in earnings from the same quarter a year ago.
Amazon shares are currently trading above $830. The stock was trading as low as $719 in November after the company missed third quarter earnings as Trump won the election. The stock rebounded in 2017 and gained 10 percent this year.
Investors are keeping eyes on the company’s prime business, Amazon Web Services as well as its investments in the fourth quarter. The number of customers signing up for Amazon Prime rose 38 percent last quarter and may keep its robust growth in the upcoming quarter as Amazon Prime was launched in China in October. Its cloud-computing business is still main driver of revenue growth. Sales from AWS rose 55 percent last quarter. However, the company is spending heavily on many other investments like building fulfillment centers, creating original video contents and hardware offering such as Amazon Echo and Fire TV, which may not reflect in revenue immediately.