OZK - Earnings Week Ahead: Tesla AT&T Charles Schwab Netflix and more

2023-04-14 14:30:56 ET

Earnings season heats up in mid-April with a host of earnings results due from the likes of Tesla ( NASDAQ: TSLA ), Netflix ( NFLX ), Johnson & Johnson ( JNJ ), Lockheed Martin ( LMT ), and a host of financial giants. Bank of America ( BAC ), Goldman Sachs ( GS ), State Street Corporation ( STT ), Western Alliance ( WAL ), and Silvergate Capital ( SI ) lead off the week, followed by a host of reports from the recently-roiled regional banking sector.

Aside from the closely watched financial earnings, Tesla ( TSLA ), AT&T ( T ), Philip Morris ( PM ), Taiwan Semiconductor ( TSM ), as well as a slate of major airline and rail operators headline the mid-week. Friday, typically a quiet day, also holds a few key earnings reports with Procter & Gamble ( PG ) and SLB, the former Schlumberger ( SLB ) on the radar.

Below is a rundown of major earnings reports due in the week of April 17 to 21.

Monday, April 17

The Charles Schwab Corporation ( SCHW )

Charles Schwab ( SCHW ) is due to post its Q1 earnings results before the bell on Monday. Shares of the Texas-based financial services giant have plummeted in the wake of Silicon Valley Bank’s collapse, falling over 30% since the start of March . However, the firm has stated that it raked in assets since that collapse. In March, the company reported $16.5B in core net new assets, adding over $53B by the end of the month. Analysts remain divided on the stock, however, with Credit Suisse upgrading the stock after the recent sell-off and Morgan Stanley downgrading at the close of March.

• Consensus EPS Estimates: $0.91
• Consensus Revenue Estimates: $5.15B
• Earnings Insight: Charles Schwab has beaten EPS estimates in 4 of the past 8 quarters, exceeding revenue expectations in 5 of those updates.

Also reporting: State Street Corporation ( STT ), JB Hunt Transportation ( JBHT ), M&T Bank Corporation ( MTB ), and Pinnacle Financial Partners ( PNFP )

Tuesday, April 18

Netflix ( NFLX )

Netflix ( NFLX ) is set to provide quarterly earnings figures after the bell on Tuesday. The California-based streaming giant’s stock has rebounded sharply in recent months, rising over 50% in the 6 months ahead of the earnings report and over 100% from 2022 lows. Bank of America recently named the stock a top pick for Q2 , noting domestic subscriber trends appear positive . The bank’s analysts, along with much of the Street, also anticipates commentary on the progress of password sharing crackdowns.

“In our view, the password sharing crackdown will result in a greater number of subs as well as revenue because the primary account holder will either pay an additional fee for members who have moved out of the household or those sharing accounts become full subscribers,” the firm’s analysts wrote.

Oppenheimer also remained upbeat on password enforcement in a note previewing the report . On the other hand, Benchmark recently maintained a Sell rating , advising that a crackdown could aid competition and indeed promote churn.

• Consensus EPS Estimates: $2.86
• Consensus Revenue Estimates: $8.18B
• Earnings Insight: Netflix has beaten EPS expectations in 6 of the past 8 quarters, rising above revenue estimates in 5 of those updates.

Sector Spotlight: Further Perspective on Financials

Bank of America ( BAC ), Goldman Sachs ( GS ), Western Alliance Bancorp ( WAL ), Silvergate Capital ( SI ), and Bank of New York Mellon ( BK ) are all due to report on Tuesday, followed by Morgan Stanley ( MS ), US Bancorp ( USB ), Discover Financial ( DFS ), Synchrony Financial ( SYF ), Zions Bancorporation ( ZION ), Ally Financial ( ALLY ), and Citizens Financial Group ( CFG ) on Wednesday. Truist Financial ( TFC ), Bank OZK ( OZK ), Regions Financial ( RF ), Fifth Third Bancorp ( FITB ), Comerica Corporation ( CMA ), and KeyCorp ( KEY ) are among major reports due later in the week.

The slate of earnings follows reports from Wells Fargo ( WFC ) and JP Morgan ( JPM ) on Friday which helped lift the sector and assuaged some fears of a spreading crisis. Wells Fargo topped top and bottom line expectations while JP Morgan ( JPM ) not only beat the Street consensus, but boosted its net interest income forecast on top of a beat that included a revenue report $2.5B above expectations . Citi ( C ) also exceeded expectations for its quarterly report. The big banks set a high bar heading into the slate of regional earnings results.

Also reporting: Lockheed Martin Corporation ( LMT ), Johnson & Johnson ( JNJ ), Ericsson ( ERIC ), United Airlines ( UAL ), and Prologis ( PLD )

Wednesday, April 19

Tesla ( TSLA )

In likely the most closely-watched report of the week, Tesla ( TSLA ) will post its Q1 results after the bell on Wednesday. The Elon Musk-led automaker’s stock has risen over 70% to start 2023, rebounding sharply from a deep decline in 2022. Still, the stock has marked a double-digit slide to start the calendar second quarter as price cuts and somewhat disappointing deliveries were reported. According to analysts, further price reductions for popular models could be on the way in coming quarters.

“We believe additional price cuts in other geographies are likely,” Bernstein analyst Toni Sacconaghi told clients. “The fact that Tesla is cutting price on its longest lead time model suggests other price cuts are likely to follow, particularly since Model 3 SR rebates will fall $3750 on 4/18, and competition continues to intensify. Make no mistake - the price cuts reflect Tesla's need to stimulate demand and are an explicit trade off of margins for volume.”

Additionally, privacy concerns after a bombshell report about the sharing of images captured by customer cameras pressured shares to start Q2.

Elsewhere, the company announced an expansion of its footprint in China, outlining plans to build a new factory in Shanghai to produce its Megapack large-scale energy unit. Tesla CEO Elon Musk also made a visit to China to announce the factory, offering commentary for domestic media. Further price cuts are also anticipated in the region .

• Consensus EPS Estimates: $0.85
• Consensus Revenue Estimates: $23.38B
• Earnings Insight: Tesla has beaten EPS estimates in 8 consecutive quarters, missing revenue expectations once in that span

Also reporting: American Airlines ( AAL ), ASML Holding NV ( ASML ), IBM ( IBM ), Lam Research ( LRCX ), Abbott Labs ( ABT ), Baker Hughes ( BKR ), Equifax ( EFX ),  Kinder Morgan ( KMI ),Las Vegas Sands ( LVS ), and Alcoa Corporation ( AA )

Thursday, April 20

AT&T ( T )

AT&T ( T ) is set to report its fiscal first quarter results in premarket hours on Thursday. Management maintained full-year guidance as recently as March, voicing confidence in the business despite macro turmoil.

“We don't know how to predict what's going to happen," Chief Operating Officer Jeff McElfresh said at a Morgan Stanley conference . “But I am confident we've proven we know how to manage through any kind of turbulence that we see there as we experienced in 2022.”

Analysts have trimmed EPS expectations 9 times in the 90 days ahead of earnings. The consensus sell-side rating remains a Buy . Investing Groups Leader Daniel Jones also rated the stock a Strong Buy, forecasting a decline in debt levels and a focus on growth initiatives for the long term.

Elsewhere, the company is said to be exploring a sale of its cybersecurity unit.

• Consensus EPS Estimates: $0.59
• Consensus Revenue Estimates: $30.23B
• Earnings Insight: AT&T ( T ) has risen above EPS expectations in 8 consecutive quarters, missing revenue estimates in 3 of those reports.

Also reporting: Philip Morris ( PM ), Taiwan Semiconductor Manufacturing ( TSM ), American Express ( AXP ), Stellantis ( STLA ), CSX Corporation ( CSX ), KeyCorp ( KEY ), Bank OZK ( OZK ), Fifth Third Bancorp ( FITB ), Alaska Airlines ( ALK ), Truist Financial ( TFC ), Knight-Swift Transportation Holdings ( KNX ), Nucor ( NUE ), Union Pacific ( UNP ), and AutoNation ( AN )

Friday, April 21

Procter & Gamble ( PG )

Procter & Gamble ( PG ) headlines an unusually busy Friday with its fiscal third quarter report due before the bell. Shares of Procter & Gamble ( PG ) have risen over 20% in the past 6 months, benefiting from a defensive shift from investors . Analysts have trimmed EPS expectations 15 times in the 90 days ahead of the report. Both JP Morgan and Citi upgraded the stock amid the shift in sentiment.

“We believe PG’s strategic changes implemented over the past few years have driven a sustainably higher organic topline growth outlook and put the company in a better position to navigate through a challenging macro environment,” Citi told clients in a recent shift to Buy .

• Consensus EPS Estimates: $1.32
• Consensus Revenue Estimates: $19.29B
• Earnings Insight: Procter & Gamble ( PG ) has beaten EPS expectations in 7 of the past 8 quarters, rising above revenue estimates in all 8 of those reports.

Also reporting: SAP SE ( SAP ), Regions Financial ( RF ), SLB ( SLB ), Autoliv ( ALV ), and Biogen ( BIIB )

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