1 Earnings Review And 3 Earnings Previews

Includes: AMZN, LVS, VFC, ZNGA
by: David Ristau

Earnings are vital for investors. Zynga (NASDAQ:ZNGA) reported earnings Wednesday. Why did the social gaming company fall so short? Is there any hope for the future? Also, Amazon (NASDAQ:AMZN), VF Corporation (NYSE:VFC), and Las Vegas Sands (NYSE:LVS) will be reporting earnings. What should investors be looking for in Amazon's earnings? Is VF Corporation a hidden gem for investors? And is the casino operator finding any success overseas? These are the questions we will be answering in this article.


Zynga reported earnings on Wednesday after the bell. While the social gaming company reported EPS of $0.01 compared to -$0.04 EPS estimates, the company's guidance was abysmal. Revenue came in at $230 million. But the company said that bookings were down 37% year-over-year and down 15% quarter-over-quarter. If that wasn't bad enough, it admitted that the company only had 52 million daily active users. This is the lowest number since 2011. Also in Q1, monthly unique payers were $2.5 million which is down 30% year-over-year.

While Q1 numbers were a mixed bag, guidance was nothing but gloomy. The company expects to lose $0.03-$0.05 per share. They expect bookings to be between $180 million and $190 million, this is down from Q1. This is not good news for the future of the struggling social gaming company.

It appears that Zynga is just waiting for the legalization of internet gambling in the U.S. The company seems to almost be shutting down in anticipation of this. It is yet to be seen if this gamble will work. What is known is that consumers are tired of paying real money for fake farm animals. The question for the future is, can Zynga compete with the larger casinos that will most certainly enter the internet gambling space.

Earnings Preview


Amazon is expected to report earnings at the end of trading on Thursday. The company is expected to report EPS of $0.09. This is compared to $0.28 EPS last year. Amazon announced it will soon be presenting a device that plays streaming internet video. This device is rumored to be much like the Roku internet TV device. This move shows Amazon's continued focus on bringing content into the average home.

The company also announced that it has increased fees for third-party sellers. This should help improve margins even more. In 2012 margins increased by 0.5%. Investors should look and see if margins are expanding. If margins struggle, look for eBay to climb higher.

Investors should also pay attention to what management reports on their cloud services. Amazon was reported to have signed a $600 million deal with the CIA to provide them with cloud services. If Amazon is expanding their private cloud services, Amazon may be able to tap into a very powerful revenue stream. If this segment of the business grows, Amazon may be a strong buy for anyone looking for a long term investment.

VF Corporation

VF Corporation is scheduled to report Q1 earnings on Friday. VF Corporations owns various clothing and footwear brands. Everything from Nautica to Timberland. The company is expected to report EPS of $2.18 EPS which would be a 12% increase over Q1 2012.

VF Corporation has shown great growth in their portfolio brands. The company is currently trading at 16.1x forward earnings with a one year growth rate of 11.9% and a three to five year growth rate of 16.7%. Compare this to the S&P 500 which is currently trading at a forward PE ratio of 17.5. If VF Corporation can show that they can continue to grow their brands, VF Corporation may be a steal for investors looking for real value.

Las Vegas Sands

Las Vegas Sands will report earnings on Monday. The casino company is expected to report $0.66 EPS with $0.76 being the higher estimate. Las Vegas Sands may be able to beat estimates considering Edward Tracy, the executive for Sands China, says they expect "mid-teens" growth in gross gaming revenue from their Macau operations. Investors should look to see if the company can continue their strong cash flows from operations and profit margins.

Currently, Las Vegas Sands is trading at 20.3x forward earnings and is expected to have 26.2% EPS growth over the course of this fiscal year. This is compared to the 17.6 forward PE ratio with an 8.6% EPS one year growth rate. If Las Vegas Sands is able to see serious growth in their overseas operations, the stock could see nice gains.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure: The Oxen Group is a team of analysts. This article was written by Micah Dickson, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.

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