A majority of earnings season has passed, and as usual, you have your winners and losers. The markets have done well so far through earnings, and they will look to do so again this week. This week may be more about the monthly jobs report at the end of the week, but there are several large names reporting this week. I'm going to focus on seven names in particular, with an added emphasis on one. For some of these names, the reports may not seem that much more important than usual, but a couple of these names are reporting their most important quarters in years.
Amazon (AMZN) - Tuesday, after bell: The online retail giant will report its fiscal fourth quarter and full year results Tuesday afternoon, and it is going to be widely watched.
Normally, everyone would be flocking to this report to see how holiday sales went. They will be watching it for that reason again. However, there is an added reason this quarter. This is Amazon's first quarter selling the Kindle Fire, a tablet device that could drive the next few years of Amazon's growth. Did Amazon sell 3 million units in the quarter, 5 million perhaps? Even More? We should find out Tuesday.
Now let's look at some expectations for the quarter. Revenues are expected to increase by more than 40% to $18.2 billion. This number is towards the upper end of Amazon's give guidance at the end of last quarter, which was a range of $16.45 billion to $18.65 billion (midpoint of $17.55 billion). When Amazon reported that quarter, analysts were expecting $18.1 billion. They have come up about $100 million since then, which does lead some room for Amazon to miss.
When they reported those 3rd quarter results, analysts were expecting $0.84 per share in the 4th quarter, versus 2010's $0.91. However, Amazon told us that operating income would be in a range of a $200 million loss to $250 million gain. That doesn't leave much for the bottom line. Analysts are expecting 19 cents a share in the quarter. That indicates a profit of about $90 million, which given the operating income guidance, again leaves some room for a miss. We know Amazon's costs will be up because of the Kindle introduction.
Now onto the full year results. Analysts are expecting revenues to be up about 43% to $48.84 billion. We know that Amazon's margins have been down and increased costs from the Kindle Fire will hurt EPS, which are projected to fall from $2.53 to $1.18. Currently, 2012 estimates have revenues rising by 33.7% to $65.3 billion. Analysts are expecting a rebound in EPS to $1.88 currently, but we'll see if that actually happens. Amazon's low margin business doesn't exactly generate tons of profits.
Amazon fell nearly $30 to $198 after last quarter's report. It is about $3 below that level currently, which means investors haven't fully bought into this quarter just yet. I think the key for Amazon is the sales. If they miss on EPS but beat on the revenue number, the street could possibly give them a pass on the Kindle roll out. However, if they miss the sales number, look out below. I'm not going to predict which way it will move after earnings, but I think it will see $15 to $20 of upside if it goes higher, but $25 to $30 of downside if it goes lower.
Now onto the six other names I'll be watching closely, in order of when they report this week.
Baidu (BIDU) - Monday, after bell: The Chinese internet search giant will report fourth quarter and full year results early in the week. Baidu is expected to show explosive growth, and expectations are extremely high. For the quarter, revenues are projected to rise by more than 88% to $699 million. Earnings per share are expected to jump from $0.50 to $0.91. Like I said, expectations are high.
For the full year, revenues are expected to rise by 87% to $2.24 billion. Earnings per share are expected to climb from $1.53 to $2.95. It's going to be a good year for Baidu, but they will need to meet these expectations to keep the high valuation shares trade at. Baidu is the largest Chinese internet name right now, and it has been one of the safer investments recently. It ran up on Friday thanks to the Facebook news, and I'd be a little cautious if it trades higher again on Monday into the report. The growth will be high, but will it be high enough to justify the lofty valuation? For 2012, the growth rate will slow down, but we are still looking at top and bottom line expectations for more than 50 percent.
Exxon Mobil (XOM) - Tuesday, before bell: One quarterly report that is not very crucial, but Exxon is still the 2nd largest company trading in America, and has been the largest for a while. The company will report fourth quarter and full year results. Some other big name energy companies have had disappointing results, so we'll see if Exxon follows that trend. Given their market cap, their report will have some impact on the markets Tuesday.
For the fourth quarter, revenues are estimated to rise by nearly 14% to $119.7 billion. For those that are new to this stock, yes, I did just say $119.7 billion. Earnings per share are projected to rise by a dime to $1.95. For the full year, revenues are expected to rise by 26% to over $482.7 billion. Earnings per share are expected to climb from $6.22 in 2010 to $8.42 in 2011. Revenues are currently projected to decline by two percent in 2012, with earnings per share declining by half of that amount in percentage terms.
Green Mountain Coffee Roasters (GMCR) - Wednesday, after bell: Another one of 2011's battleground stocks will report first quarter numbers in the middle of the week. This growth stock got hammered in the second half of 2011, especially after a terrible 4th quarter report where they missed revenues by $50 million.
The company is going to have to prove this week that it had a strong holiday season and that the growth is still there. Analysts are expecting a huge number, the highest revenue growth rate in several years. Revenues are projected to be up by nearly 85% to $1.06 billion. That number is at the high end of the analyst range. Earnings per share are expected to double to $0.36 per share. This will be the highest growth rate quarter of their fiscal year, so they better do well. If they miss again on the top line, this stock will get punished like last quarter. Analysts are projecting 60% revenue growth this year, with much of that being in this quarter. There are several other red flags surrounding the name currently, so they need to make their revenue and earnings numbers to remain trading at these levels, and perhaps regain some of their recent losses.
Chipotle Mexican Grill (CMG) - Wednesday, after bell: Chipotle will report Wednesday afternoon as well, and this has been another big growth name fetching a lofty premium. Chipotle is growing, but its same store sales have been a bit light in recent quarters, with a lot of growth coming from new stores. Chipotle needs growth from both.
For the fourth quarter, analysts are expecting revenues to rise by 22.3% to $590 million. Earnings per share are projected to climb from $1.47 to $1.82. It will need to be impressive to justify the premium shares trade at. For the full year, revenues are expected to climb by 23% to $2.26 billion. Earnings per share are expected to climb by a slightly smaller amount, from $5.64 to $6.85. Revenues in 2012 are projected to rise by about 20%, with earnings per share rising a little faster. Again, the company needs to continue strong growth to maintain a premium, currently trading at 42 times 2012 earnings.
Qualcomm (QCOM) - Wednesday, after bell: We all know that Apple (AAPL) had a great quarter based on the iPhone, but what about those who supply components for the phone? We'll find out when this chip giant reports its first quarter results, also on Wednesday afternoon.
For the quarter, analysts are expecting revenues to increase by 36.5% to $4.57 billion. However, margins are coming down, so earnings per share are only expected to rise by 8 cents to $0.90. For the current fiscal year, ending in September, revenues are estimated to rise by more than 23% to nearly $18.5 billion. However, like the quarterly results, earnings per share are expected to rise by a much smaller amount, about 11% to $3.57.
Mastercard (MA) - Thursday, before bell: The credit card giant has gotten off to a poor start in 2012, but a good earnings report later in the week could help shares start rising again. The company will report fiscal fourth quarter and full year results Thursday morning.
For the quarter, revenues are expected to climb by 20% to $1.73 billion. We'll see if they had a really strong holiday season, or if cash payments dominated. Earnings per share are expected to increase by a slightly larger percentage, from $3.16 to $3.93. For the full year, revenues are expected to increase by 21% to $6.71 billion. Again, earnings per share should rise by a higher amount. Current expectations see a rise from $14.05 to $18.60. Some may question the valuation, but the name is trading at just 16 times 2012 earnings. Given the recent pressure the name has been under, a good earnings report should get the stock going again.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in BIDU over the next 72 hours.