What To Expect When Your Favorite Company Reports

by: Bill Maurer

Earnings season has just begun, and things are really about to heat up. As we get closer to the bulk of companies reporting, I'm here today to cover a number of companies that I'll be following, including several of which I will write earnings wrap ups for. Today, I'll discuss about a dozen or so names, where the estimates stand for each, and for some, a brief analysis. For this article, I'll go in order of when each will report (based on the most recent announcements).

Intel (INTC): Intel will report on July 17th after the bell. As I recently discussed, analysts see weakness ahead for Intel. A number of analysts have cut this quarter's (Q2) estimates as well as their full year numbers, based on macroeconomic weakness, both in the U.S. and Europe, as well as the anticipation of Windows 8 product releases later this year. Current Q2 estimates call for a 4.1% increase in revenues to $13.57 billion. Earnings per share are forecast to decline by two cents to $0.52, and Intel has beaten estimates in the past four quarters. As I noted in the above linked article, multiple Intel analysts think Intel will cut its full year revenue forecast next week. Analysts currently see full year revenue growth of 5%, and the latest Intel forecast was for 7% to 9% growth.

Yahoo (YHOO): The struggling internet name will also report July 17th after the bell. Revenues are currently forecast to rise by just 1.8% to $1.10 billion. Earnings per share are forecast to rise by a nickel to $0.23. Yahoo has beaten analyst estimates in two of the past four quarters, matching estimates in the other two quarters. Investors will be looking to hear how Yahoo's search for a permanent CEO is coming.

Verizon (VZ): The first insight into iPhone numbers will come when Verizon reports before the bell on July 19th. Current estimates call for a 3.7% revenue increase to $28.54 billion. Earnings per share are forecast to rise from $0.57 to $0.64. Verizon has beat earnings estimates in three of the past four quarters, while missing one. Verizon offers many different services, but a lot of the headlines will focus on the iPhone numbers.

Philip Morris (PM): Philip Morris will also report on the morning of the 19th. The company recently took down full year guidance due to currency headwinds. Currently, Q2 estimates call for a 2.9% decline in revenues to $8.04 billion. Earnings per share are expected to remain at $1.34, thanks to the company buying back billions of dollars worth of shares each year. Philip Morris is a great value name (see any of my articles), but wait for a pullback from the 52-week high before buying.

Intuitive Surgical (ISRG): All eyes will be on the technology and healthcare giant when the company reports on the afternoon of the 19th. This will be an especially interesting report after the blowup from Mako Surgical (MAKO). Current estimates call for ISRG to report revenue growth of 22.6% to $521.77 million. Earnings per share are forecasted to jump from $2.91 to $3.53. Intuitive Surgical is known for blowing out estimates, which it has done especially in recent times, and will need to do so again to justify the high valuation with which this stock trades at.

Microsoft (MSFT): Microsoft will be one of two tech giants to report after the bell on the 19th, one of this quarter's biggest earnings days. Microsoft's revenues are forecast to increase by 4.6% to $18.16 billion. Earnings per share are forecast to decline, however, from $0.69 to $0.62. That earnings decline estimate has increased over the past two months, as analysts have taken down their overall estimate by 4 cents. Microsoft has beaten earnings estimates in three of the past four quarters, and matched estimates in the other quarter. Analysts and investors will surely be listening in for more details on Windows 8 product releases, including that of the new Surface tablet.

Google (GOOG): Google will also release earnings that afternoon, probably within minutes of Microsoft. Analysts are looking for revenues of $8.55 billion, up 23.7% from last year's period. That number is after subtracting traffic acquisition costs. Including TACs, Google reported revenues of $9.03 billion in the prior year quarter. On a non-GAAP basis, analysts are looking for $10.05 in EPS compared to last year's $8.74 (that's the non-GAAP number). Google's Nexus tablet was recently announced, and long investors are hoping that the product offering can help shares get out of the range. Google shares have underperformed the market over the past few years, and have been stuck in a range for most of that time.

AT&T (T): The second round of iPhone activation numbers will come in on the morning of July 24th. Analysts are looking for a 1.1% revenue increase to $31.85 billion. Earnings per share are expected to increase even more, from $0.60 to $0.63. Like Verizon, AT&T is much more than just a seller of the iPhone, but that is a number that many people are going to be watching closely.

Apple (AAPL): Just a few hours later that day (24th), Apple will report its fiscal third quarter earnings after the bell. With the first full selling quarter in the U.S., the iPad is expected to do tremendous unit sales numbers. However, iPhone numbers are expected to decline from Q2 as consumers hold back purchases waiting for the new version later this year. That will pressure margins a bit. Current estimates call for revenues to soar by 30.9% to $37.41 billion. Earnings per share are expected to rise from $7.79 to $10.39. Apple always beats its own expectations, and that is the key. It has beat analysts' expectations in three of the past four quarters, with one quarterly "miss" where expectations were just too high. Look for Apple to report a good quarter, and expect their guidance to be very conservative. Apple usually provides conservative guidance, and with many expecting low iPhone sales next quarter in anticipation of the new model, guidance will definitely below what the street is looking for currently.

Netflix (NFLX): The good news for Netflix is that if they have a bad report, it will be buried in the headlines because they are reporting the same afternoon as Apple. The bad news for Netflix is that if they report a good quarter, it will be buried in the headlines because they are reporting the same afternoon as Apple. After stating on the Q1 report that Q2 subscriber adds would be slow due to seasonality effects, Netflix shares plunged as investors again thought growth was peaking. Current estimates call for revenues to grow by 12.7% over last year to $888.96 million, mostly thanks to the growth in international markets. Netflix is losing revenues from its DVD segment as it shifts to a streaming business moving forward. Because of that, and the international expansion, Netflix earnings per share are forecast to fall from $1.26 to just five cents. Netflix has actually crushed analyst estimates over the past four quarters, but investors will be focused on the guidance. If they can prove that subscriber numbers are growing, this stock can rise. But if this "seasonality" turns out to be more than a one quarter issue, Netflix shares will see new lows before the end of the summer.

Sprint (S): Two days after we get the total iPhone number, we'll see how many of those phones were sold by Sprint. Sprint is hoping that their unlimited plan steals customers from Verizon and AT&T. The company is also deep in debt, upgrading its network, and losing tons of money. Analysts believe that Sprint's revenues will increase by 5.1% to $8.73 billion. However, forecasts call for earnings per share to decline to a loss of 40 cents from last year's Q2 loss of 28 cents. Sprint has beaten estimates handily in the past three quarters, only because estimates have been extremely low. I wouldn't not be surprised if Sprint beats estimates, but still posts a year over year decline in earnings. Margins are coming down thanks to the iPhone.

Facebook (FB): Later that afternoon (the 26th), Facebook will report its first quarterly earnings as a public company, after the bell. It will be a very widely watched event, probably just as big as the Apple report, even though it shouldn't be. Current estimates call for $1.15 billion in revenues and $0.12 in earnings. But I personally don't care about the numbers, not yet anyway. For this report, I'm more concerned about how they present themselves. I am curious to find out how the earnings release is structured, who will talk on the call, and how the call will be structured. At this point, I'm more concerned about the process, especially after the IPO fiasco. The financials will matter to most, but not to me, not right away anyway.

Priceline (PCLN): The online travel giant will report on August 7th after the bell. After Priceline gave its usual conservative guidance with last quarter's report, investors feared that problems in Europe were taking more than just a small toll on Priceline's revenues and earnings. We'll see in about a month. Analysts are looking for a 22.8% rise in revenues to $1.35 billion. Earnings per share are expected to jump from $5.49 to $7.36. Priceline has beaten estimates handily in the past four quarters. It does give conservative guidance often, and that has knocked down the stock in the past a couple of times, even when they have beaten estimates quite nicely.

SodaStream (SODA): SodaStream, the company that allows you to make your own soda at home, will report the morning of August 8th. This is the first quarter they will be officially reporting (and analysts will be estimating) results in U.S. dollars (formerly used euros). Current estimates call for a 17.2% jump in revenues to $90.58 million. Earnings per share are forecast to rise from $0.42 to $0.46. This high-growth company had one of the biggest stock collapses of 2011. It has rallied back a bit from its lows, but it remains a short seller favorite. If they miss expectations, it will be questioned as a fad. If they beat, investors will want them to keep proving it. A lot of their business comes from Europe, so we'll see how that (and currency fluctuations) have affected operations.

These are just 14 investor favorites scheduled to report over the next month. I could go on, but you get the picture. Q2 earnings season is now in full bloom, and this is what's currently expected of these names. As always, you should always do your research before entering either a long or short position into these names, especially around earnings reports. They tend to increase volatility and price swings are generally much larger. Fortunes can be made, but they also can be lost. Be smart, but most of all, enjoy earnings season!

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