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Previewing the Week of November 6
The week ahead will continue to be dominated by earnings, with the final rounds of earnings coming. Companies on this weeks schedule include Skyworks, Disney, Acadia Pharmaceuticals, Nvidia, Snap, and bunch of the retailers
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Skyworks will kick things off at the close of trading on Monday November 6. The Apple supplier, has seen revenue growth from such companies as Hauwei, and Samsung. Analyst are looking for the Skyworks to report that revenue grew by 17 percent versus last year in its fiscal fourth quarter to $980.24 million, while earnings are expected to have grown by 19 percent to $1.75. Given Apple’s strong results and guidance, and Broadcom’s recent revenue preannouncement, it would not be surprising to see Skyworks deliver strong results in this report. Additionally, one would also think it bodes well for the companies fiscal first-quarter results. Wall Street is calling for Skyworks to guide revenue to $1.05 billion and EPS of $1.91.
SNAP will report after the close of trading on November 7, with the street looking revenue of $236.72 million while reporting a net loss for the quarter of $0.15. For the fourth quarter analysts are calling for revenue of $305.43 million, and a net loss of $0.14. The significant number’s for SNAP will continue to be the number of active user and revenue per user.
Active user growth has slowed materially in the past number of quarters, and if Snap is unable to turn the corner regarding user growth, then it will need to drive revenue per user higher, which has been a struggle on both fronts at this point.
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On Tuesday after the close, Acadia Pharmaceuticals is expected to report that third-quarter revenue grew to $32.03 million, and have a loss of $0.63. The revenue estimates seem too low, given that the company had revenue of $30.48 million in the second quarter. Given the current growth trend of revenue of Nuplazid over the past year, the number could be closer to $50 million given using a regression analysis of the current growth trends.
Except for the first quarter Acadia, has been easily able to beat estimates in previous quarters.
Thursday morning kicks off a round of retailer reporting results, with companies like Macy’s and Kohl’s, followed by Nordstroms Thursday evening, and JC Penney on Friday morning. To say the past 52-weeks for these four have been a disaster is an understatement.
The Biggest reports of the week will Nvidia and Disney.
Nvidia is expected to report that fiscal third quarter 2018 revenue grew by about 18 percent to $2.36 billion, while earnings are expected to have increased 14 percent to $1.07. More importantly, will be the focus on fiscal fourth quarter guidance with revenue expectations calling for $2.434 billion and earnings of $1.11. The other critical pieces to watch will be datacenter growth and automotive.
Datacenter has been a critical growth driver for the business over the past few quarters, and it will be essential to see that data center continues to drive that growth going forward. Additionally, it will be crucial to know how the market will react to slowing growth rates for the company going forward.
Finally, Disney reports on Thursday as well and revenue $13.38 billion and earnings of $1.14. But all eyes will be focused on subscribers and cord cutting and ESPN, and the future of the streaming services.
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Michael Kramer and the clients of Mott Capital own shares of DIS, ACAD, and SWKS
Mott Capital Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future.