Previewing Earnings for Qualcomm, Google, Chipotle, Microsoft & More

Indie Research

Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks still set to report earnings, including Qualcomm (QCOM), Kinder Morgan (KMP), F5 Networks (FFIV), eBay (EBAY), Microsoft (MSFT), Inuitive Surgical (ISRG), Chipotle Mexican Grill (CMG) and Google (GOOG).

Here is just a tiny sample of what BullMarket.com wrote about Microsoft:

Microsoft is engaged in developing, manufacturing, licensing, and supporting a range of software products and services for different types of computing devices. It has five business segments: Client, Server and Tools, Online Services Business, Microsoft Business, and Entertainment and Devices.

Last quarter, Microsoft earned net income of $5.1 billion, or 60 cents per share. That was down from $5.2 billion, or 61 cents per share, in the year-ago quarter, but that quarter included

$461 million in one-time gains.

Sales increased by 6% to $17.4 billion.

Wall Street analysts were looking for EPS of 58 cents on $17.2 billion in revenue.

The Servers & Tools business was its strongest division growing revenue by 14% to $4.57 billion, driven by double-digit sales growth from SQL Server and strong growth in System Center revenue. Transactional revenue grew low single-digits, roughly in line with the underlying server hardware market growth. Multiyear licensing revenue was up high teens and enterprise services grew more than 20%. ...

Microsoft has topped the analyst EPS consensus six of the past eight quarters, meeting the consensus the other two times. During that period, the stock has risen five of eight quarters. Seasonally, the stock has risen once in the last four years. ...

Outside of earnings, we've long said the company doesn't get the credit it deserves in certain areas, including cloud computing with Azure, which is doing very well. Its Server & Tools division has been posting solid results, while Xbox and Kinect have also been winners, though Xbox is getting long-of-tooth and probably needs a refresh to re-energize sales.

Windows 8 could also be a big winner, though whether it will help Microsoft make inroads in the mobile phone and tablet space given its late start is an open question. The Surface tablet looks interesting, but Microsoft doesn't have a very good track record on the hardware side of the business, and the Zune immediately comes to mind as an epic failure. However, we do think the keyboard and ability to run Office differentiates the device, and corporate users could want it. ...

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the recent correct calls BullMarket.com made for Q4 were:

  • to be bearish on Deckers (DECK) ahead of earnings.
  • to be bullish on Salesforce.com (CRM) ahead of earnings.
  • to be bullish on Monster Beverage (MNST) ahead of earnings.
  • A daily investment service that is committed to creating long-term wealth for its members, BullMarket.com's Recommended List of stocks is up 33.3% from 2008-2011 versus a -14.4% return for the S&P, a 47.7% outperformance, topping the benchmark each year since the start of the Great Recession. Subscribers receive actionable market commentary, access to 40+ stock ideas on the Recommended List, and real-time trade alerts. Plus, sign up for a free trial today to view Bull Market's in-depth Special Reports - including its annual High Yield and MLP reports - and its timely Earnings Previews, which are published every Friday during the heart of earnings season. Get a Risk-Free Trial to Bull Market Today! (Please note returns are unaudited.)

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