U.S. markets open in 3 hours 15 minutes
  • S&P Futures

    3,847.50
    +13.25 (+0.35%)
     
  • Dow Futures

    30,927.00
    +18.00 (+0.06%)
     
  • Nasdaq Futures

    13,489.00
    +127.50 (+0.95%)
     
  • Russell 2000 Futures

    2,161.70
    -2.30 (-0.11%)
     
  • Crude Oil

    52.81
    +0.54 (+1.03%)
     
  • Gold

    1,863.70
    +7.50 (+0.40%)
     
  • Silver

    25.79
    +0.23 (+0.92%)
     
  • EUR/USD

    1.2161
    -0.0013 (-0.11%)
     
  • 10-Yr Bond

    1.0910
    0.0000 (0.00%)
     
  • Vix

    22.38
    +1.06 (+4.97%)
     
  • GBP/USD

    1.3695
    +0.0011 (+0.08%)
     
  • USD/JPY

    103.8200
    +0.0590 (+0.06%)
     
  • BTC-USD

    33,133.28
    -313.97 (-0.94%)
     
  • CMC Crypto 200

    671.68
    -5.21 (-0.77%)
     
  • FTSE 100

    6,672.31
    -22.76 (-0.34%)
     
  • Nikkei 225

    28,822.29
    +190.84 (+0.67%)
     

Earnings to Watch in Holiday-Shortened Week: Heico, Carnival, CarMax, Cintas and Weibo in Focus

Vivek Kumar
·5 min read

Monday (December 21)

IN THE SPOTLIGHT: HEICO, CARNIVAL

HEICOHeico, an aerospace and electronics company, is expected to report a profit of $0.42 in the fourth quarter, down from $0.62 per share seen in the same quarter a year ago. The Hollywood, Florida-based company will post a more than 20% decline in revenue to $414.782 million from $ 541.53 million a year ago.

CARNIVALCarnival, the world’s largest cruise ship operator, is expected to report a loss for the third consecutive time in the fourth quarter. The Miami, Florida-based company’s revenue will plunge ​nearly 100% to $142.09 million from $4.78 billion posted in the same period a year ago. Carnival is expected to report a loss of $1.86 per share, worse compared to a profit of 62 cents per share registered in the same quarter last year.

“We think the cruise industry will be one of the slowest sub-sectors to recover from the COVID-19. Cruising needs just not international travel to return, but ports to reopen, authorities to permit cruising, and the return of customer confidence,” said Jamie Rollo, equity analyst at Morgan Stanley.

“We expect cruising to resume in January 2021, and only expect FY19 EBITDA to return in FY24 given historically CCL has lacked pricing power, and EPS to take even longer given dilution of share issues and higher interest expense. We see debt doubling in FY21 vs FY19 due to operating losses and high capex commitments, and leverage looks high at 4-5x even in FY23-24e, so we see a risk more equity might need to be raised,” Rollo added.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 21

Ticker

Company

EPS Forecast

HEI

Heico

$0.42

CUK

Carnival

-$1.84

CCL

Carnival

-$1.84

GCTAY

Siemens Gamesa ADR

$0.01

CCL

Carnival

-£1.39

Tuesday (December 22)

IN THE SPOTLIGHT: CARMAX, CINTAS

CARMAX: CarMax, America’s largest used-car retailer and a Fortune 500 company, is expected to report a profit of $1.14 per share in the fourth quarter, up from $1.04 per share reported in the same quarter a year ago. Revenues are expected to be $5 billion, rising more than 4% from the year-ago quarter.

William Blair upgraded their earnings per share forecasts to $1.29 for Q4 2021, up from the previous $1.26. The Chicago-based investment bank also forecasts FY2023 earnings at $6.15 EPS.

“Based on historical & current data, we expect to see strength in used car sales as we move forward, particularly given the shortage of new car inventory, manufacturers pulling back on incentives, and potential tailwinds from de-urbanization, mass transit, ride-sharing, and travel. We expect Carmax to successfully execute their Omnichannel strategy, providing both online and physical dealer options to the consumer,” said Adam Jonas, equity analyst at Morgan Stanley.

“Carmax has consistently generated profitability and has one of the strong balance sheets amongst the dealers. Long term, we estimate strong growth in same-store sales along new store openings, allowing Carmax to achieve operating leverage, with upside from the omnichannel rollout,” Jonas added.

CINTAS: Mason-based corporate uniform maker Cintas is expected to report a profit of $2.17 per share in the second quarter fiscal 2021, lower than $2.27 per share reported in the same quarter a year ago. Revenue is forecast to decline to $1.75 billion from $1.84 billion.

“We expect COVID-19 to have an impact on CTAS, with the duration and lasting economic impact a key driver of the stock. Despite excellent execution and a strong track record of revenue growth and capital allocation, Cintas remains a cyclical company; we think risk-reward skews to the downside given the stock’s elevated multiple and the potential for uniform employment to remain muted especially if small businesses close,” said Toni Kaplan, equity analyst at Morgan Stanley.

“MS economists are forecasting an extended period of lower employment and CTAS’ top-line growth could become challenged if labour growth stays under pressure,” Kaplan added.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE DECEMBER 22

Ticker

Company

EPS Forecast

KMX

CarMax

$1.14

NEOG

Neogen

$0.31

CTAS

Cintas

$2.17

ACI

AltaGas Canada

$0.41

HOCPY

Hoya Corp

$0.74

Wednesday (December 23)

Ticker

Company

EPS Forecast

PAYX

Paychex

$0.66

AUOTY

AU Optronics

$0.09

Thursday (December 24)

Ticker

Company

EPS Forecast

ASEKY

Aisin Seiki Co

$0.42

RLAY

Relay Therapeutics Inc.

-$0.32

December 25-January 1

IN THE SPOTLIGHT: WEIBO

No major earnings scheduled for release during this period. However, Chinese microblogging website Weibo Corporation will announce its unaudited financial results for the third quarter of 2020 before the market opens on Monday, December 28, 2020.

China’s biggest social media platforms Weibo is expected to report a profit of 61 cents​ per share according to the mean Refinitiv estimate from twelve analysts. Wall Street expects results to range from 57 cents to ​65 cents per share, Reuters reported.

“Weibo is affected by macro and competitive headwinds that have been pressuring other online ad platforms, including Baidu, iQIYI and Sohu, which could linger – it may take time to recover. We think the structural challenge from ad inventory increase across the industry will be hard to mitigate in the near term,” said Alex Ko, equity analyst at Morgan Stanley.

“We await more visibility on ad demand recovery and Weibo’s monetization progress amid healthy user momentum. Our price target implies 15x P/E on our 2021 non-GAAP EPS forecast vs. the historical trough of 12x, given earnings growth trajectory,” Ko added.

This article was originally posted on FX Empire

More From FXEMPIRE: