Earnings season kicks into high gear Tuesday. A slew of big names will deliver quarterly results, but the spotlight will be on Alphabet (GOOGL), Starbucks (SBUX) and Advanced Micro Devices (AMD) after the closing bell.
Alphabet is expected to report adjusted earnings of $13.97 per share on $32.56 billion in revenue during its first quarter. The tech giant’s results could be negatively impacted by its exposure to the travel industry, which accounts for approximately 11% of search and revenue. Ad revenue will have likely taken a hit amid COVID-19, but Alphabet’s cloud business could remain a bright spot, according to analysts.
“We believe Street estimates for Q1 are likely optimistic, given the material pullback in ad spend due to COVID-19. Management commentary on near-term Ad Revenue outlook will be key,” RBC analyst Mark Mahaney wrote in a note April 24.
So far this year, Alphabet shares are down 4%, while the broader market declined 10%. In the same period, Facebook (FB) sank 6%, Netflix (NFLX) soared 31%, Amazon (AMZN) jumped 30% and Apple (AAPL) fell 3%.
Coffee giant Starbucks is estimated to report adjusted earnings of 34 cents per share on $5.90 billion in revenue during its fiscal second quarter.
Starbucks provided a business update on April 8 and outlined the impact that it had seen as a result of COVID-19. At the time, the company said that same-store sales in the U.S. during the quarter fell 3% and same-store sales in the last week of March declined 60% to 70%. Meanwhile, sales tanked 50% in China during the quarter, according to the company.
Last week, Starbucks announce that it would be offering Beyond Meat (BYND) products in China. Shares of the coffee chain are down 11% this year.
Finally, chipmaker AMD is expected to report adjusted earnings of 18 cents per share on $1.79 billion in revenue during its first quarter. While COVID-19 likely hit AMD’s PC and gaming chip businesses, data center CPU & GPU sales to cloud customers probably benefited this year.
“Tailwinds [for AMD] include strong cloud demand, low exposure to enterprise, and resurgent gaming,” Bank of America analyst Vivek Arya wrote in a note April 27. “Risks include 2H PC/console pull-ins/delays. However, AMD's smaller footprint in PC's (15% share) and competitive new products mitigates PC risk, in our view. On consoles, while a delayed launch is possible, demand should be fine, given major spec upgrades, and a re-invigorated/re-engaged gaming demographic.”
Other major earnings reports scheduled for Tuesday include PepsiCo (PEP), Caterpillar (CAT), 3M (MMM), Pfizer (PFE), DR Horton (DHI), Harley-Davidson (HOG), UPS (UPS), Southwest Airlines (LUV) before market open; Mondelez (MDLZ), Ford (F) after market close.
Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.
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