After Big Tech reported record pandemic profits last week, corporate earnings are on track for their best performance in more than a decade, but now a new generation of tech companies with their own regulatory issues will take the stage.
Lyft and Uber’s core ride-hailing business has been rebounding from the depths caused by the COVID-19 pandemic, with Lyft recently revealing its best week for ride-hailing since March 2020. An independent analysis shows that the two have recaptured more than half their ride-hailing volume so far, so expect executives to lay out a road map to a fuller recovery while detailing their plans to respond to possible federal pressure on their business models.
The week ahead is lighter on blockbuster earnings than last week’s star-studded lineup, but another quarter of the S&P 500 will report after the results of last week gave a huge boost to overall earnings numbers. The S&P 500
With more than 60% of reports already in, FactSet’s blended projection calls for 46.0% earnings growth for the first quarter, up from a projected 33.7% as of a week earlier and an estimated 15.7% as of late December. FactSet calculates that 86% of S&P 500 components have topped earnings estimates.
Tech giants, whose earnings performance have an outsize impact on the overall index since the S&P 500 is market-cap weighted, have posted massive profit beats that dramatically exceeded expectations, helping to fuel surging earnings growth for the index. Amazon.com Inc.’s
At least 136 members of the S&P 500 are due to report, though no Dow Jones Industrial Average components are on the docket. Here is what to expect.
With more than 100 million Americans fully vaccinated against COVID-19, two of the most prominent vaccine makers will report earnings this week, as Pfizer Inc.
COVID-19 vaccines add “volatility” to pharmaceutical earnings, wrote Mizuho analyst Vamil Divan in an April 21 note to clients, but he’s upbeat about Pfizer. Divan anticipates that the vaccine will help Pfizer top expectations for the first quarter and “meaningfully increase FY21 sales guidance for the vaccine based on additional agreements they have signed over the past three months.”
A more long-term issue for Pfizer is the company’s ability to make up for the roughly $18 billion in sales that the company will lose later in the decade due to patent expirations, he said.
Both PayPal Inc.
PayPal rolled out the ability for U.S. users to buy and sell cryptocurrencies like bitcoin
“We believe updated performance metrics on recently launched financial services products are an increasingly important catalyst for the stock,” he wrote ahead of the company’s Wednesday afternoon report.
Square’s earnings come a day later and will be worth watching for signs of growing ambitions in the crypto space. Bernstein analyst Harshita Rawat expects that the company will ultimately add the option for users to purchase additional cryptocurrencies besides bitcoin, while broadening out “crypto-native services” into areas like rewards.
“While the company has not made any announcements yet, we will be surprised if they are not in the making given how profitable crypto trading could be (even acknowledging that Square has (a) lower income consumer base vs. Coinbase),” she wrote.
Don’t tread on Peloton
Peloton Interactive Inc.
The U.S. Consumer Product Safety Commission urged consumers with children living at home to stop using the Tread+, noting that “it is believed that at least one incident [of injury] occurred while a parent was running on the treadmill, suggesting that the hazard cannot be avoided simply by locking the device when not in use.”
Peloton may address the topic on its Thursday afternoon earnings call, but Stifel analyst Scott Devitt doesn’t believe that the issue will have a “lasting consequence” on Peloton’s business. The bigger question will be the progress of its U.S. manufacturing efforts, which should help the company relieve a backlog of orders that have hampered its growth.