Led by the world’s most profitable hardware maker, a slew of the most well-known names in tech will open their books this week.
Five of the world’s biggest technology companies report earnings over the next four days, setting the stage for a sweeping look at the fortunes of the industry as seen through its most profitable players.
Apple Inc. kicks off a busy earnings week when it reports fiscal first-quarter results on Monday. Yahoo Inc. follows on Tuesday with fiscal fourth-quarter numbers. On Wednesday, Facebook Inc. reports fiscal fourth-quarter results and, on Thursday, Google Inc. and Amazon.com Inc. report fiscal fourth-quarter earnings.
Several concerns hover over all five companies, illustrative of industry-wide worries. All the companies are likely to face questions about privacy and the security of customer data, in large part as a result of a cascade of revelations from Edward Snowden about the extent of U.S. government infiltration of major tech companies’ networks.
Over the past six months, these concerns have morphed from a minor public-relations annoyance to a business issue for almost all the tech world’s biggest companies. Indeed, four of the five companies reporting earnings this week – all but Amazon – have partnered in an effort for “Global Government Surveillance Reform,” lobbying Washington and other governments to become more transparent on digital spying issues.
But each company is also likely to face specific investor concerns. Yahoo, for example, will be under pressure to expand on CEO Marissa Mayer’s ongoing effort to find an identity and strategy for the struggling web company, especially given the recent firing of chief operating officer Henrique de Castro, one of the first major hires during Ms. Mayer’s tenure.
Facebook, whose shares have been on a tear since the summer of 2013, will be watched closely by investors to see if it can continue capitalizing on the mobile revolution and whether its social network’s advertising potential – perhaps the most hyped in the industry – continues to pay off. Google is also likely to be scrutinized on its performance in the mobile market, whereas Apple, which has generated more profit from mobile devices than any other company, will be expected to provide more clarity on its worldwide expansion.
Apple’s earnings are perhaps the most highly anticipated. The company’s stock price rose throughout the second half of 2013, largely on the success of several new iPhone and iPad models, but it has seen little change in January. Analysts and investors will watch closely for any indication that Apple has managed to capitalize on its most potentially lucrative remaining market – China. Much of the stock price surge in the second half of 2013 came as a result of lofty expectations for Apple’s deal with telecom giant China Mobile. Now, with a quarter of new iPhone sales in the books, investors are looking for the payoff from that deal.
On average, analysts expect Apple to post earnings of between $14.05 (U.S.) and $14.09 a share on revenue of $57-billion to $58-billion. That compares with EPS of $13.81 and revenue of $54.51-billion in the same quarter last year.