As Apple Inc. releases quarterly results after the closing bell on Monday, the earnings season gets into full swing this week. Social media company Twitter Inc. and drugmaker Pfizer Inc. report results Tuesday, followed by professional networking site LinkedIn Corp. and oil and gas giant Exxon Mobil Corporation on Thursday.
The stronger U.S. dollar will have the largest negative effect on corporate earnings this season, as the S&P 500 derives more than 40 percent of sales from overseas. A prolonged period of dollar strengthening is hurting U.S. multinational corporations as they convert foreign revenue to dollars, which is slowing earnings growth.
Strength overseas has been a big part of Apple's success as international sales accounted for 64 percent of the iPhone maker's revenue during the final quarter of 2014, led by growth in China and Japan. Analysts will keep a close eye on how the U.S. dollar affected the tech giant’s revenue in the January-March quarter, and overall guidance for the current quarter.
Analysts forecast first-quarter earnings for S&P 500 companies will drop 2.9 percent from a year ago, which is better than April 10 estimates for a 5.6 percent decline, according to Bloomberg data. Of the S&P 500 companies that have already reported first-quarter results, 77 percent have beat profit forecasts and 50 percent topped sales estimates.
Here’s a deeper look at companies reporting this week.
Just days after making its highly anticipated Apple Watch available, Apple Inc. (NASDAQ:AAPL) will release its latest quarterly results after the closing bell Monday. Sales of the new wearable device will not be included in the company's revenue for this report since pre-orders for the Apple Watch began on April 10, after the end of the first quarter.
The tech giant posted quarterly earnings in January that smashed Wall Street expectations, with a record 74.5 million iPhones sold during the 2014 holiday quarter, along with a record-breaking profit of $18 billion.
Wall Street expects Apple to turn in fiscal second-quarter net income of $12.5 billion, or earnings per share of $2.15, on revenue of $56.06 billion, according to analysts polled by Thomson Reuters. That compares with a profit of $10.2 billion, or earnings per share of $1.66, on sales of $45.6 billion a year ago.
Shares of Apple have skyrocketed 57 percent in the last 12 months.
After the closing bell Tuesday, analysts will be eyeing Twitter Inc.'s (NYSE:TWTR) overall user growth and mobile advertising growth, which accounted for more than 80 percent of the company’s total advertising revenue at the end of 2014. The company topped Wall Street estimates in January after the social networking giant posted a 97 percent jump in quarterly revenue from a year earlier, while mobile advertising revenue was nearly 88 percent of total ad revenue.
Analysts forecast Twitter to post a first-quarter loss of $155.8 million, or an earnings per share loss of 24 cents, on revenue of $456.5 million, compared with a loss of $132.4 million, or an earnings per share loss of 23 cents, on sales of $250.5 million a year ago.
Shares of Twitter have soared just over 34 percent in the last 12 months.
Pfizer Inc. (NYSE:PFE) announced in February it will buy injectable drug provider Hospira Inc. for more than $15 billion to expand its portfolio of sterile injectable pharmaceuticals. The deal is the largest for Pfizer after an unsuccessful attempt to take over British multinational pharmaceutical and biologics company AstraZeneca Plc for $118 billion last year.
The drug maker is estimated to report first-quarter net income of $2.32 billion, or earnings per share of 46 cents, on revenue of $10.7 billion, compared with a profit of $2.33 billion, or earnings per share of 36 cents, on sales of $11.3 billion a year ago.
Shares of Pfizer have gained more than 14 percent in the last 12 months.
Ford Motor Company (NYSE:F) quarterly profit is expected to be flat last quarter after the No. 2 U.S. automaker beat profit estimates in the fourth quarter and maintained its 2015 profit forecast. However, the company warned in January that its losses in Europe would be more than previously forecast, signalling Ford will continue to rely on North America for its profit this year.
The automaker is expected to post first-quarter net income of $1.14 billion, or earnings per share of 27 cents, on revenue of $33.92 billion, compared with a profit of $989 million, or earnings per share of 24 cents, on sales of $33.9 billion a year ago.
Shares of Ford have edged up 0.06 percent in the last 12 months.
H.J. Heinz Company announced in March it will buy Kraft Foods Group Inc. (NASDAQ:KRFT) for $46 billion, creating the world’s fifth-largest food and beverage company with annual revenue of $28 billion. Kraft Foods owns brands such as Capri Sun, Jell-O, A.1., Planters and Velveeta. With the deal expected to close in the second half of 2015, investors will be listening in on how Kraft’s brands will gain a strong foothold in international markets.
Wall Street anticipates Kraft Foods will post first-quarter net income of $479.32, or earnings per share of 81 cents, on revenue of $4.43 billion, compared with a profit of $511 million, or earnings per share of 85 cents, on sales of $4.36 billion a year ago.
Shares of Kraft have surged nearly 54 percent in the last 12 months.
Exxon Mobil Corporation (NYSE:XOM), the world's largest publicly traded oil and gas company, topped Wall Street’s earnings estimates in the fourth quarter. However, the company’s quarterly profit tumbled 21 percent due to the roughly 50 percent drop in global oil prices during June to January, signaling the impact the oil giant is facing from lower crude prices.
Analysts expect Exxon Mobil to turn in first-quarter net income of $3.5 billion, or earnings per share of 76 cents, on revenue of $51.2 billion, compared with a profit of $9.1 billion, or earnings per share of $2.10, on sales of $106.8 billion a year ago.
Shares of Exxon Mobil have lost 15 percent in the last 12 months.
After the closing bell Thursday, analysts will focus on LinkedIn Corp.’s (NYSE:LNKD) mobile user growth, as well as the company’s multi-app portfolio strategy as mobile now accounts for more than 40 percent of total traffic to LinkedIn. The professional networking site surged to an all-time high in January after the company’s profit and sales topped analysts’ estimates for the 15th consecutive quarter.
LinkedIn is forecast to report a first-quarter loss of $26.14 million, or an earnings per share loss 20 cents, on revenue of $636.04 million, compared with a loss of $13.45 million, or an earnings per share loss of 11 cents, on sales of $473.19 million a year ago.
Shares of LinkedIn have soared more than 78 percent in the last 12 months.