This week marks the pinnacle earnings season for the Standard & Poor's 500, as more than 150 companies are scheduled to report. Social networking company Facebook Inc. reports quarterly results after the closing bell Wednesday, along with e-commerce company eBay Inc., semiconductor company Qualcomm Inc. and telecommunications provider AT&T Inc.
Meanwhile, technology giant Google Inc. will post results Thursday, along with Microsoft Corporation and online retail giant Amazon.com Inc.
Analysts now forecast first-quarter earnings for S&P 500 companies will drop 4.3 percent, better than April 10 estimates for a 5.6 percent decline, data from Bloomberg show. Of those that have reported so far, 84 percent beat profit projections and 51 percent topped sales estimates.
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 would also hurt U.S. multinational corporations once they convert foreign revenue to dollars, which will slow earnings growth. Nearly 97 percent of Qualcomm Inc.'s annual revenue comes from overseas, and a stronger dollar lessens the value of that revenue.
First-quarter revenue growth from the S&P 500 information technology sector is estimated to rise 7.7 percent, while Internet software & services are forecast to climb 25 percent, research firm Estimize says.
Here’s a deeper look at the technology, telecommunications and e-commerce companies reporting this week.
Social networking giant Facebook (NASDAQ:FB) posted quarterly earnings and revenue that surpassed Wall Street expectations in the fourth quarter, driven by mobile advertising growth.
Wall Street projects Facebook to report first-quarter net income of $509.81 million, or earnings per share of 18 cents, on revenue of $3.56 billion, analysts polled by Thomson Reuters say. That compares with a profit of $642 million, or earnings per share of 25 cents, on revenue of $2.5 billion.
In the last three months, shares of Facebook have rallied 7.2 percent, and in the last 12 months shares of the company have soared more than 45 percent.
Investors will be looking for further information from eBay (NASDAQ:EBAY) about the spinoff of its payments unit PayPal after the e-commerce company unveiled plans in September to separate PayPal into an independent publicly traded company in 2015.
Wall Street expects Ebay to report first-quarter net income of $535.85, or earnings per share of 43 cents, on revenue of $4.4 billion, compared with a loss of $2.32 billion, or earnings per share loss of $1.82, on revenue of $4.26 billion. EBay reported a first-quarter loss of $2.3 billion a year earlier due to a tax charge on foreign earnings.
Shares of eBay have added just over 1 percent this year and have gained 5.8 percent in the last 12 months.
Although Qualcomm’s (NASDAQ:QCOM) earnings beat Wall Street forecasts during the fiscal first quarter, investors were left disappointed after the company cut its outlook for its semiconductor business for the second half of 2015.
Qualcomm is forecast to report fiscal second-quarter net income of $1.65 billion, or earnings per share of 98 cents, on revenue of $6.83 billion, compared with a profit of $1.96 billion, or earnings per share of $1.14, on revenue of $6.37 billion a year ago.
Shares of Qualcomm have lost 7 percent this year and have dropped more than 11 percent in the last 12 months.
Telecommunications giant AT&T (NYSE:T) saw its revenues grow by about 4 percent in the fourth quarter to $34.4 billion, and the company forecast net postpaid subscriber additions to be in the 400,000 range in the first quarter, driven by growth in tablet adds.
AT&T is expected to report first-quarter net income of $3.26 billion, or earnings per share of 63 cents, on revenue of $32.84 billion, compared with a profit of $3.65 billion, or earnings per shares of 70 cents, on sales of $32.48 billion a year earlier.
Shares of AT&T have lost 3 percent this year, and have dipped 5 percent in the last 12 months.
Google (NASDAQ:GOOGL) disappointed investors in January after the company’s fourth-quarter earnings and revenue missed expectations due to headwinds the company faces from a strong U.S. dollar. Investors will be eyeing the search giant's long-term growth prospects as its core business remains advertising.
Analysts expect Google to issue first-quarter net income of $3.66 billion, or earnings per share of $5.30, on revenue of $17.5 billion, compared with a profit of $3.45 billion, or earnings per share of $5.04, on sales of $15.42 billion a year ago.
In the last three months, Google’s (GOOGL) Class A shares have added 3.6 percent, while shares of Google have gained 4.8 percent in the last 12 months.
Microsoft (NASDAQ:MSFT) turned in a fall in quarterly profit for the October-to-December quarter as sluggish personal computer sales hurt demand for Windows software. The world's largest software company also struggled with the effects of a strong U.S. dollar.
Wall Street projects Microsoft to report fiscal third-quarter net income of $4.23 billion, or earnings per share of 51 cents, on revenue of $21.09 billion, compared with $5.66 billion, or earnings per share of 68 cents, on revenue of $20.4 billion.
In the last three months, shares of Microsoft have lost 8 percent, but shares have gained 7.7 percent in the last 12 months.
Amazon (NASDAQ:AMZN) smashed expectations in the holiday quarter after the e-commerce giant posted earnings per share of 45 cents a share, blowing past Wall Street estimates of 18 cents.
The company is expected to report a first-quarter loss of $34.53 million, or an earnings per share loss of 11 cents, on revenue of $22.4 billion, compared with a profit of $108 million, or earnings per share of 23 cents, on revenue of $19.7 billion.
Shares of Amazon have gained 26 percent in the last three months, and the stock has climbed more than 28 percent in the last 12 months.