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U.S. Earnings Analysis – Projections & Insights

By  Takao Hirose (Contextual Investments, LLC)   6 November 2018  |  News
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Take a look at these 8 companies, which are going to announce their earnings in this week.

Summary:

1.  CVS Health Corporation (NYSE: CVS) are going to release Q3 earnings before market open on November 6th, Tuesday.

2.  LGI Homes (NASDAQ: LGIH) are going to report Q3 earnings before market open on November 6th, Tuesday.

3.  Twilio (NASDAQ: TWLO) are going to release it Q3 earnings after market close on November 6th, Tuesday.

4.  Square, Inc (NYSE: SQ) are going to report Q3 earnings after market close on November 7th, Wednesday.

5.  Upwork (NASDAQ: UPWK) are going to report it first earnings after market close on November 7th, Wednesday.

6.  Dropbox, Inc. (NASDAQ: DBX) are going to release Q3 earnings after market close on November 8th, Thursday.

7.  Farfetch Ltd (NYSE: FTCH) will announce earnings after market close on November 8th, Thursday.

8.  The Walt Disney Company (NASDAQ: DIS) are going to report fiscal year 2018 earnings after market close on November 8th, Thursday.


1. CVS Health Corporation

CVS Health Corporation (NYSE: CVS), are going to release Q3 earnings before market open on November 6th, Tuesday.

Consensus EPS is $1.71, and consensus revenue is $47.23 billion.

The company announced better than expected Q2 earnings in August as below:

Actual EPS: $1.69 v.s Expected EPS: $1.61

Actual revenue: $46.71 billion v.s Expected revenue: $46.34 billion

Sales growth increased by2.2% year over year.

Same store sales increased 5.9% and pharmacy same store sales increased 8.3% than Q2.

The Company also provided guidance of EPS in a range of $1.68 to $1.73 for the third quarter of 2018 on Q2 earnings release, which was at $1.75.

(CVS Health Corporation  year to date price chart as of 5 Nov, source from yahoo finance)


2. LGI Homes

LGI Homes (NASDAQ: LGIH), is going to report Q3 earnings before market open on November 6th, Tuesday.

Consensus EPS is $1.54, and consensus revenue is $379 million.

The company released better than expected Q2 earnings in August as:

Actual EPS: $1.90 v.s Expected EPS: $1.72

Actual revenue: $420 million v.s Expected revenue: $412 million

Sales growth was +29.5% up than the same period last year.

The company raised the number of homes to be closed within this year from 6,000 to 7,000. Management forecasts the average price of selling homes will increase to $235,000 from $220,000-$230,000.

(LGI Homes year to date price chart as of 5 Nov, source from yahoo finance)


3. Twilio

Twilio (NASDAQ: TWLO) is going to release it Q3 earnings after market close on November 6th, Tuesday.

Consensus EPS is 2¢, and consensus revenue is $151million.

The company announced better than expected Q2 earnings in August as:

Actual EPS: 3¢ v.s Expected EPS: -6¢

Actual revenue: $147.8 million v.s. Expected revenue: $130 million, revenue growth was 54.1% year-over-year.

There were 57,350 active customer accounts as of June 30, 2018, compared to 43,431 active customer accounts as of June 30, 2017.

Twilio's guidance for the third quarter also beat estimates, with EPS in range of 2-3¢ compared with estimation of EPS as 0¢. Also, the company expects revenue of $150 million to $152 million, more than the expectation of $135 million.

Twilio also raised EPS guidance for fiscal year 2018 from -9¢ to 2-4¢, and the company showed new guidance of revenue in a range of $585 million to $590 million from previous estimation of $543 million.

(Twilio year to date price chart as of 5 Nov, source from yahoo finance)


4. Square, Inc

Square, Inc (NYSE: SQ) is going to report Q3 earnings after market close on November 7th, Wednesday.

Consensus EPS is 11¢, and consensus revenue is $414million.

The company announced better than expected Q2 earnings in August as:

Actual EPS: 13¢ v.s Expected EPS: 11¢

Actual revenue: $385 million v.s. Expected revenue: $368 million, revenue growth was 60.4% year-over-year.

Gross payment volume topped $21.4 billion and rose 30% more than the same period last year.

The company missed the estimated Q3 EPS with new guidance in range of 8-10¢, compared with estimation of 13¢. But Square Inc. raised Q3 revenue guidance between $407 million and $412 million from the estimated of $390 million.

Also, the company forecasted EPS for fiscal year 2018 between 42-46¢ compared with expected 46¢. The management showed new guidance of revenue between $1.52 billion to $1.54 billion, while the estimation was $1.49 billion.

(Square, Inc year to date price chart as of 5 Nov, source from yahoo finance)


5. Upwork

Upwork (NASDAQ: UPWK) is going to report its first earnings report after market close on November 7th, Wednesday.

Consensus EPS is -3¢, and consensus revenue is $62.24 million.

This will be the first time the company to release earnings after going public.

(Upwork year to date price chart as of 5 Nov, source from yahoo finance)


6. Dropbox, Inc.

Dropbox, Inc. (NASDAQ: DBX) is going to release Q3 earnings after market close on November 8th, Thursday.

Consensus EPS is 6¢, and consensus revenue is $353 million.

The company announced better than expected Q2 earnings in August as below:

Actual EPS: 11¢ v.s Expected EPS: 6¢

Actual revenue: $339 million v.s Expected revenue: $331 million

Sales growth was up 27.2% year over year.

They had 11.9 million paid subscribers in the quarter compared with 9.9 million the same period last year. The average revenue per subscriber is $116.66, up from $111.19 last year.

GAAP based gross margin was 73.6%, compared with 65.4% the same period last year.

The company announced its chief operating officer, Dennis Woodside, would step down after Sept. 4.

(Dropbox, Inc. year to date price chart as of 5 Nov, source from yahoo finance)

7. Farfetch Ltd

Farfetch Ltd (NYSE: FTCH) will announce earnings after market close on November 8th, Thursday.

Consensus EPS is -29¢, and consensus revenue is $114 million.

It is the first time the company to release earnings after going public.

(Farfetch year to date price chart as of 5 Nov, source from yahoo finance)

8. The Walt Disney Company

The Walt Disney Company (NASDAQ: DIS) is going to report fiscal year 2018 earnings after market close on November 8th, Thursday.

Consensus EPS is $1.34, and consensus revenue is $13.74 billion.

The company missed the expected earnings for Q3:

Actual EPS: $1.87 v.s Expected EPS: $1.95

Actual revenue: $15.23 billion v.s Expected revenue: $15.34 billion.

Sales growth was up 7.0% more than the same period last year.

Cable Network revenues for Q3 increased by 2% to $4.2 billion and operating income decreased 5% to $1.4 billion. Lower operating income was due to a loss at BAMTech and a decrease at Freeform. Due to affiliate revenue growth and the comparison to severance and contract termination costs incurred in the prior-year quarter, ESPN increased in Q3. But the increased ESPN was partially offset by higher programming costs and a decrease in advertising revenue. Defection of cable subscribers seems to be slowing down.

Channel ESPN performed better than expected, but the company did not disclose any data this time. The conversion rate from free trials to paying customers and subscription growth is strong.

Disney is planning to launch a streaming platform in late 2019, and this project is one of their main priorities. In addition to existing brands such as Pixar and Lucasfilm, the Disney streaming platform will house original content made directly for the service.

Broadcasting revenues for Q3 increased by 11% to $2.0 billion and operating income increased by 43% to $361 million. The increase was driven by higher program sales, affiliate revenue growth and increased network advertising revenue. However, revenue was also impacted by higher programming costs.

Parks and Resorts revenues for Q3 increased by 6% to $5.2 billion and operating income increased by 15% to $1.3 billion.

Studio Entertainment revenues for Q3 increased by 20% to $2.9 billion and operating income increased by 11% to $708 million. This was due to increases in domestic theatrical and worldwide TV/SVOD distribution results, partially offset by film cost impairments related to animated films that will not be released and lower domestic home entertainment results. Disney has announced plans to bring Dumbo, Captain Marvel, Avengers 4, Aladdin, Toy Story 4, The Lion King, Frozen 2 and Star Wars Episode 9, to the big screen in 2019. 

Consumer Products & Interactive Media revenues decreased by 8% to $1.0 billion and operating income decreased by 10% to $324 million.

(The Walt Disney Company year to date price chart as of 5 Nov, source from yahoo finance)




This report was contributed by Takao Hirose, Contextual Investments, LLC., published on 5/11/2018.


The content of this article is given for general information only. As general information, no consideration or evaluation is given to the investment objectives or financial situation of any particular person. Trading and investing involve substantial financial risk. All readers of this article should make their own evaluation of the merits and suitability of any financial products and/or advice or seek specific personal advice as to the appropriateness of engaging in any activity referred to in this article in light of their own particular financial circumstances and objectives. 


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