All of July’s earnings reports will be closely watched by investors eager to understand how companies plan to move forward in a challenging economic environment. However, the most anticipated results will come from Apple Inc. (NASDAQ:AAPL), Bank of America Corp (NYSE:BAC) and Walgreens Boots Alliance Inc (NASDAQ:WBA).
The U.S. stock market is still reeling from the effects of the U.K.’s decision to leave the EU, but with earnings season fast approaching, investors are likely to turn their attention to the thousands quarterly reports due out in the coming months.
Several big-name firms are due to release their earnings in July, but these three earnings reports in particular have market-moving potential.
Earnings Reports to Watch: Apple Inc. (AAPL)
As per usual, Apple will be one of the most closely watched companies this earnings season as the firm continues to deal with worries about declining iPhone sales and stagnating growth in China.
AAPL has enjoyed years of record-breaking revenue announcements, but its July 26 earnings call isn’t expected to deliver very impressive results. The firm is expected to report earnings-per-share of $1.39 on revenue of $42 billion.
Since the iPhone makes up 65% of the company’s sales figures, the number of units sold will be of the utmost importance to investors. Most are expecting the company to report a year-over-year decline in iPhone sales for the second quarter in a row, which is something that some say proves Apple is a business in decline.
Many worry that AAPL is unable to deliver the innovation that Wall Street has come to expect from the tech firm under the leadership of Tim Cook. This month’s earnings call will give the company a chance to explain its plans and defend its title as one of the most successful companies in the U.S.
Earnings Reports to Watch: Bank of America Corp (BAC)
On July 18, Bank of America is expected to report EPS of $0.37 on revenue of $20.91 billion. The bank has seen its fair share of ups and downs over the last few months, as it fell in and out of favor with investors due to changing macroeconomic conditions.
The most recent blow to BAC shares is the U.K.’s decision to leave the EU, which has shaved about 7% off the company’s share price. July’s earnings announcement will be the bank’s chance to explain how it plans to ride out this uncertainty.
While European banks will feel the largest effects of the Brexit, American financial firms will also suffer and BAC is likely to be one of the hardest hit.
Bank of America is heavily dependent on U.S. interest rates, something that was considered a positive just six months ago when analysts were expecting the Federal Reserve to raise rates. However, the Brexit has caused many to reverse their predictions and most believe the central bank will either keep rates steady or lower them at its July meeting.
This month, the firm is expected to explain how it plans to wade through the Brexit turmoil and what kind of impact it will have on its bottom line.
Earnings Reports to Watch: Walgreens Boots Alliance Inc (WBA)
Walgreens is due to report its third-quarter earnings on July 6. Analysts are expecting the firm to announce EPS of $1.14 on revenue of $29.71 billion, but it will be the firm’s forward guidance that investors are most interested in.
The chain recently parted ways with startup Theranos after an investigation into the testing firm’s facilities uncovered deficiencies that ended with Theranos voiding thousands of its blood test results.
Now, investors will want to know how Walgreens plans to continue expanding its in-store health clinics, a fast growing segment of the pharmacy market. The health clinics offer everything from vaccinations to blood tests, and WBA has been a leader in that market so far.
However, perhaps the most hotly anticipated aspect of WBA’s earnings report is the company’s proposed merger with Rite Aid Corporation (NYSE:RAD). At the moment, WBA is the largest retail drug store in the U.S. and if its $17.2 billion Rite Aid takeover is successful, the company will have an even larger U.S. presence.
Regulatory questions have slowed the process, and investors will be looking for some insight as to when the deal is expected to close and what regulators are demanding in order to let the acquisition go through.
As of this writing, Laura Hoy was long AAPL.