Deep into earnings season, we’ll get several impactful first-quarter results next week, including from the biggest shopping mall operator in the U.S., a leading automaker, and the largest entertainment company in the world. Their results might help to quell volatile markets that have been see-sawing between gains and losses in recent days following a brutal selloff throughout the month of April.
- Simon Property Group (NYSE:SPG)
- Electronic Arts (NASDAQ:EA)
- Coinbase (NASDAQ:COIN)
- Roblox (NYSE:RBLX)
- Toyota (NYSE:TM)
- Walt Disney (NYSE:DIS)
- Alibaba (NYSE:BABA)
While news that the Federal Reserve raised interest rates by half a percentage point led to a big one-day rally on May 4, most of the gains were wiped out the very next day as investors retreated amid growing uncertainty concerning a potential global recession and the escalating war in Ukraine.
Volatility has been fueled, in part, by mixed first-quarter earnings. For every company that seems to knock it out of the park, such as Advanced Micro Devices (NASDAQ:AMD), there seems to be another one, such as Amazon (NASDAQ:AMZN) that strikes out.
With just over half (55%) of S&P 500 companies having reported Q1 results, 80% of them companies have announced better-than-expected earnings per share (EPS), and 72% have reported better-than-expected revenue, according to data from FactSet.
Here are seven stocks reporting earnings the week of May 9.
|SPG||Simon Property Group||$122.34|
Stocks Reporting Earnings: Simon Property (SPG)
Based in Indianapolis, Simon Property Group is the largest shopping mall operator in the U.S. A real estate investment trust (REIT), it owns 232 properties that, combined, offer nearly 250,000 square feet of shopping space. While the bulk of its shopping malls and retail outlets are located in America, the company also has operations in Asia.
Over the past six months, SPG stock has slumped along with the broader market, having fallen 28% to $122.37 per share. The decline has essentially wiped out the stock’s gains over the past year, leaving the share price up only 1% in the past 12 months. Analysts remain bullish on Simon Property stock though as they expect the return to in-person shopping to accelerate throughout this year as Covid-19 retreats.
For the first quarter, analysts expect Simon Property Group to report EPS of $1.29 on revenues of $1.19 billion.
Electronic Arts (EA)
Shares of Redwood City, California-based video game maker Electronic Arts have outperformed the market so far in 2022. Year to date, EA stock is down 10% at $120 per share. That’s less than half the 21% decline in the tech-heavy Nasdaq index. The company is behind popular game franchises such as Mass Effect, The Sims, and numerous sports titles such as Madden NFL Football and FIFA Soccer.
Currently, Electronic Arts is embroiled in negotiations to renew its licensing deal with FIFA, the non-profit governing body that organizes soccer’s World Cup every four years. Reports say FIFA wants to raise its annual licensing fee to $250 million a year from $150 million. Electronic Arts is asking to use the FIFA name and logo for new ventures such as video game tournaments and non-fungible tokens (NFTs). Talks are reportedly deadlocked.
Analysts forecast that Electronic Arts will report EPS of $1.43 and revenues of $1.77 billion for the first quarter.
Stocks Reporting Earnings: Coinbase (COIN)
Cryptocurrency exchange Coinbase has had a brutal time over the last six months. Since November 2021, COIN stock has fallen 65% to recently traded around $116.64 a share. That decline includes a 54% pullback this year. The selloff comes amid weakness in the entire cryptocurrency sector. The price of Bitcoin (BTC-USD), the largest cryptocurrency, has decreased 45% from its all-time high of $68,000 reached last November.
Statistics from Google Trends shows that, based on internet searches, interest in cryptocurrencies is waning. Internet searches for information about Bitcoin and cryptocurrencies as a whole have fallen since hitting a peak in May 2021, according to Google. Of course, Coinbase is doing what it can to try and reverse the downturn. Recently, the exchange opened a new non-fungible token (NFT) marketplace that is open and available to all users of its platform. We’ll see if that and other initiatives can reverse the fortunes of COIN stock.
For Q1, analysts are calling on Coinbase to report EPS of $0.17 on revenues of $1.48 billion.
Another, albeit smaller, video game developer reports earnings next week. Roblox, based in San Mateo, California, is out with its latest numbers on May 10. The company operates the “Roblox” online game platform and game creation system that enables users to program their own video games and play games created by other users. It’s a unique approach to video games, and one that has had mixed results.
For the first quarter, analysts expect Roblox to announce an EPS loss of -$0.22 on revenues of $640 million. Anything better than that and RBLX stock might get a lift. The stock sure could use it. Year to date, the company’s share price has fallen 70% to $30.16. The stock is now 80% below its 52-week high of $141.60.
The steep drop has been blamed on concerns about slowing user growth on the Roblox platform now that people everywhere are emerging from Covid-19 hibernation.
Stocks Reporting Earnings: Toyota (TM)
Japanese automaker Toyota is out with its first quarter results on May 11. And, as is always the case, the financials are likely to serve as a bellwether for the global automotive industry. The manufacturer behind popular vehicles such as the Tacoma pick-up truck and Sienna minivan has seen its share price hold up better than most in the current environment. This year, TM stock is down 8% at $170 a share, compared to a 13% decline in the benchmark S&P 500 index. Over the past year, the stock has gained 12%.
Like all automakers, Toyota is in the process of electrifying its vehicle fleet. And, like all car manufacturers, Toyota has been struggling with a global semiconductor shortage and supply constraints that have made it difficult for the company to meet its production targets. The Japanese company recently lowered its outlook for new vehicle sales this year to 15.5 million units from 16.5 million previously due to the global chip shortage.
Wall Street is calling on Toyota to report EPS of $2.46 and revenues of $63.7 billion for this year’s first quarter.
There’s a lot riding on Walt Disney’s upcoming earnings. The Mouse House has seen its share price get absolutely clobbered after its previous earnings showed slowing growth for the company’s Disney+ streaming service.
Adding to the misery has been a political fight in Florida that has resulted in the state moving to change Disney’s tax status and privileges. Disney has operated as a special district in Florida for 55 years. Other theme parks and resorts located in Florida do not operate under the same status as Disney, which is the largest private employer in the state.
The political bruhaha has done nothing to help DIS stock, which is down 36% in the last six months, including a 29% pullback this year, to $112.09 a share.
Analysts who cover the company are looking for Disney to report EPS of $1.07 and revenues of $18.93 billion when it releases first quarter numbers on May 11.
Stocks Reporting Earnings: Alibaba (BABA)
Last but far from least, we’ll hear from Chinese technology giant Alibaba on May 12. The e-commerce company that is often compared to rival Amazon has seen its stock badly damaged over the past year, but for different reasons than other technology names. The woes for BABA stock have been due to an ongoing crackdown on the company by authorities in China.
Record antitrust fines and threats of delisting BABA stock have shaken investor confidence. Consequently, shares of Alibaba have fallen 58% in the past year to recently trade at $95. It’s been a steep fall from grace for a stock that many analysts had singled out as best of breed among Chinese securities. However, there have been some encouraging signs in recent weeks that China’s crackdown on its tech sector might be coming to an end. Fingers crossed.
Analysts have forecast that Alibaba will report EPS of $1.12 on revenues of $30.15 billion for Q1.
Disclosure: On the date of publication, Joel Baglole held a long position in DIS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.