As Nasdaq 100 Faces Reality Check, IBM, Netflix, and Twitter Earnings are Eyed

A slew positive bank results launched a strong Q2 earnings season. This sent the Dow Jones, S&P 500, and Nasdaq 100 indices up to new records. So far, 22 S&P 500 companies reported their results. 21 of them have exceeded Street forecasts, with an average earnings surprise +19%.

As Nasdaq 100 Faces Reality Check, IBM, Netflix, and Twitter Earnings are Eyed

Factset predicts that the S&P 500 will record an earnings growth rate 64% YoY in the second quarter. This is the highest season in more than a decade. As corporate America tends not to provide accurate EPS forecasts, the actual growth rate may be higher. This could allow for the S&P 500 to deliver an earnings growth rate of 64% YoY for the second quarter.

This week will see big tech companies like IBM, Netflix and Intel start to release results. Here's a quick preview.

Source: Bloomberg, DailyFX

IBM:

  • Expected Q2 EPS of 2.275 and $18.26 Billion in revenue
  • Cloud and Cognitive Software will be driven by the global trend towards digitalization, which already grew 4% in its first quarter.
  • Red Hat's acquisition is expected to increase cloud revenues.
  • The Global Business Services segment could benefit from increased client investment in digital technology
  • IBM's former president Jim Whitehurst may be the focal point of the earnings call.

NETFLIX

  • For Q2, expect EPS to be $2.248 and revenue to reach $7.323 billion
  • Netflix could see some moderation after a year of explosive subscriber growth. This is due to the high watermark that was set during the pandemic.
  • Analysts expect less than 2,000,000 new users to be added in the fourth quarter.
  • In Q3 guidance, uncertainties could be caused by recent price increases and pent-up outdoor entertainment demand
  • Netflix is moving away from a subscription-oriented narrative to a more stable average revenue per customer (ARPU) metrics.

INTEL

  • Expected Q2 EPS of $1.065, and $17.84 Billion in revenue
  • Intel expects to see YoY lower EPS and revenue
  • Although PC and server shipments are a bright spot in the overall picture, its semiconductor segment continues to lag behind Nvidia or AMD.

TWITTER

  • For Q2, expect EPS to be $0.064 and revenue to reach $1.058 billion
  • Live events and sports can be resumed to drive engagement and increase daily active users. Advertisers may also increase spending as a result of the Covid lockdown being lifted.

Keep checking DailyFX for additional earnings updates. To download quarterly equity forecasts, click HERE.

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