This week, Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Amazon.com (NASDAQ:AMZN) are all scheduled to report results for their most recently ended quarter, making this one of the most interesting weeks of this earnings season. With Apple on deck, here's why these stocks could be big movers.
Searching for growth
Scheduled to report results for its fiscal first-quarter of 2017 on Tuesday, Jan. 31, investors will likely be watching a number of key items closely. But Apple's top line for the current quarter, and the company's guidance for revenue in its second fiscal quarter of 2017, will likely be the main drivers behind any moves in the stock price after the results go live.
For its first quarter, Apple guided for revenue of $76 billion to $78 billion, up from $75.9 billion in the year-ago quarter. Investors will be looking for Apple to meet or exceed its guidance range, particularly since Apple has reported year-over-year revenue declines in the last three quarters. Revenue in this range would mark an all-time high for the company.
For Apple's second-quarter revenue guidance, the number for Apple to beat will be its fiscal second-quarter revenue in 2016 of $50.6 billion. Anything less than this figure would mean the tech giant expects to return to year-over-year decline.
Can this tech giant keep up its momentum?
For Facebook's fourth-quarter earnings release on Wednesday, Feb. 1, investors will also likely be honing in on the company's reported revenue, though expectations for Facebook's growth are far more optimistic than what investors expect from Apple these days. While it's unrealistic to expect Facebook to report the same 56% year-over-year revenue growth it reported in Q3 given the company's tough year-ago comparison of 44% year-over-year revenue growth, investors will likely look for any deceleration in revenue growth to be modest. I'll be looking for fourth-quarter revenue growth of about 45%.
Beyond Facebook's revenue growth, another area that could move the stock is the company's reported user metrics. While any surprises on user metrics are unlikely considering the company's consistent upward march in monthly active users and user engagement, a sudden pullback in user growth or engagement could spook some investors. Investors should look for the social network's monthly active users to increase about three to four percent sequentially and its user engagement, or daily active users as a percentage of monthly active users, to be 66% or better -- figures that would maintain recent user performance trends.
Can holiday sales live up to big expectations?
Going into Amazon's Feb. 2 fourth-quarter report, management didn't provide a very narrow guidance range for expected revenue growth. Amazon said it expected revenue to increase anywhere between 17% to 27% year over year. This wide range for potential net sales growth for the quarter will likely have many investors watching the important holiday quarter's revenue.
Analysts are betting Amazon's sales for the quarter will fall at the high end of management's guidance, according to analyst estimates compiled by Thomson Reuters. On average, analysts are expecting net sales of $44.7 billion, up 25% year over year.
If any of these companies under- or over-perform these expectations by a meaningful margin, these high-profile stocks could make big moves. But investors should put any moves into the context of the companies' broader, big-picture performance and their long-term potential; the market often leans toward shortsightedness and can overreact to news. Still, any significant deviation reported from these key metrics would likely require some further analysis.