Earnings season isn't over yet. Indeed, a handful of major tech companies still haven't reported their results. Three large-cap tech stocks set to report earnings this week include Broadcom (NASDAQ:AVGO), HP (NYSE:HPQ), and salesforce.com (NYSE:CRM).
With all three of these stocks significantly outperforming the S&P 500 this year, rising 24% or more year to date while the latter climbed just 8%, any of these three tech companies could see their stocks make big moves this week.
In light of its 41% rise year to date, Broadcom is arguably the hottest stock of these three tech companies. And it's easy to see why investors are so optimistic about the semiconductor company. In Broadcom's most recent quarter (the second quarter of fiscal 2017), not only did revenue increase 18% year over year but the company's earnings swung from a loss per share of $3.02 in the second quarter of 2016 to earnings per share of $1.05 in the second quarter of 2017. This wild improvement in EPS was driven by a rise of 1,770 basis points in its gross profit margin, from 29.5% in the second quarter of 2016 to 47.2% in the second quarter of 2017.
For its third quarter, Broadcom management said it expected revenue of about $4.45 billion, up about 17% year over year. Furthermore, management said it expects a third-quarter gross margin of about 48%, up from its gross margin in the year-ago quarter of 47%.
HP's revenue and EPS trends aren't as optimistic as Broadcom's. In the company's most recent quarter (its second quarter of fiscal 2017), revenue and non-GAAP EPS were $12.4 billion and $0.40, respectively. This compares to revenue of $11.6 billion and non-GAAP EPS of $0.41 in the year-ago quarter.
Notably, however, the quarter was solid for HP. Both HP's second-quarter revenue and non-GAAP EPS exceeded analysts' consensus expectations. Management also called the period a "breakthrough quarter," since it was the first time since 2010 that its two main businesses -- personal systems and printing -- saw sales increase.
For the third fiscal quarter of 2017, HP guided for GAAP and non-GAAP EPS to be in the ranges of $0.36 to $0.40 and $0.40 to $0.43, respectively. This compares to GAAP and non-GAAP EPS of $0.49 and $0.48 in the third quarter of fiscal 2017.
Customer relationship management (CRM) cloud company Salesforce stood out in its most recent quarter (the first quarter of fiscal 2018) when it raised its guidance for fiscal 2018. Thanks to better-than-expected trends in revenue growth and profitability, management said it was now expecting an additional $100 million more in fiscal 2018 revenue, as well as GAAP and non-GAAP EPS in the ranges of $0.06 to $0.08 and $1.28 to $1.30, respectively. The move to raise guidance, management explained, reflected the company's excellent first quarter, as well as Salesforce's continued ability to gain market share, even though it's already the market leader in CRM.
For its second quarter of fiscal 2018, management expects revenue to be between $2.51 to $2.52 billion, up approximately 23% to 24% year over year. In addition, management said it expected second-quarter GAAP and non-GAAP EPS to be in the ranges of $0.00 to $0.01 and $0.31 to $0.31, respectively.
If any of these companies fail to deliver results in line with their guidance for the quarter, their stocks could see a pullback. On the other hand, of course, if results are better than expected, investors in these stocks may continue to be rewarded. Stay tuned to The Motley Fool for more coverage of all three of these stocks.
Of these three stocks, salesforce.com will report earnings first. The software company is set to report its quarterly results on Tuesday, Aug. 22, after market close. HP and Broadcom will report their earnings on Wednesday and Thursday, respectively, after market close.