Earnings season just kicked off, and it's going to be a doozy. Expectations are high with the S&P 500 now just 1% away from taking out the all-time highs it scored this summer. Every earnings announcement will matter, but there are a few reports that can shape how this season plays out.
Netflix (NFLX 0.33%), Uber (UBER -0.33%), and Disney (DIS 1.15%) are some of the names to watch this season. Let's take a closer look at the stocks that can rock the market with their upcoming financial updates.
Netflix: Oct. 16
We won't have to wait long for Netflix. The world's most popular premium digital video service reports after Wednesday's market close. Netflix stunned investors over the summer when it closed out its second quarter by adding a little more than half of the 5 million net additions in premium streaming that it was modeling for the period. It can't fall short again.
Netflix guidance back in mid-July was calling for 7 million net additions for the three months that ended in September. It's a tall hurdle for Netflix to clear at the other end of today's trading day, but it's just one of the metrics that investors will be watching. Netflix's earlier forecast calls for revenue to climb 31% to $5.25 billion with operating income soaring 73%. After-tax reported earnings are expected to grow slower, up 17%. With shareholders already concerned about the launch of two buzz-generating rival services in the next four weeks, there's a lot of pressure on Netflix to live up to its third-quarter expectations and offer up an encouraging outlook for the current quarter.
Uber: Nov. 4
Nearly half of the companies that have gone public this year are currently trading below their initial pricing, and of the 58 broken IPOs of the 2019 rookie class, no debut was larger than Uber. The world's leading ridesharing service priced 180 shares at $45 apiece, but the stock is trading 29% lower right now.
Uber has become the face of IPO debacles. Investing in IPOs isn't for the squeamish, and that has always been the case, but the returns haven't been commensurate with the risks that debutante chasers are taking on in buying new stocks. Uber is the IPO market's best chance to shift out of reverse, and it can help its case when it reports early next month.
Revenue is decelerating at Uber as its namesake personal mobility platform slows. Uber Eats is growing a lot faster than Uber itself, but the red ink is substantial as the broken IPO tries to keep drivers financially incentivized and customers close with aggressive pricing. Investors will overlook the red ink. Revenue growth and which way take rates are heading will go a long way in dictating if Uber -- and investor appetites for IPOs -- can bounce back.
Disney: Nov. 7
There will be a lot of things in play when Disney reports financial results in early November. Disney+ will launch five days later, and the entertainment giant has been pushing sweetheart deals for subscribers willing to pay two to three years in advance. Cord-cutters continue to weigh on Disney's media networks business, but a strong start for Disney+ and its other bundled streaming services could go a long way toward turning the House of Mouse from the disrupted to a disruptor.
Disney's theme parks will also be going under the microscope. Disney stunned investors in its fiscal third quarter by revealing that its year-over-year attendance levels shrunk at its domestic theme parks. Now that both Star Wars: Galaxy's Edge expansions have opened on both coasts, it can't afford another period of slow turnstiles.
Analysts have been scaling back their expectations for Disney's fiscal fourth quarter in recent weeks. The acquisition for most of Fox content assets will inflate top-line growth, but integration costs will also weigh on its bottom line. Disney has fared better than Netflix and Uber since they were all trading at 52-week highs this summer, but all three companies have a lot riding as they step up with their financial updates this season.