Earnings season is in full swing. This week, in particular, is packed with reports from high-profile companies. Three reports worth tuning into are Apple (AAPL 4.01%), Facebook (FB 1.39%), and Microsoft (MSFT 3.20%).
All three of these companies' stocks have crushed the market recently. Shares of Apple, Facebook, and Microsoft are up about 95%, 45%, and 50% over the last twelve months, respectively. This compares to the S&P 500's 22% gain over this same timeframe.
Can these three companies live up to the Street's high expectations when they report their latest quarterly results?
Tech giant Apple laid out a clear positive narrative for investors in 2019. iPhone revenue declines started to moderate in the second half of the year as services and wearables revenue continued surging higher. In 2020, investors will be looking for a continuation of these important trends.
If iPhone revenue growth declines do moderate further and if Apple is able to keep up its strong double-digit growth in wearables and services, this should show up in improved revenue and earnings-per-share growth in fiscal Q1. This is why analysts, on average, expect Apple's revenue to increase 5% year over year and earnings per share to rise 9% during the period. Both of these growth rates imply an acceleration from 2% and 4% revenue and earnings-per-share growth, respectively, in the tech company's most recently reported quarter.
The tech giant's fiscal first-quarter update, which Apple has scheduled for after market close on Tuesday, Jan. 28, is especially important since it covers a period that includes both the holidays and the launch of new iPhone models.
Social network Facebook's revenue growth held steady in recent quarters, despite management repeatedly guiding for a deceleration of the company's top-line growth rate throughout 2019. Going into Q4, management once again called for its revenue to decelerate during the period, with management guiding for the growth rate to be between about five to nine percentage points lower than the 29% revenue growth Facebook reported in Q3.
Analysts, on average, expect Facebook to grow revenue by 23.4% year over year to $20.88 billion. The consensus forecast for the social network's earnings per share is $2.52, up from $2.38 in the year-ago period.
Facebook reports fourth-quarter results after market close on Wednesday, Jan. 29.
Software company Microsoft benefited from strength in its cloud-computing business, Azure, in 2019. In the company's most recently reported quarter, for instance, Azure revenue increased an impressive 59% year over year -- or 63% in constant currency.
In Microsoft's second quarter of fiscal 2020, investors will look for Azure to remain a key catalyst for the company. But investors should expect some deceleration in the segment, in line with trends in recent quarters. Azure's 63% constant-currency growth in the first quarter of fiscal 2020 was down from 68% and 75% growth rates in the fourth and third quarters of fiscal 2019, respectively.
Microsoft also reports fiscal second-quarter results after market close on Wednesday, Jan. 29.