Stocks logged solid gains this week, as the Dow Jones Industrial Average (^DJI 0.39%) jumped 3.8% and the S&P 500 (^GSPC 0.88%) rose 2.5%. Investors processed a flood of earnings reports while watching for signs of progress on a new stimulus bill aimed at blunting the economic impact of the COVID-19 pandemic.
Several highly anticipated earnings reports are due over the next several trading days, including Tilray (TLRY), DraftKings (DKNG 2.39%), and Royal Caribbean (RCL 1.83%). Below, I'll take a look at the key trends that might send their stocks moving next week.
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Royal Caribbean's sinking revenue
With its entire fleet under a no-sail order from the CDC, analysts envision some brutal operating numbers from Royal Caribbean in its Monday earnings report. The second quarter spans April, May, and June. Due to the lack of sailings during that period, investors expect revenue to plunge to near zero, compared to $2.8 billion of sales a year ago. Rival Norwegian Cruise Lines last week reported that revenue dove to just $17 million in Q2, compared to $1.7 billion a year ago.
Royal Caribbean's last operating update contained a few bright spots, including the fact that bookings appeared to be going strong for 2021 sailings. It was early in the season for these purchases in mid-May, though. CEO Richard Fain and his team should have more details to share about how next year's outlook is shaping up.
Beyond that forecast, look for Royal Caribbean to discuss its plans for how to safely resume sailings once regulators clear the industry. Consumers appear eager to get back to cruise vacations, but even one more ship-based COVID-19 outbreak could easily set demand back for Royal Caribbean and its peers.
Tilray's shrinking losses
Cannabis specialist Tilray will announce its results on Monday afternoon, and expectations are low heading into this report. The Canada-based marijuana producer announced good news on the growth front in the first quarter, as sales more than doubled to $52 million. Tilray notched gains in each of its core business lines, including recreational and medical cannabis. Its hemp product sales surged, too. But investors chose to focus instead on the company's significant -- and persistent -- net losses.
CEO Brendan Kennedy and his team said in mid-May that Tilray is planning to change that trend and achieve positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2020. Progress on that score will be one of the biggest factors influencing Wall Street's reaction to Monday's report. Most analysts who follow the stock expect much slower sales growth this quarter, with revenue gains landing at 34%.
DraftKings' outlook
DraftKings shares have soared since the company went public earlier this year, and Friday's earnings report will mark a significant test of that rally. The sports betting specialist has attracted lots of investor interest thanks to encouraging growth and engagement metrics. Sales rose 30% in the first quarter, for example, even as most major sporting events were canceled towards the end of the period.
Investors are hoping that the resumption of sporting contests will lift DraftKings' user base and average spending. But it's not clear yet if major leagues like the NBA and MLB can piece together compelling competitions in the absence of live audiences and under constant threat of COVID-19 outbreaks. Friday's announcement will show how the company managed through a period of almost no sporting events in the U.S. If anything, investors are even more interested in seeing management's updated outlook for the rest of the year.
