The stock market has stayed fairly strong in 2023 as it attempts to bounce back from its struggles in 2022. Even as bank earnings reports weighed heavily on the Dow Jones Industrial Average (^DJI +0.53%), the Nasdaq Composite (^IXIC +1.00%) managed to post another modest gain, and losses for the S&P 500 (^GSPC +0.70%) were relatively small.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
(1.14%) |
(392) |
|
S&P 500 |
(0.20%) |
(8) |
|
Nasdaq |
0.14% |
16 |
Data source: Yahoo! Finance.
With stock markets being mixed on Tuesday, many investors are looking forward to quarterly financial reports from some key players in various industries. Among this week's most prominent reports are those of video streaming giant Netflix (NFLX -2.00%) and consumer products specialist Procter & Gamble (PG +0.37%).
Below, you'll get a better sense of why investors are watching these two companies closely and what you should expect from their respective reports.
Time to watch the show
Netflix is set to release its fourth-quarter financial results after the closing bell on Thursday. Even though the stock took a big tumble in the first half of 2022, it spent most of the rest of the year clawing back much of its lost ground, and investors are hopeful that what Netflix says about the just-ended quarter will keep its positive momentum going.
Netflix impressed shareholders with its third-quarter report three months ago. Even though revenue growth continued to slow year over year and was actually down slightly from the second quarter, Netflix returned to net subscription growth after a couple of periods of declining memberships.
Earnings fell slightly, but they came in better than most had expected. Moreover, free cash flow also perked back up, and Netflix projected that it would bring in about 4.5 million new paid memberships in the fourth quarter.
NASDAQ: NFLX
Key Data Points
More important than Netflix's short-term numbers, though, are the trends that the company is seeing in the streaming video business generally. Perhaps the most important long-term impact could come from Netflix's decision to offer an ad-supported tier, which will allow it to keep monthly costs lower for price-sensitive subscribers. Even though the current ad environment is susceptible to macroeconomic disruptions, the long-run potential of streaming ads could be huge for Netflix.
Investors can expect a taste of what ads brought to the table in this quarter's report, but the full impact probably won't come for another few months. Nevertheless, you can expect a lot of attention directed at Netflix's report Thursday evening.
P&G looks to keep holding up
Consumer staples stocks have done a great job of defending against bear market declines, and Procter & Gamble is down only slightly from its highs. Nevertheless, investors are prepared to see at least some pressure on the company behind key brands like Tide and Pampers when it reports its fiscal second-quarter financial results before the opening bell on Thursday morning.
Most investors expect P&G's quarterly numbers to be down slightly from year-ago numbers. Sales are likely to fall about 1%, with earnings projected to take a slightly larger percentage dip to $1.59 per share.
NYSE: PG
Key Data Points
Cost increases have put pressure on Procter & Gamble's margins, but arguably not to as great an extent as some other companies. P&G's brand strength gives it pricing power to pass through some of its higher costs to consumers, and the business has been a cash cow over the long run as well.
Overall, investors will benefit from getting reports from companies in two different but important industries. With a more complete look at the health of the consumer both in the U.S. and abroad, it'll be easier to get a sense of how the rest of earnings season might go.
