Earnings

Q3 company earnings preview: How will Disney, Nio and Sainsbury’s share prices fare?

We’re now in the home stretch of a company earnings season that has thrown up plenty of surprises: Amazon’s [AMZN] unexpected drop in earnings, Lloyds [LLOY] results showing profits wiped out by PPI costs, and the S&P 500 showing an accumulative climb in share prices hitting records highs.

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This week sees quarterly company earnings numbers from two US entertainment giants. Disney’s [DIS] share price could drop if the costs of its new streaming service weigh on revenues. While Activision’s [ATVI] share price - which has been on the ascendance after strong sales for the latest installment in the Call of Duty franchise - could continue to gain in the run-up to the lucrative festive season.

Closer to home, Sainsbury’s [SBRY] company earnings will reveal how it is coping among increased competition from discounters, Aldi and Lidl. And over in China, electric car maker Nio [NIO] will be hoping its Q3 earnings results are better than last quarter’s shocking numbers.

 

Disney 

When are they reporting results?

7 November

Why investors should care?

Disney's [DIS] share price is up over 19%, however, the stock has dropped 9% in the past 3 months as investors grow concerned about growing costs. Upcoming streaming service Disney+ and the $71.3 billion takeover of 20th Century Fox hasn't come cheap. All eyes will now be on the magic kingdom’s bottom line.

Key metric

Earnings per share

Analyst expectations/outlook

Expectations are for Disney's earnings per share to drop in Q4, coming in at $0.95, compared to $1.48 seen last year. Revenue is forecast to come in at 19.19 billion, a 34.1% jump from last year. Investors should also stay tuned for reaction to Disney+ when it launches on 12 November.

 

 

Sainsbury’s

When are they reporting results?

7 November

Why investors should care?

Sainsbury's [SBRY] share price has experienced a sharp 21% fall this year it struggles to differentiate itself in a crowded market. Discounters Aldi and Lidle continue to eat into market share, while Sainsbury's doesn't have the heft of Tesco or prestige of Waitrose. Throw in the debacle over the Asda merger and it has been a tough year for the supermarket.

Key metric

Revenue

Analyst expectation/outlook

Sainsbury's expects pre-tax profit to come in at £262 million, with earnings per share of 9p, down over 12%. The share price tends to move over 5% on earnings day, so there could be some short-term opportunity for investors

 

 

Nio

When are they reporting results?

5 November

Why investors should care?

Nio's [NIO] share price tanked over 51% at the end of September following disappointing sales. Since then Nio the stock has failed to recover, and is currently down over 76% this year. Other problems for Nio include the US-China trade war and Tesla opening a giga-factory on its home turf in Shanghai. 

Key metric

Earnings per share

Analyst expectation/outlook

In Q2, Nio recorded a $478.6 million loss, 25.2% more than the previous quarter's loss. This quarter, expectations are for earnings per share to come in at -$0.34 - a marked improvement from the -$0.45 seen last quarter. A miss will see Nio’s share price continue to crash.

 

 

 

Roku 

When are they reporting results?

6 November

Why investors should care?

US streaming service Roku's [ROKU] share price is up a staggering 352% since the start of the year. Yet, since hitting a high of $170.97 in September, Roku's stock has dropped over 8% as competition fears eat at investor confidence. However, some of these fears will have eased on news that Apple TV is now available on Roku. Question is, will this be enough for the stock to rally back to its 52-week high?  

Key metric

Subscriber numbers

Analyst expectations/outlook

Wall Street expects earnings per share of $-0.28, a steep fall from last year's $0.09. But what happens with Roku’s share price might all come down to subscriber numbers, These expanded from 27 million in December 2018 to 30.5 million in June 2019. For the full year they are projected to grow to 35 million. But with Amazon FireTV’s active subscriber base growing at a faster rate and Disney+ launching on November 12, any inkling that Roku won’t hit its full-year target will weigh on the stock. 

 

 

 

Qualcomm

When are they reporting results?

6 November

Why investors should care?

Qualcomm's [QCOM] share price is up 40% this year, but has been range bound between $66 and $83 since early June. Shareholders will now be hoping that Qualcomm's Q4 earnings results will help the stock break out of this range. 
Key metric

Chipset revenue

Analyst expectations/outlook

Expectations are for earnings per share of $0.7, down from the $0.9 seen this time last year. Analysts expect revenue to come in at $4.7 billion, down from $5.83 billion. The loss of Huawei business will be a factor here, but Qualcomm’s share price could gain on any positive news surrounding its investment in 5G technology.

 

 

 

Activision Blizzard

When are they reporting results?

7 November

Why investors should care?

Activision Blizzard's [ATVI] share price jumped last week as the latest instalment in the Call of Duty franchise, Call of Duty: Modern Warfare,  made over $600 million in its first three days of release. While these numbers won't be in the Q3 numbers, any update on Activision's Christmas pipeline and how it is faring against free-to-play phenomena Fortnite could help maintain the current rally.

Key metric

Monthly active users

Analyst expectation/outlook

Wall Street is expecting earnings of $0.23 a share, down from last year's $0.52. The number of monthly active users on Overwatch, Call of Duty Mobile and World of Warcraft will be keenly watched as will revenue from in-game purchases. Growth in eSports and mobile gaming will also be picked over as Activision moves more and more to being a digital publisher.

 

 

 

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