This earnings season has been one of the most interesting in recent memory. There are even those, my colleague Jamie included, who say it doesn’t even matter. Many businesses have retracted their guidance and for a lot of companies, the reports have been an opportunity for damage control. However, there remains a swath of companies that are actually benefitting from the global pandemic. I’m going to look at six companies whose results will give us an indication of both perspectives of the effect of coronavirus on operations.
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Disney (NYSE:DIS) reports on Tuesday after the bell, and it will not be for the faint of heart. The company has seen the rapid growth of its streaming service, Disney+, this quarter, accumulating over 50 million users within 5 months of its launch. The House of Mouse is looking to take away some of Netflix’s (NASDAQ:NFLX) dominance in the streaming wars and executives will be sure to hammer home the breakneck speed of user acquisition achieved.
However, as impressive as the numbers from Disney+ are, they account for only a small portion of Disney’s revenue and will be the majority of good news coming from tomorrow’s earnings call. Revenue from its Parks, Experiences and Products section will be under the most scrutiny from investors. Bringing in around 37% of total revenue last year, operations have essentially been brought to a standstill by the global pandemic. With no ending in sight, the resorts, theme parks, and cruise lines that have been a cash cow for the business for so long have now become a major liability. The company’s comments about reopening this section of the business will be perhaps the most pertinent for investors.
Disney reports after the bell on Tuesday, May 5th.
The coronavirus isn’t all bad news, at least not for Shopify (NYSE:SHOP). The eCommerce platform that has set its sights on Amazon’s (NASDAQ:AMZN) considerable market share has actually seen new all-time highs throughout the course of this pandemic. Whether the results match investor sentiment will all come out on Wednesday before the bell. One thing is for sure though, expectations will be sky-high after comments from CTO Jean Michel-Lemieux, who said the “platform is now handling Black Friday level traffic every day!”
Whether the uptick in traffic will result in commensurate revenue numbers will be a big factor on the call, and with Shopify’s sky-high valuation, every earnings report means that the company must deliver on growth.
Shopify reports before market open on Wednesday, May 6.
Square (NYSE:SQ) saw one of the most dramatic sell-offs of any of the stocks on this list as coronavirus fears enveloped Wall Street. Based on the potential impact for small businesses, which make up such a big portion of Square’s revenue stream, the company lost about 55% of its value in the space of three weeks. Investors were quick to recognize the payments processor was oversold and the recovery since the lows of March has been almost as remarkable as the sell-off, helped in no small part by the Government’s small business loan program. Wednesday’s earnings may inspire some more of this kind of volatility as Jack Dorsey’s afternoon job, he works at Twitter (NYSE:TWTR) in the mornings, could come under fire again.
Much like Visa (NYSE:V) and MasterCard (NYSE:MA) last week, Square’s earnings will be a tell-tale sign for consumer spending. Keep an eye out for gross payment volume across different sectors, especially its eCommerce revenue.
Square reports after the bell on Wednesday, May 6.
Peloton (NASDAQ:PTON) has grown a whopping 64% in the past two months. As gyms are forced to close across the globe, the idea of an interactive, on-demand fitness experience at home has become a very attractive prospect. There are few businesses that stand to benefit as directly from this global pandemic as Peloton and Wednesday’s earnings call will attest to whether the company has been able to take advantage.
Peloton reports after the bell on Wednesday, May 6.
You don’t have to be working in Goldman Sachs (NYSE:GS) to realize that the airlines might not be doing too hot right now. The industry has been decimated and those who are significantly debt-laden have a very real chance of going bankrupt. This point was hammered home over the weekend when Berkshire (NYSE:BRK.B) CEO Warren Buffett announced he had dumped his entire stake in the industry, unloading billions of dollars in stock of United (NASDAQ:UAL), Delta (NYSE:DAL), American (NASDAQ:AAL), and Southwest (NYSE:LUV) airlines.
Such a revelation is sure to bring extra scrutiny to JetBlue’s (NASDAQ:JBLU) earnings report on Thursday, as investors are hyper-aware of the fact that it is now a battle for survival for a lot of these companies. JetBlue’s cash and debt positions, as well as its daily cash burn, will be the most important things to look out for on the call.
JetBlue reports before market open on Thursday, May 7.
People are streaming more than ever before. There are also more streaming services available than ever before, and this number is growing. Much like Peloton, Roku (NASDAQ:ROKU) has found itself in an enviable position of being able to benefit massively from our current predicament. The stock has grown a whopping 78% since the 16th of March as investors have identified the need for Roku’s agnostic streaming platform.
Whether the results will match or even exceed these lofty expectations will come out on Thursday’s call. The stock is prone to wild swings in both directions and the report could be the catalyst for another.
Roku report after the bell on Thursday, May 7th.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above. Read our full disclosure policy here.
Financial Analyst at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.