Tech giants, Warren Buffett's empire, and the 'Generals': Here's what to look for when these 6 companies report earnings this week

Mason Trinca/Reuters

Third-quarter earnings season is well underway, and some of the world’s largest companies are slated to announce their quarterly figures this week.

Apple recently reclaimed the throne as the world’s largest company, and its latest report could send shares even higher than their current record prices. General Motors and General Electric will likely use their reports and analyst calls to calm worries related to a worker strike and transition plans, respectively.

Facebook and Google-parent Alphabet will want to post continued strength in ad revenue, as well as a defence to claims that big tech companies are an anti-trust liability. Warren Buffett’s Berkshire Hathaway may finally announce its next big purchase, as the holding company sits on a massive cash pile.

The latest reports will arrive as the US-China trade war nears a partial truce and certain recession warnings retreat from their summer highs.

Here are the figures, themes, and issues to look for when these six companies report earnings this week.


Alphabet (GOOG) — October 28

Google-parent Alphabet makes the majority of its revenue through advertising. Investors will want to see a continued uptrend in both paid clicks and cost-per-click, as strong figures in both categories would signal the key business is still expanding.

The company has also been investing in its Google Cloud service to compete with Amazon and Microsoft. Any significant growth in that business would likely excite analysts, as cloud computing revenues boosted other tech giants in recent months.

Updates on the company’s Waymo self-driving vehicle project may also be in the cards in Alphabet’s analyst call. The project entered Los Angeles for further testing earlier in October after operating in Phoenix, and successful trial runs could signal an entirely new revenue stream for Alphabet down the road.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US32.73 billion, versus $US27.16 billion in the year-ago period
  • Adjusted earnings per share: estimated $US14.30, versus $US13.03 in the year-ago period

General Motors (GM) — October 29

General Motors’ third quarter was dominated by a month-long strike involving about 48,000 workers. Some analysts viewed the event as a way for the automaker to clear away stockpiled inventory, but as the demonstration lasted longer than first expected, some found it could cost GM more than $US1 billion.

The earnings report and subsequent analyst call is sure to address the new deals inked between United Auto Workers and GM, as well as how the strike affected third-quarter revenue. Investors will want reassurance that the company won’t be threatened by another demonstration, and that it can ramp up production fast enough to gain back the efficiency lost through late September and early October.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US35.73 billion, versus $US35.79 billion in the year-ago period
  • Adjusted earnings per share: estimated $US1.29, versus $US1.87 in the year-ago period

Apple (AAPL) — October 30

Apple took back the crown as the world’s most valuable company earlier in October, and with shares hitting record highs in recent days, the tech giant’s next earnings report can either sour investors’ rosy sentiment or send its valuation even higher.

Analysts are likely to focus on iPhone 11 sales, as many reports indicate demand for the phone at higher levels than first expected. The report also arrives just days before the release of Apple TV+, so any guidance on how quickly it will grow subscribers or how much the company is budgeting for original content could grab headlines.

Finally, the report should detail whether Apple’s bet on its Services business continues to thrive or is beginning to fizzle out. The company is relying more on its service offerings to drive revenue as the iPhone upgrade cycle lengthens, so any drop in growth could spell disaster for the record share price.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US53.36 billion, versus $US53.27 billion in the year-ago period
  • Adjusted earnings per share: estimated $US2.10, versus $US2.30 in the year-ago period

Berkshire Hathaway (BRK.B) — November 1

Warren Buffett’s holding company has been blighted in recent months by Kraft Heinz’s lagging performance and the loss of one of Buffett’s top proteges. Analysts will look forward to any news on a potential increase to Berkshire’s stake in Bank of America, as well as any updates on how Buffett wants to spend Berkshire’s massive cash pile.

Berkshire is also relatively unique in that its operating earnings figure is far more relevant than earnings per share. Since the company has to calculate gains and losses from its hefty stock positions into its earnings figure, per-share earnings can drop significantly even when Berkshire isn’t necessarily losing money.

Investors will want to see that Berkshire’s operating profit remains strong and that income produced by its various businesses isn’t slowing in the wake of recession warnings and trade war escalations.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US66.47 billion, versus $US63.45 billion in the year-ago period
  • FILL IN OPERATING PROFIT/MARGINS

Facebook (FB) — October 30

Hot off Mark Zuckerberg’s congressional testimony related to the company’s Libra currency, Facebook will want to appeal to investors with steady growth in ad revenue, strong user retention, and success in spinoff products like its new dating service.

The company is also still haunted by past and potential lawsuits related to user privacy and anti-trust issues. Though the report may not offer any new details as to how Facebook plans to combat these cases, analysts are sure to ask about them in the earnings call.

The Libra project has also lost several key collaborators in the last few weeks, so any mention of a project delay, overhaul, or even complete scrapping would likely harm the company’s share price. Facebook may even unveil details on how it will work with the US government to release the crypto-coin, which may soothe regulation-based fears.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US17.34 billion, versus $US13.72 billion in the year-ago period
  • Adjusted earnings per share: estimated $US2.25, versus $US2.07 in the year-ago period

General Electric (GE) — October 30

Once a behemoth of US industry, GE is in the midst of a massive overhaul as it seeks to cut costs and focus its investments on a few key businesses. Investors aren’t yet sure the strategy will work, as GE stock is still down significantly from its early-2000 highs. Most will be interested in hearing things are going as planned, and that the shifted priorities aren’t harming quarterly profits.

The company is also still reeling from an August report that alleged GE is committing Enron-like fraud. Any update on the matter, as well as detailed rebuttals to some of the claims, could reassure analysts the company is in fine shape.

Finally, GE’s previous guidance set its cash flow as arriving between negative $US1 billion and positive $US1 billion in the third quarter. Though the company’s market cap of $US78 billion dwarfs the projection, the result will be watched closely.

Here are Wall Street’s quarterly estimates heading into the week:

  • Revenue: estimated $US26.52 billion, versus $US29.57 billion in the year-ago period
  • Adjusted earnings per share: estimated 12 cents, versus 14 cents in the year-ago period

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