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Most Anticipated Earnings Reports This Week: MSFT, TSLA, AAPL and HOOD

It’s earnings season. This week, among the most anticipated reports are trillion-dollar-club members Apple, Microsoft and Tesla. Commission-free broker Robinhood could also steal the headlines.

Key points

  • Microsoft and Apple are likely to post solid earnings, as usual. However, for the Big Tech group, it may take more than great results to impress the market.
  • Tesla beat car deliveries estimates in 2021 and will likely top earnings estimates. New product launches and updates can serve as a positive catalyst.
  • Robinhood is unlikely to report impressive results, as was the case in fiscal Q3. The outlook concerns investors.

(Read also from Wall Street Memes: Is Former Meme Stock Favorite Vinco Ventures Making a Vicious Comeback?)

It's earnings season. While dealing with intense bearishness so far in 2022, investors will turn their attention to business fundamentals and look for potential surprises and disappointments.

This week, trillionaire-club member Microsoft will report earnings on Tuesday, while Tesla will take center stage on Wednesday. Big Tech Apple and commission-free broker Robinhood will follow up on Thursday.

Microsoft earnings overview

On Tuesday, January 25, after the closing bell, tech giant Microsoft reports on its fiscal second quarter. The Redmond-based company made the headlines recently after acquiring Activision Blizzard, the iconic producer of games like Call of Duty and Candy Crush. The all-cash transaction was valued at $68.7 billion.

Figure 1: Microsoft (MSFT) acquiring Activision Blizzard (ATVI).

Figure 1: Microsoft (MSFT) acquiring Activision Blizzard (ATVI).

For the second fiscal quarter, Wall Street expects Microsoft to report earnings per share of $2.32, up 14% year-over-year, and revenue of $50.7 billion, up nearly 18% year-over-year. For this to happen, Microsoft is counting on robust revenue growth across all segments.

Figure 2: Microsoft's EPS surprise & estimates by quarter.

Figure 2: Microsoft's EPS surprise & estimates by quarter.

Most of Microsoft’s revenues are expected to come from Intelligent Cloud, fueled in part by the success of the Azure platform, at between $18.1 billion and $18.3 billion in sales. More Personal Computing should bring in $16.3 billion to $16.7 billion, led in part by strength in Xbox amid the current video game console refresh. Lastly, Productivity and Business Processes should produce $15.7 billion to $15.9 billion in sales, propelled by Office and LinkedIn.

Tesla earnings overview

On January 26, after the closing bell, it will be Tesla's turn to report Q4 results. The management team is focused on growing production capacity as fast as possible. The company aims to achieve 40% average annual growth in vehicle deliveries by increasing production at its gigafactory plants in Berlin, Germany, and Austin, Texas.

On cash and profit, Tesla assures investors that it has sufficient liquidity to fund the product roadmap in line with its ability to grow production over the long term, with operating margins continuing to grow over time.

As announced by the company on January 2, Tesla achieved production of over 305,000 vehicles and deliveries of over 308,000 vehicles in Q4. This was far above the 263,000 that experts had expected. This brings the total number of vehicles delivered in 2021 to over 936,000.

Therefore, for the most recent quarter, expectations are high. Wall Street forecasts earnings per share of $2.35 and revenues of $16.65 billion, which indicates a year-over-year increase in EPS of 193% and revenue growth of more than 55%.

Figure 3: Tesla's EPS surprise & estimates by quarter.

Figure 3: Tesla's EPS surprise & estimates by quarter.

(Read also from Wall Street Memes: Tesla Stock Earnings: Here's What Wall Street Expects)

Apple earnings overview

Apple’s earnings will take place on Thursday 27, after the closing bell. Our sister channel Apple Maven will cover the event in real time, via live blog. The Cupertino company’s stock tends to underperform its own two-week average before the earnings release. But then, share price often rises shortly after the results are published.

This time, Wall Street expects earnings per share of $1.88 and revenues of $118.31 billion, which represents EPS growth of about 12% year-over-year and revenue growth of 6%. If confirmed, Apple’s sales will be the highest of any quarter in the company's history, beating the 2020 holiday quarter for the top spot.

Figure 4: Apple's EPS surprise & estimates by quarter.

Figure 4: Apple's EPS surprise & estimates by quarter.

The Mac segment is likely to stand out, with PC sales skyrocketing after the start of the pandemic. The iPhone 13 is likely to be a success too, reinforcing the idea that Apple is one of the best (if not the best) consumer products and services companies in the world.

The biggest risk to investors may not be the business itself. Rather, valuations could continue to be a concern during this moment of broad market selloff, following a dizzying Q4 rally.

(Read also from Apple Maven: Apple Stock: How To Trade It Before And After Earnings)

Robinhood's earnings overview

Finally, on Thursday, January 27, it will be Robinhood's turn to report fourth quarter earnings. Consensus points at a loss per share of $0.30, almost double the previous quarter's estimate. Wall Street expects revenues of $366.64 million, approximately $77 million less than what was expected in the previous quarter.

Figure 5: Robinhood's EPS surprise & estimates by quarter.

Figure 5: Robinhood's EPS surprise & estimates by quarter.

Interestingly, this is the same forecast that Wall Street assigned to the company's second quarter results. However, at the time, Robinhood surprised analysts by announcing a 44-cent gain, thanks in large part to increased cryptocurrency trading.

However, Robinhood is unlikely to deliver similar results. In Q3, Robinhood's cryptocurrency revenue fell from $223 million to $51 million. The decrease led the company to reduce its overall revenue guidance for the fourth quarter to $325 million.

Worth noting, the unfavorable macroeconomic backdrop has hurt investor sentiment. Wall Street firms Deutsche Bank, KeyBanc, and Goldman Sachs have recently lowered their price targets on Robinhood stock on the basis of interest rate sensitivity.

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Earnings season will kick into gear this week. Which of these do you expect to deliver the best set of results?

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)