Tech Earnings Preview: What to Watch From Twitter, Amazon, Google & More
*By Carlo Versano*
Broad stock indexes sputtered Monday, but tech investors looked ahead to one of the busiest earnings weeks of the quarter, anchored by reports from many industry heavyweights that were able to avoid overall weakness in the market.
Microsoft ($MSFT) will kick things off with its latest quarterly results on Wednesday, followed by reports from a slew of top names like Twitter ($TWTR), Amazon ($AMZN), Intel ($INTC), Snap ($SNAP), and Google parent Alphabet ($GOOGL) on Thursday.
Among the trends investors will be scouring for: continued strength in cloud computing, particularly from Amazon and Google ー two of the FAANG components ー as well as Microsoft. Growth in its cloud-based Amazon Web Services has been one of the biggest factors that powered Amazon toward a trillion-dollar market cap, which it reached briefly in the third quarter, and the transition to the software-as-a-service model has been one of the defining currents of the bull market in tech, from Adobe ($ADBE) to SAP ($SAP). Amazon will likely give an indication about its fast-growing advertising business, which is now a multibillion-dollar segment of its empire.
Investors will also be searching to see if there is evidence that a simmering trade war between the U.S. and China is starting to impact revenues. Chipmakers like AMD ($AMD) and Intel (which report Wednesday and Thursday, respectively) are highly exposed to Chinese tariffs.
We will get an update on the state of social media, with Twitter and Snap earnings. Unlike e-commerce, hardware makers or cloud companies, social earnings are mainly about one thing: active users. Snap has posted slower user growth over the past several quarters ー actually losing users in its second quarter ー as it faces continued competition from Instagram, and investors will be looking to see whether CEO Evan Spiegel has taken any steps to slow the company's huge cash burn. For Twitter, which has been aggressive in culling fake accounts and trolls, the question will be whether that has eaten into its daily active user growth.
Next week, Facebook ($FB) and Apple ($AAPL) will round out the latest quarter of FAANG earnings.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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