Tech giants Apple, Microsoft and Tesla headline a busy earnings week
Many tech companies have seen sales jump during pandemic
Tech giants Microsoft Corp., Apple Inc. and Tesla Inc. will be among the companies headlining a busy earnings week, shedding more light on how businesses performed at the end of 2020 as Covid-19 cases rose.
Overall, more than a fifth of the S&P 500 and a third of the Dow Jones Industrial Average are expected to provide their quarterly updates starting Monday, according to FactSet. In addition to tech, the schedule includes some of the biggest names in manufacturing, restaurants and telecommunications.
Many tech companies have seen their sales jump during the coronavirus pandemic, as people leaned more on their products and services while working, schooling and entertaining from home. And the strong results are expected to continue in the holiday quarter. For the first time ever in their respective histories, Apple's quarterly sales are expected to cross $100 billion and Microsoft is projected to pass $40 billion.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MSFT | MICROSOFT CORP. | 411.84 | -2.74 | -0.66% |
| AAPL | APPLE INC. | 168.00 | -1.38 | -0.81% |
| TSLA | TESLA INC. | 155.45 | -1.66 | -1.06% |
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Microsoft, which reports its second-quarter results on Tuesday, has benefited from rises at its cloud and gaming businesses. The company recently released two new Xbox gaming consoles -- the X Box Series S and X Box Series X -- for which it was expecting strong demand.
Still, other parts of Microsoft's business have faced challenges in the pandemic, such as its on-premise server business and its LinkedIn social network, said Gregg Moskowitz, Mizuho senior enterprise software analyst.
"There are puts and takes," Mr. Moskowitz said.
Apple is expected to show strong iPhone sales after the delayed launch of the iPhone 12 weighed on its fourth-quarter revenue. (Apple via AP)
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Apple, which reports first-quarter results Wednesday, is expected to show strong iPhone sales after the delayed launch of the iPhone 12 weighed on its fourth-quarter revenue. The company is among the top vendors of personal computers, which in 2020 saw their best growth in a decade. In Apple's fourth quarter, sales of iPads and laptops boosted its results.
Shares of Apple have also been resilient during the pandemic, rising 75% during the past 12 months. Microsoft shares have gained 36%.
Tesla's shares have rallied more than sevenfold during the past year. Elon Musk's company will report its fourth-quarter results on Wednesday. Analysts are expecting the electric-vehicle maker to post a profit, according to FactSet, which would be the sixth quarter in a row the company has done so. Analysts are expecting revenue to surpass $10 billion, FactSet said.
Tesla's shares have rallied more than sevenfold during the past year. (Kent Nishimura / Los Angeles Times via Getty Images)
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In addition to the tech heavyweights, major telecommunications and food companies are also releasing their results. Starbucks Corp. is slated to report on Tuesday, and McDonald's Corp. will follow on Thursday. Verizon Communications Inc. is reporting results Tuesday, followed by AT&T Inc. on Wednesday and Comcast Corp. on Thursday. 3M Co. -- a big maker of N95 masks -- is reporting its results on Tuesday.
Other notables scheduled to report include General Electric Co., Johnson & Johnson and Advanced Micro Devices Inc. on Tuesday; Boeing Co. and Facebook Inc. on Wednesday; MasterCard Inc. and Visa Inc. on Thursday; and Caterpillar Inc. on Friday.
Only 13% of the S&P 500 index have reported earnings results so far this period, according to FactSet. Earnings are on track to fall 4.7% year-over-year for the quarter, based on actual results and estimates for companies that have yet to report, FactSet said. Such a drop would mark the fourth straight quarter in which the index has reported a year-over-year decline in earnings.
Revenue for 2020's final quarter is on pace to increase 0.7% year-over-year, also based on actual results and estimates for companies that have yet to report, FactSet said.