As earnings season draws to a close, investors will still have a lot to watch this week as major companies across a range of sectors provide updates that could offer valuable insight into market trends.
In cybersecurity, Palo Alto Networks is due to report earnings as investors focus on whether the company has capitalized on rival CrowdStrike’s recent outages, while Chilean copper miner Antofagasta is due to reveal how it has fared amid a slide in the price of copper, a key gauge for global commodity markets.
In the technology sector, Analog Devices is expected to offer a glimpse into the continuing impact of artificial intelligence (AI) hype on the semiconductor industry and shed light on whether the enthusiasm for AI is translating into tangible growth.
In the fashion industry, Urban Outfitters is expected to fail to meet Wall Street expectations, highlighting the challenges facing the retail sector.
Beyond the corporate world, all eyes will be on the Jackson Hole Central Banking Symposium, taking place from Thursday, August 22 to Saturday, August 24. The annual gathering of monetary policymakers is likely to influence markets around the world as discussions on interest rates and economic strategies could shape the course of the coming months.
Some things to note:
PALO ALTO (PANW) — Reports fourth-quarter earnings on Monday, Aug. 19
Palo Alto Networks (PANW) is scheduled to report its fourth-quarter earnings after the market closes on Aug. 19, and investors will be eager to hear a strong outlook for 2025 and an update on the company’s ongoing “platformization” strategy.
Analysts expect the cybersecurity giant’s revenue to rise to $2.16 billion (£1.68 billion), up from $1.95 billion in the same period last year, according to estimates compiled by Visible Alpha. Net profit is expected to reach $232.9 million, or 66 cents per share, a small increase year-on-year but a sequential decline from the previous quarter.
Palo Alto Networks has met or exceeded expectations in 16 of the past 17 quarters, according to data from Benzinga Pro. Given this history, the market will be watching to see if the company can continue this trend.
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Beyond the immediate results, the company’s outlook for fiscal 2025 will be in focus. Analysts expect full-year revenue to reach $9.09 billion. Palo Alto has previously issued comprehensive guidance that includes projections for billings, revenue, net earnings per share, and free cash flow margins. These metrics will be scrutinized for signs of the company’s future performance.
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The earnings report comes on the heels of public relations troubles for Palo Alto Networks, which recently faced criticism over alleged “sexist” behavior at a company event. The controversy erupted after a photo went viral of two women wearing lampshades with the company’s logo on their heads. The incident was widely criticized and the CEO apologized, calling the situation “unacceptable.”
Today, Palo Alto Networks CEO Nikesh Arora apologized for a marketing decision made by Palo Alto at Black Hat 2024 in Las Vegas.
Many visitors openly criticized Palo Alto for being sexist and questioned why the hostesses were dressed as lamps. pic.twitter.com/LP9hZSwaVB
— vx-underground (@vxunderground) August 14, 2024
Last quarter, Palo Alto Networks reported revenue of $1.985 billion, beating expectations of $1.967 billion, and earnings per share of $1.32, beating expectations of $1.25 per share.
“We have remained disciplined in our execution while investing in go-to-market and innovation. We delivered consistent profitable growth in the third quarter and look forward to achieving our strategic and financial objectives as we approach the end of the year,” Palo Alto CFO Deepak Gorecha said at the time.
Antofagasta (ANTO.L) — Reports first-half results on Tuesday, August 20
Financial markets are experiencing turmoil: stock markets are fluctuating, government bonds are rising, and currency markets are showing volatility.
Amid this volatility, copper, a key industrial metal, fell below $9,000 a tonne for the first time in nearly six months, which could be an important signal about the outlook for the global economy.
Rising copper prices are typically seen as a positive indicator of the health of the global economy. The metal, nicknamed “Doctor Copper” for its diagnostic abilities, has a wide range of industrial uses from infrastructure to auto manufacturing and is a barometer of economic activity.
In the corporate sector, attention will be focused on FTSE 100 (^FTSE) company Antofagasta, which is almost exclusively focused on copper, and is due to report first-half results on Tuesday.
Shares in Chilean mining companies have fallen recently, reflecting weak copper prices and inconsistent trading conditions in July. Investors and analysts will be keeping an eye on five key metrics from the upcoming report, according to AJ Bell investment director Russ Mould (head of financial analysis), and investment analysts Danny Hewson and Dan Coatsworth.
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Copper Production: Antofagasta’s copper production is expected to be in the range of 670,000-710,000 tonnes in 2024, up from 660,600 tonnes in 2023. However, the company’s July update suggested production will be at the lower end of this range and cash costs may plateau at $1.60 per pound.
Costs: Net cash costs were stable at $1.60 per pound last year and were originally forecast to rise modestly to $1.65 in 2024. This has been revised to $1.70 due to lower ore grades at Centinela and Los Pelambres, which equates to $3,750 per tonne, still below current copper prices.
Profits: Analysts expect pre-tax profit to rise 25% to $2.5 billion in 2024, from $765 million in the first half of last year. EBITDA, Antofagasta’s preferred profit metric, is expected to be $1.3 billion in the first half of 2023, rising year-over-year through 2024.
Capital Expenditures: The company’s capital expenditures are expected to reach $2.2 billion in 2023, rising to $2.7 billion in 2024 due to investments in Centinela and Los Pelambres.
Dividends: Antofagasta’s total dividend has been reduced to 36 cents in 2023 from 59.7 US cents in 2022. Analysts expect it to fall further slightly to 34 cents this year, thanks in part to higher capital expenditure. Last year, the company declared an interim dividend of 11.7 cents.
Analog Devices (ADI) — Reports third-quarter results on Wednesday, August 21
Silicon chip maker Analog Devices has long been seen as a valuable barometer of U.S. and global economic activity.
Specializing in analog, mixed-signal processing and power management chips, the company serves over 125,000 customers across multiple sectors and offers more than 75,000 different products. More than half of its sales come from the industrial market, a quarter from the automotive sector, and the rest from communications and consumer applications.
Given this broad exposure, the recent decline in Analog Devices’ stock price, along with the overall Philadelphia Semiconductor Index (SOX), takes on even more significance, says AJ Bell. The company’s stock price and the SOX were surging through July, but have since moved closer to bear market territory, Mould and Hewson say. The decline could simply be a correction after a strong rally, or it could reflect deeper concerns about global economic momentum.
Analysts expect revenue to grow 5% sequentially to $2.3 billion, a key number that will be closely scrutinized. During the second-quarter earnings call, management projected roughly 10% sequential growth in the consumer division, mid-single-digit growth in the industrial division, and slower growth in the communications and automotive divisions.
Guidance for the final quarter of the fiscal year will also be important: consensus estimates call for August-October sales to rise 5% sequentially to $2.4 billion, but still be down 13% year-over-year. Re-weakening U.S. manufacturing purchasing managers’ index (PMI) data could make this target difficult to hit.
Attention will also be on operating margins, which CEO and Chairman Vincent Roche and CFO Richard Puccio have guided to market expectations of a 40% margin as of the midpoint of the third quarter.
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The company expects earnings per share (EPS) of $1.50 (plus or minus $0.10) on a projected tax rate of 11% to 13%. Investors will be keen to hear any commentary on the final quarter, with the consensus forecast being $1.60, still well below the figure for the same period last year.
For the full fiscal year ending in October 2024, ADI is expected to post sales of $9.3 billion and EPS of $6.24, down from $12.3 billion and $10.09 in 2023. But analysts expect sales to rise 15% to $10.7 billion in fiscal 2025, with EPS expected to rebound 25% to $7.98. But it may be too early for management to confidently offer guidance for next fiscal year.
One indicator of management’s confidence in the future is capital spending, which fell by a third in the second quarter from a year ago to $188 million. For the full year, analysts expect spending to fall sharply to just over $700 million from $1.3 billion in fiscal 2022.
Urban Outfitters (URBN) — reports quarterly earnings on Wednesday, August 21
Urban Outfitters is scheduled to announce its financial results for the fiscal year ending July 2024 on August 21, but the market is expecting a decline in profits compared to the previous year despite increased sales.
According to Zacks Research, the company is projected to report quarterly earnings of $0.98 per share, down 10.9% from the year-ago period, while revenue is expected to increase 5.2% year-over-year to $1.34 billion.
If Urban Outfitters beats those key expectations, its shares could rise, while if the company misses those expectations, its shares could fall, Zacks Research analysts said.
Malvika Sheth wears an Urban Outfitters dress as part of Paris Fashion Week 2024. (Daniel Zucnik via Getty Images)
With this earnings report being closely scrutinized, investors will be eager to gauge the possibility of a positive earnings surprise. Such a result could signal better-than-expected performance in a tough retail environment and boost the stock price in the near term.
But with revenue expected to decline, Urban Outfitters’ ability to control costs and drive sales growth will be in the spotlight as analysts and investors assess its prospects for the rest of the year.
Beyond the immediate reaction to the earnings numbers, the sustainability of stock price movement and future earnings forecasts will depend heavily on the insights provided by management during the earnings call. Management’s discussion of the current business situation, including consumer demand and operational challenges, is critical in shaping investor sentiment.
Other companies reporting earnings next week include:
Monday, August 19
Tungela Resources (TGA.L)
Estee Lauder (EL)
Tuesday, August 20
Wood Group (WG.L)
Oxford Instruments (OXIG.L)
Tribal (TRB.L)
Anexo (ANX.L)
Geely Automobile (80175.HK)
Coloplast (COLO-B.CO)
Lowe’s
Toll Brothers (TOL)
COTY
Nordstrom (JWN)
Wednesday, August 21
Mobico (MCG.L)
Costain (COST.L)
China Telecom (601728.SS)
Xiaomi (1810.HK)
Agilent (A)
Snowflake (SNOW)
Zoom Video Communications (ZM)
Thursday, August 22
MacFarlane (MACF.L)
Hays (HAS.L)
Ping An Insurance (601318.SS)
AIA (1299.HK)
Baidu (BIDU)
Swiss Re (SREN.SW)
Dollar Tree (DLTR)
Weekdays (WDAY)
Bilibili (BILI)
Peloton
Friday, August 23
Meituan (3690.HK)
You can see Yahoo Finance’s complete calendar here .
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