The busiest earnings week of the season is under way.
There are 174 S&P 500 index SPX, +0.18% companies scheduled to report earnings this week, according to FactSet analyst John Butters. Eleven of the 30 Dow Jones Industrial Average DJIA, -0.06% components are on the docket as well.
So far, this earnings season has been a rather strong one. Of the S&P 500 companies that reported before this week, 87% beat earnings expectations and 77% beat revenue expectations, Butters wrote. Both of those statistics are above the five-year average.
The current week brings earnings from chip makers Intel Corp. INTC, +0.77% and Advanced Micro Devices Inc. AMD, +0.97% car makers Ford Motor Co. F, -0.85% and General Motors Co. GM, -0.33% social-networking companies Facebook Inc. FB, +0.46% and Twitter Inc. TWTR, -0.25% and restaurants McDonalds Inc. MCD, +0.49% and Chipotle Mexican Grill Inc. CMG, +1.20% among many others.
Here are the big themes to watch this week, as 35% of the S&P 500 reports quarterly results.
Internet-ad giants
This week brings earnings from Facebook and Twitter, both of which remain under fire for their abilities to handle fake accounts and false information on their respective platforms. Facebook reports Wednesday afternoon, and Twitter reports on Friday morning.
Facebook last week said that it had suspended another data-analytics company that may have violated Facebook policies. In addition, Chief Exeuctive Mark Zuckerberg drew criticism for his argument that Facebook shouldn’t take down posts from Holocaust deniers because they don’t intend to get that information wrong.
As for Twitter, the company said earlier in July that it would remove millions of suspected fake accounts but that reported user numbers wouldn’t see much impact given that the accounts were too new to have appeared in reported numbers anyway. Twitter shares have gained 39% over the past three months, so there will be pressure on the company to back up that performance with strong numbers.
Alphabet Inc. GOOGL, +1.10% GOOG, +1.74% reports Monday afternoon. Management has already said that it expects the European Union’s $5.1 billion antitrust fine to wipe out most of Alphabet’s profits, even as the company appeals the decision.
Amazon.com Inc. AMZN, -0.65% is on the docket for Thursday afternoon, and can also be considered an advertising giant as it pulls in billions from selling ads on its site. Stifel analyst Scott Devitt expects that AWS growth accelerated in the latest two quarters and he projects 46% revenue growth. The company is lapping price increases from last May, he wrote. On the e-commerce side, Devitt will be looking for commentary on the Prime price increase, Prime Day traction, Whole Foods progress, and the recent purchase of PillPack, an online-pharmacy service.
Chip makers
With AMD and Intel set to deliver their earnings numbers on Wednesday and Thursday, respectively, investors will have a chance to see the extent to which AMD is benefiting at Intel’s expense. AMD has been making big strides in PC chips, and several analysts see the company posting gains versus Intel when it comes to PCs, as Intel looks to replace its chief executive. Any such progress there may show up in AMD’s outlook as well.
Also of note for AMD is the company’s commentary on cryptocurrency revenue. Some analysts have warned that AMD investors will be in for a shock once the crypto craze eases, so it will be worth watching management’s commentary about how much crypto sales impacted the current quarter and how much they’re expected to factor in going forward.
Finally, chip maker Qualcomm Inc. QCOM, +0.80% will be closely watched on Wednesday, as the company reports its latest results and faces the deadline for its proposed purchase of NXP Semiconductors NV. NXPI, +1.68% “Assuming no [regulatory] approval is received by then, Qualcomm will have to either officially walk (as recent signaling has suggested they might be prepared to do) or to push out again (assuming NXPI approves),” Bernstein analyst Stacy Rasgon wrote Monday. He said that another monthslong delay “may not be taken well” by investors.
Auto makers
Management commentary about expected tariff impacts will be in focus across industries this earnings season, including when auto makers Ford and GM report their results on Wednesday.
“When assessing the impact of increased global trade tensions, we believe there is no bigger near term risk for U.S. OEMs than the potential for anti-US sentiment in the domestic China market,” Morgan Stanley’s Adam Jonas wrote earlier this month. “China accounts for one-third of GM profit and cash flow… something GM does not want to be smaller.”
Investors will also be paying attention to auto sales numbers, particularly in regards to pickups and sport-utility vehicles. Ford is likely to provide more commentary on its May decision to kill off sedans in North America.
In motorcycles, Harley-Davidson Inc. HOG, -0.41% will likely share more information about its plans to move some production overseas, which sparked the ire of President Donald Trump last month.
Payments
This week is a big one for payments companies, with Visa Inc. V, -0.68% and PayPal Holdings Inc. PYPL, +2.02% due to deliver results on Wednesday afternoon and Mastercard Inc. MA, +0.55% up the next morning.
“We view a continued strong macroeconomic backdrop as driving solid fundamentals for Visa, in addition to continued Visa Europe accretion and good cross border volume trends,” Mizuho analyst Thomas McCrohan wrote Monday.
In general, investors in Visa and Mastercard should look for commentary on expected settlements in long-running merchant suits, which are already set to be reflected differently in the two companies’ financials. For PayPal, watch for information about Pay with Venmo uptake and impact as well as growth in total payment volume. TPV growth “is the #1 driver of stock performance in our view,” Bernstein’s Harshita Rawat wrote Monday.
Restaurants
Several big restaurant names are on the schedule for this week, including Starbucks Inc. SBUX, +0.55% McDonalds, and Chipotle Mexican Grill, all of which report Thursday.
Starbucks faces more reasonable growth expectations now, and investors will be looking for commentary on China as well as the company’s ability to drive more afternoon traffic. Chipotle is expected to share information about pick-up shelves and their business impact. McDonald’s will share information about its breakfast sales amid a scare from its salads; Cowen & Co. analyst Andrew Charles wrote recently that thinks breakfast woes from earlier in the year “resurfaced when the marketing focus shifted to fresh beef.”
And many more
In the health space, Biogen Inc. BIIB, -0.16% Celgene Corp. CELG, -0.02% Merck & Co. Inc. MRK, +0.27% Amgen Inc. AMGN, -0.27% and AbbVie Inc. ABBV, +0.55% are all on the docket.
AT&T Inc. T, -0.32% may detail more plans for Time Warner, though the approval of that merger is being appealed by the government, and fellow telecoms giants like Verizon Inc. VZ, +0.26% and Comcast Corp. CMCSA, -0.38% will also disclose quarterly numbers. Mattel Inc. MAT, +3.88% , which saw its stock rise after rival Hasbro Inc. HAS, +12.89% reported a better-than-expected quarter on Monday, will report Wednesday.