After Netflix earnings disappointed last week, it will be the turn of the other so-called FANG stocks to step up to the plate this week, with Facebook Inc (NASDAQ:FB.), Amazon Inc (NASDAQ:AMZN), and Google-owner Alphabet Inc (NASDAQ:GOOGL) all set to report.
Netflix’s share price has tumbled by 14% since it reported weaker-than-expected subscriber growth on Wednesday, with the streaming service provider facing a big wave of competition.
Next up, Facebook reports after the bell on Wednesday, with Amazon and Alphabet both due on Thursday.
Data handling key for Facebook
Investors will be focused on how Facebook, the leading social network provider is responding to regulatory scrutiny of its handling of users’ personal data after recent scandals and the imposition of GDPR.
On the financials front, Facebook’s June-quarter revenue is seen jumping to $16.4 billion, with earnings per share forecast at $2.03 by analysts at Wedbush.
In a preview note, the analyst said: “Our revenue growth estimate of 24% year-over-year compares to the implied consensus growth rate of 25%, growth of 26% in Q1, and guidance for revenue growth rates to decline sequentially throughout 2019.
“User growth across the Facebook platform, engagement growth from Instagram and the Stories format, and ad targeting headwinds from the regulatory impact of GDPR and other opt-in privacy initiatives should contribute to another quarter of double-digit year-over-year impressions growth offset by a modest decline in ad pricing.”
Google growth continues
Analysts at Wedbush expect Alphabet’s quarterly revenue to rise by 17.1% to $38.24 billion, with adjusted underlying earnings (EBITDA) seen at $14.35 billion.
In an earnings preview for Alphabet, the analysts said: “Our revenue growth estimate for Q2:19 compares to growth of 16.7% in Q1:19 (when ad revenues were impacted by the timing of a number of product changes and hardware revenues were impacted by smartphone category pressure), and 25.6% in Q2:18.
“Growth in Q2 will likely largely reflect continued solid growth against an increasingly large and maturing base, particularly driven by Cloud, YouTube, and mobile search.”
Declining profitability for Amazon
For Amazon, the Wedbush analysts forecast quarterly revenue growing by around 20% to $63.8 billion, with operating income of $4.1 billion, above guidance for revenue of $59.5-63.5 billion and operating income of $2.6-3.6 billion.
They pointed out: “Guidance implies sequential revenue with declining profitability. In order to hit the midpoints (of) its guidance ranges, Amazon had to generate incremental operating expenses of over $2 billion assuming a sequentially flat gross margin of 43.2%.
“This level of expenditure will be difficult to reach even after accounting for the approximately $800 million in incremental spending related to Prime delivery speed.”
Twitter also set to report
Aside from the FANGs, another tech social media stalwart, Twitter Inc (NASDAQ:TWTR) will also post second quarter earnings before the market open on Friday.
Wedbush’s analysts are looking for revenue of $835 million, the top-end of guidance for $770-835 million, with adjusted EBITDA seen at $305 million.
They said: “We expect continued momentum with newer ad products and formats (e.g., the Video Website Card and the Video App Card) as well as improved engagement from product changes to again drive results towards the high end of guidance.”