The week ahead
In the UK, we expect to see further trading updates including FDM Group (Holdings) PLC (LON: FDM) on Friday and possibly one from Keywords Studios PLC (LON: KWS).
FDM, which provides information technology (IT) consultancy services by assigning what it calls "mounties" to its customers, has underperformed the tech sector over the pandemic. In its third-quarter (Q3) trading update in October it indicated that while trading was comfortably in line with the board's expectations, utilisation rates were significantly lower than prior years; however, there had been an improvement in utilisation since the first half. The focus will be on how the latest prolonged lockdown will be having on the "mountie utilisation rate" and the group’s outlook.
Keywords Studios released a buoyant trading update in November with profitability well ahead of consensus while revenues were in line. This suggests that the consolidation strategy is working as margins are expanding with the increased scale. Since the November update, Keywords has announced a number of acquisitions and appointed a chief operating officer.
Across the pond, the earnings season moves into full swing with big tech companies Apple, Microsoft and Facebook reporting, among many others. Microsoft reports Q2 earnings on Tuesday, Apple reports Q1 results on Wednesday while Facebook reports Q4 earnings on Wednesday. Big tech companies have enjoyed a tailwind from the pandemic due to the shift to home working and the market will be scrutinising for any weaknesses given their punchy earnings multiples while also trying to assess if they can continue the momentum when we come out of the pandemic. Apple trades on around 34x this year’s consensus earnings, while Microsoft trades on around 33x and Facebook on around 26x.
Elsewhere, electric vehicle maker Tesla reports Q4 results on Wednesday, which should be fun since the stock trades at over 200x this year’s consensus earnings and the focus will be on determining if the growth in deliveries is enough to justify the ratings. Meanwhile, chipmaker AMD reports Q4 earnings on Tuesday. Much of the AMD focus will be on the integration of Xilinx which it acquired on October in an all-stock deal. Fellow chipmaker Texas Instruments also reports Q4 results on Tuesday.
Other US tech-related companies expected to report this week include: Agilysys, F5 Networks, MicroStrategy, Automatic Data Processing, Commvault Systems, Cree, Corning, ServiceNow, Atlassian, Bottomline Technologies, Western Digital, National Instruments, Juniper Networks, Skyworks Solutions, Netscout Systems, MACOM and Lam Research.
Events calendar
Date · Company · Event · Period ending
29-Jan · FDM · Trading update · 31-Dec
January · Keywords Studios · Trading update · 31-Dec
02-Feb · Idox · Final results · 31-Oct
04-Feb · NCC Group · Interim results · 30-Nov
09-Feb · Microfocus · Final results · 31-Oct
09-Feb · Ocado · Final results · 30-Nov
Early Feb · RM Group · Final results · 30-Nov
16-Feb · Blancco Tech · Interim results · 31-Dec
25-Feb · Dotdigital · Interim results · 31-Dec
February · VR Education · Final results · 31-Dec
01-Mar · Craneware · Interim results · 31-Dec
01-Mar · Quartix · Final results · 31-Dec
03-Mar · Avast · Final results · 31-Dec
03-Mar · GetBusy · Final results · 31-Dec
09-Mar · Gresham Tech · Final results · 31-Dec
Early Mar · Attraqt · Final results · 31-Dec
11-Mar · Spirent · Final results · 31-Dec
11-Mar · FDM · Final results · 31-Dec
16-Mar · Computacenter · Final results · 31-Dec
16-Mar · Bango · Final results · 31-Dec
16-Mar · KRM22 · Final results · 31-Dec
17-Mar · Kape · Final results · 31-Dec
18-Mar · Emis · Final results · 31-Dec
18-Mar · Ocado · Q1 trading · 28-Feb
24-Mar · Softcat · Interim results · 31-Jan
25-Mar · Learning Technologies · Final results · 31-Dec
March · Keywords Studios · Final results · 31-Dec
March · Boku · Final results · 31-Dec
March · IQGeo · Final results · 31-Dec
April · Supply@Me · Final results · 31-Dec