The fourth week of July 2024 brings a diverse set of earnings reports from tech giants, telecommunications leaders, and more. Here's what investors should focus on:
Monday, July 22nd
Verizon (VZ) - ★★★★
Ranked #47 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $1.15
Key Indicators to Watch: Wireless subscriber growth and churn rate, 5G network expansion and adoption, Average Revenue Per Account (ARPA), Progress in business and enterprise services
Tuesday, July 23rd
Spotify (SPOT) - ★★★★
Ranked #17 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $1.05
Key Indicators to Watch: Monthly Active Users (MAUs) and Premium Subscribers growth, Average Revenue Per User (ARPU), Gross margin improvements, Podcast content strategy and monetization
Alphabet (GOOGL) - ★★★★
Ranked #16 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $1.84
Key Indicators to Watch: Google Search and advertising revenue, YouTube ad revenue and subscriber growth, Google Cloud performance and market share gains, Progress in AI initiatives and their impact on various services
Tesla (TSLA) - ★★★
Ranked #82 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $0.61
Key Indicators to Watch: Vehicle delivery numbers and production efficiency, Gross margins and impact of price adjustments, Energy generation and storage revenue, Updates on new models and expansion plans
Visa (V) - ★★★★
Ranked #20 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $2.42
Key Indicators to Watch: Payment volume growth, Cross-border transaction volume, Progress in digital payment solutions, Impact of global economic conditions on consumer spending
Wednesday, July 24th
AT&T (T) - ★★★★
Ranked #58 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $0.57
Key Indicators to Watch: Wireless subscriber additions and churn rate, 5G network rollout progress, Growth in fiber internet subscribers, Free cash flow and debt reduction efforts
Chipotle Mexican Grill (CMG) - ★★★★
Ranked #59 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $0.32
Key Indicators to Watch: Comparable restaurant sales growth, Digital sales percentage, Restaurant-level operating margin, New restaurant openings and expansion plans
Thursday, July 25th
Comcast (CMCSA) - ★★★★
Ranked #54 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $1.12
Key Indicators to Watch: Broadband subscriber growth, Peacock streaming service subscriber numbers and content strategy, Theme park attendance and revenue, Cable TV subscriber losses and cord-cutting trends
Coursera (COUR) - ★★★★
Ranked #31 in Q3 2024 SMID Equity Rankings
Earnings per share (EPS) estimate: $0.01
Key Indicators to Watch: Registered learners growth, Degree program enrollment, Enterprise customer acquisition, Gross margin and path to profitability
Friday, July 26th
T. Rowe Price (TROW) - ★★★★★
Ranked #5 in Q3 2024 Large Cap Equity Rankings
Earnings per share (EPS) estimate: $2.26
Key Indicators to Watch: Assets under management (AUM), Net client inflows/outflows, Investment performance across different asset classes, Impact of market volatility on fee-based revenue
A Look Back
Charles Schwab Stock Dips Nearly 7% Following Q2 Earnings Release
Charles Schwab - ★★★★
Ranked #28 in Q3 2024 Large Cap Equity Rankings
Charles Schwab (SCHW) saw its stock decline by almost 7% in intraday trading following the release of its second-quarter earnings report. The brokerage giant reported a 2% drop in profit, primarily due to increased interest payments on client deposits and its own borrowings.
The earnings report highlights the ongoing challenges faced by financial institutions in the current interest rate environment. As the U.S. Federal Reserve maintains elevated interest rates, companies like Charles Schwab are feeling the pressure of higher deposit costs.
Despite the profit decline, there were some bright spots in Schwab's financial results. The company reported an increase in fees, which helped to partially offset the drop in quarterly profit. Total client assets rose impressively by 17% to $9.41 trillion in the quarter ending June 30, compared to $8.02 trillion in the same period last year.
However, net interest revenue, a key metric for brokerages, fell 6% to $2.16 billion. On a more positive note, asset management and administration fees, earned from managing mutual funds and exchange-traded funds, saw a significant increase of 18% to $1.38 billion.
Overall, Charles Schwab's second-quarter net revenue rose modestly by 1% to $4.69 billion.
On an adjusted basis, the company posted a quarterly profit of $1.47 billion, or 73 cents per share, compared with $1.49 billion, or 75 cents per share, a year earlier.
Despite today's stock price decline, Charles Schwab has shown resilience in 2024, with its stock up 2% year to date. Based on current trading levels, SCHW is now trading 14% below the 12-month price target of $80.00 set in the Q3 Large Cap Equity Rankings.
We maintain a positive outlook for the stock in the intermediate term. It's possible that today's dip may present an opportunity for investors who believe in the company's long-term prospects.
As the financial sector continues to navigate the challenges of the current economic landscape, Charles Schwab's performance will be closely watched by investors and industry observers alike.
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