Earnings Previews: Ericsson, Netflix, Regions Financial, Schlumberger
Shortly after Wednesday’s opening bell, the Dow Jones industrials traded up 0.16%, the S&P 500 was up 0.32% and the Nasdaq was 0.63% higher.
After U.S. markets closed Tuesday, United Airlines reported earnings per share (EPS) and revenue that exceeded consensus estimates. The airline also raised first-quarter and full-year guidance sharply higher than consensus forecasts. Shares traded up 1.7% after Wednesday’s opening bell.
Before markets opened Wednesday morning, Charles Schwab missed both profit and revenue estimates. Schwab added $428 billion in new assets but suffered a drop of $1.5 trillion in market value to end the year with client assets of $7.05 trillion, down from about $8.14 trillion at the end of 2021. Shares traded down 3.3% a few minutes into the session.
Prologis beat consensus estimates on both the top and bottom lines. The commercial real estate investment trust lowered guidance for the new fiscal year, commenting that it likely will take a few quarters before the ship gets righted. Shares opened 1.6% higher Wednesday.
After U.S. markets close this, Alcoa, Discover Financial and Kinder Morgan will report results, and first thing Thursday morning, look for reports from KeyCorp, Procter & Gamble and Truist.
Here is a look at four companies set to report quarterly results later on Thursday or on Friday morning.
Ericsson
Stockholm-based network equipment maker Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC) has seen its share price drop by nearly 47% over the past 12 months. Shares plummeted last February following reports of Ericsson’s dealings with Iraq that may have inadvertently funded the Islamic State (ISIS). Last week, the company said it was setting aside approximately $220 million to pay a U.S. Justice Department fine related to Ericsson’s alleged dealings with Iraq. The $220 million will be booked in the fourth-quarter report.
Of 24 analysts covering the stock, just seven rate Ericsson as a Buy or Strong Buy. There are 12 Hold ratings as well. Based on a median price target of $6.72 and a recent price of around $6.06, the upside potential is almost 11%. At the high price target of $10.27, the upside potential is 69.5%.
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Analysts are expecting the company to report fiscal second-quarter revenue of $8.16 billion, which would be up 33.1% sequentially and by 3.4% year over year. EPS are forecast at $0.24, up 56% sequentially but down 33% year over year. For the full year ending in December, analysts are looking for EPS of $0.62, down 22.6%, and revenue of $25.92 billion, up 0.9%.
Ericsson stock trades at 9.8 times expected 2022 EPS, 9.0 times estimated 2023 earnings of $0.67 and 8.1 times estimated 2024 earnings of $0.76 per share. Ericsson’s 52-week trading range is $5.16 to $12.78, and the company pays an annual dividend of $0.23 (yield of 3.58%). Total shareholder return over the past 12 months is negative 45.5%.
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