Editor's note: Bloomberg analysts pointed out that Apple's repurchase pace or continue to be strong, iPhone sales in China and Europe will be weak; Google advertising business or better than its peers, cloud business revenue or growth of nearly 40%; Amazon net profit or plunge 40% >>
Author: Travis
Fa Tsai learned that just next week, the US stock earnings season will usher in a climax - FAAMG debuted! Meta, Apple, Amazon, Microsoft and Google, and other big tech companies are all scheduled to release their quarterly results next week!
Below, let's take a look at Bloomberg's latest financial report expectations for these companies, what are the giants looking at?
First, Apple
Apple expects to release its fiscal 2022 Q2 financial results after hours on April 28 (Apple's fiscal year runs from October 1 to September 30 of the following year). According to Bloomberg's expectations, Apple is expected to achieve revenue of $94.092 billion, adjusted net income of $23.437 billion, and adjusted earnings per share (EPS) of $1.425 billion in Q2022.
Bloomberg analyst Anurag Rana's team believes that Apple Q2's services business growth may be difficult to meet market expectations of 17%, because, based on year-over-year performance and the latest data from Sensor Tower, net revenue from all its applications has only increased by 6%. This revenue directly affects the revenue of the App Store, which accounts for about one-third of the total growth of the services business. In addition, Rana also expects weak iPhone sales in Europe and China, where combined revenue accounts for 43 percent of the iPhone business's total revenue.
Rana also pointed out that due to demand and supply chain problems in China, apple management's performance guidance may not be as positive as in the previous quarter. However, the pace of the company's buybacks should remain strong, which could partially offset the slowdown in revenue growth.
Apple's Q1 results for fiscal 2022 released at the end of January showed that the company's Q1 revenue increased by 11% year-on-year to $123.9 billion, the highest single-quarter revenue ever, and the market expected $119.1 billion; net profit of $34.63 billion, earnings per share of $2.10, both exceeded market expectations.
Wells Fargo analyst Aaron Rakers believes that Apple's Q2 results and outlook guidance for fiscal 2022 will not change much from expectations. The analyst maintained an "overweight" rating on the stock with a price target of $205.
It is reported that the analyst regards Apple's annual return on capital indicator as the most potential positive factor. He estimates apple shipped between $54 million and $58 million iPhones in the first quarter; revenue was between $45 billion and $48 billion. The analyst also reiterated his belief that Apple's M1 chip could push its products to continue to capture more market share.
Second, Microsoft
Microsoft will release its fiscal 2022 Q3 financial report after hours on April 26 (Microsoft's fiscal year is from July 1 to June 30 of the following year). According to Bloomberg's expectations, Microsoft is expected to achieve revenue of $49.043 billion, adjusted net income of $16.498 billion, and adjusted earnings per share of $2.189 billion in fiscal 2022.
Bloomberg analysts pointed out that Microsoft Q3 may report strong cloud computing performance, enough to offset the potential weakness in the personal computer (PC) market, which is affected by factors such as inflation and geopolitical conflicts. In addition, the growth of the Office 365 business may begin to slow. Analysts concluded by noting that Microsoft's operating margin may decline slightly (about 100 basis points) in the quarter, based on factors such as lower gross margins and higher marketing costs.
Microsoft's earnings report in January showed that Q2 revenue increased 20% year-on-year to $51.728 billion, higher than the market's general expectation of $50.3 billion. Diluted earnings per share increased 22% year-over-year to $2.48, also above market expectations of $2.32. Net profit increased 21% year-over-year to $18,765 million.
Wells Fargo analyst Michael Turrin, who remains bullish on Microsoft's long-term development, said he disagreed with any view that Microsoft's peak was over, noting that Microsoft's dominance in the market will continue to provide a broad base for its long-term cross-selling, which is still undervalued. Analysts believe that Microsoft's stock will benefit from a broad shift to digitalization, and the company's platform positioning is particularly favorable in the current trend.
Turrin lowered Microsoft's price target from $425 to $400 and maintained an "overweight" rating on the stock.
Third, Google
Google will release its fiscal 2022 Q1 financial report after hours on April 26. According to Bloomberg's expectations, Google is expected to achieve revenue of $56.257 billion in Q1 2022, an increase of 23.4% year-on-year; adjusted net income of $18.816 billion, an increase of 36% year-on-year; and adjusted earnings per share of $28.593.
Bloomberg analyst Mandeep Singh believes Google will outperform its peers in advertising. Given Google's more diverse business and strength in search engine advertising, Google's total Q1 revenue growth may not slow as sharply as other digital advertising agencies like Meta, Snap or Pinterest, he wrote in the report. In addition, the growth momentum of Google's cloud business is likely to continue to drive the growth of the order backlog, and the revenue growth of the cloud business may be close to 40%. YouTube's advertising revenue growth is also likely to slow somewhat.
Singh also pointed out that the improvement in Google's Q1 operating margin may depend on the cloud business, because the previous 2021 cloud business operating margin was lower, only -16%, far lower than Amazon's AWS and Microsoft's Azure.
Google's Q4 2021 results released in February showed Q4 revenue of $75.325 billion, higher than analysts' expectations of $71.89 billion, up 32% year-on-year; net profit of $20.642 billion, up 36% year-on-year, a record high; and diluted earnings per share of $30.69, higher than expected $27.35, up 37.6% year-on-year.
Credit Suisse analyst Stephen Ju lowered the price target of Google's parent company Alphabet from $3500 to $3450 and maintained a "outperform" rating. The analyst pointed out that from the feedback from advertisers, Google spending has increased due to unfavorable factors caused by Apple's IDFA (privacy policy related).
Fourth, Amazon
Amazon will release its fiscal 2022 Q1 financial report after hours on April 28. According to Bloomberg's expectations, Amazon is expected to achieve revenue of $116.415 billion in Q1 2022, an increase of 2.9% year-on-year; adjusted net income of $6.784 billion, down 40.3% year-on-year; and adjusted earnings per share of $12.568, a decrease of 16.9% year-on-year.
Amazon's Q1 performance may not be ideal. Bloomberg analysts mentioned in the report that Amazon's Q1 revenue is expected to increase by only 2.9% year-on-year, and net profit will fall sharply year-on-year because the performance in the same period last year was too strong. However, the company's year-over-year revenue growth rate is likely to accelerate in the coming quarters. The pandemic and rising labor and transportation costs have impacted the margins of retail operations, but these adverse effects have been offset by higher margins advertising, subscriptions and cloud services.
"We expect cloud growth to reach 36-37 percent at constant exchange rates, which would be somewhat slower than the strong Q4," the analysts wrote, "and the operating margin could be around 31 percent, adding more than $5.5 billion in operating profit to the entire company." ”
Amazon's Q4 2021 net sales in February were $137.412 billion, up 9% year-over-year, and net profit was $14.323 billion, up 98% year-over-year; diluted earnings per share were $27.75, compared to $14.09 in the year-ago quarter.
Previously, Wedbush analyst Michael Pachter gave Amazon a "outperform" rating with a price target of $3950. For Amazon's first-quarter results to be announced on April 28, EST, Pachter expects Amazon's revenue and operating profit to be near the top of the guidance range, driven by rising product prices and strong consumer spending, but higher inflation costs will partially offset this favorable impact.
5. Meta Platforms (Facebook)
Meta Platforms will announce its Q1 financial results for fiscal 2022 after hours on April 27. According to Bloomberg's expectations, Meta is expected to achieve revenue of $28.25 billion, adjusted net income of $7.585 billion, and adjusted earnings per share of $3.125 billion in Q1 2022.
Bloomberg's team of analysts claims that due to the intensification of competition in the social media industry and the reopening after the easing of the epidemic, Meta's short-term revenue growth is difficult to shine, and its Q1 revenue growth is expected to be around 3%.
In addition, although Meta pointed out in Q4 last year that the company's past new products have good monetization capabilities, Bloomberg analysts believe that the situation of Meta short video application Reels will be different because it lacks sufficient differentiation compared with similar software.
Analysts further said Meta's operating profit is likely to continue to be under pressure, considering that reality Labs business lost $3.3 billion in the previous quarter. However, Meta's overall operating performance will improve in the second half of the year, when its difficulties such as advertising crowd targeting will be reduced.
Meta's Q4 earnings report in February showed that its total Q4 revenue was $33.671 billion, up 20% year-on-year. Net profit was $10,285 million, down 8% year-over-year and down for the first time since the second quarter of 2019. Diluted earnings per share were $3.67, compared to $3.88 for the year-ago quarter.
On the Metacostem business, on April 13, Meta announced that its VR social platform Horizon World will take up to 47.5% of the total fee from each virtual asset transaction: including 30% of the "hardware platform fee" from the Meta Quest Store, and the Horizon World platform will charge a 17.5% fee. This means that users have only 52.5% of the benefits left. Last October, Zuckerberg said that the meta-universe business could not be profitable in the short term.
The above is the forward content of this issue's financial report, welcome to talk about your views in the comment area, I wish you all the best in your investment, and see you next week
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