The first earnings season of the year is set to continue in full force this week as some of the biggest names in the American tech industry reveal how they fared. On the heels of widespread stock volatility, all eyes will be on Microsoft, Tesla, and Intel this week as they release quarterly reports.
One of the most venerable firms in tech, Microsoft (MSFT), is expected to release its Q2 2023 report tomorrow, January 24th, after market close. Investors may be feeling trepidation ahead of tomorrow’s release given the over $700 billion in value the firm lost over the course of 2022. Microsoft’s share price tumbled by 28% during the year.
Microsoft seems to be suffering from a post-pandemic hangover as firms and consumers alike tighten their belts; demand for the company’s Azure cloud computing could be revealed to have trended downward towards the close of 2022. Accordingly, it may have come as no surprise that Microsoft executives recently announced layoffs reaching into the five figures.
However, some analysts seem to be optimistic regarding tomorrow’s upcoming release. Microsoft has been refocusing investment into the developing field of artificial intelligence, which could provide some upward momentum for the firm’s bottom line. Estimates for Q2 2023 are for earnings per share to come in around $2.31 on total revenue of just under $53 billion. (Source:Forbes)
Tesla Hits the Brakes
In recent months, much market sentiment regarding electric vehicle giant Tesla’s (TSLA) prospects has surrounded Elon Musk’s controversial takeover of Twitter. Some have even gone so far as to characterise the knock-on effects of Musk’s $44 billion acquisition deal as a ‘nightmare’ for Tesla.
Tesla is set to release Q4 2022 results on Wednesday, January 25th, after the ring of the closing bell. Fourth-quarter figures are likely to be influenced by the economic slowdown in China’s major manufacturing centres due to COVID-19 lockdowns, as well as drops in demand for new vehicles.
Tesla stock dropped by a whopping 65% over the course of 2022, and vehicle deliveries came in at 405,000 for the final quarter of last year, representing year-over-year growth of 40%, lower than Elon Musk’s stated goal of 50%. Whether estimates of an earnings per share figure of $1.13 on revenue of $24.9 billion are borne out on Wednesday remains to be seen; whether confidence in Tesla stock on New York’s trading floors can be restored is still up in the air.
Clouds may be hanging over Intel’s (INTC) upcoming Thursday afternoon Q4 2022 earnings release following a 48% loss of share price in 2022. Demand for personal computers experienced an unprecedented droop over the past year, and investors may be looking to see how drastically this has affected Intel’s core business.
This firm, like many of its industry peers, has had to resort to layoffs and other cost-cutting measures, expected to reach $3 billion in 2023, in order to bring overhead down in the face of an adverse business climate. One major factor affecting Intel going forward will be whether its data centre business line can restore consumer confidence, but how markets will react to an expected earnings per share figure of 20 cents on revenue of just under $14.5 billion is as yet unclear.
The final three months of 2022 were challenging for a variety of sectors of the American economy, and tech was no exception. Whether this trend will be broken as earnings season continues is unknown.