UBS, Cisco, Walmart & Alibaba Earnings: What to Expect

Stock traders and investors may want to monitor this week’s earnings reports from leading companies to gauge the economy's performance and the companies’ respective sectors' performance in light of economic uncertainties, geopolitical tensions, and inflationary pressures.

Here’s what you need to know about some of August 2024’s earnings reports:

UBS Group AG: What Can this Reveal about the Financial Sector?

Swiss investment and financial services company UBS Group AG (UBSG.VX) is expected to report Q2 earnings on Wednesday, 14 August, before the market opens.

According to Wall Street analysts, the company, which, since the start of 2024, has gained only 0.1%, is projected to report the following:

• A Q2 EPS of $0.29, below last year’s quarterly EPS of $8.9.

• Revenues of $11.23 billion, marking a YoY.

Among the factors that could influence UBS’ earnings performance are its Credit Suisse acquisition and the company's reduction in risk-weighted assets (RWA) by $20 billion. Still, only time will tell how this financial services giant will fare.

Cisco: Can AI Boost the Company’s Stock?

Cisco Systems (CSCO), the American digital communications company, is also poised to release earnings on Wednesday, 14 August. The company will report its earnings for the first time since it was reported to lay off about 4,000 workers. The results, which are set to be released after market close, are expected to reveal the following:

• EPS to come in at $0.85 for Q4 2024 (marking a 25% YoY drop).

• Revenues to come in at $13.53 billion (below last year’s $15.2 billion).

The company’s expected performance is believed to have resulted from weaker networking sales and lower demand for telecom and cable service providers.

Beyond this, some analysts may be looking for signs of how and when AI demand could boost the company’s businesses, especially because Cisco was “ranked among the top five vendors cited as a recipient of an incremental share of Generative AI spending in 2024.”

Interestingly, Cisco has lost about 11.2% since the start of the year, and it will be worth tracking any price changes following tomorrow’s release.

Walmart: Are Consumers Spending?

American retail behemoth Walmart (WMT) is scheduled to report earnings on Thursday, August 15th, before the bell rings. This year, Walmart has actually gained 29.3% despite the looming economic uncertainties, fears of a potential recession, unexpected changes in the US elections, geopolitical tensions, and high inflation.

Accordingly, this positive performance is expected to be reflected in the upcoming earnings report as the company’s eCommerce sales grew 21% YoY, and its profitability “has improved nicely over recent periods amid cost efficiencies that have led to margin expansion.” The company is also believed to have benefited from “consistent demand among lower-end consumers.”

Walmart is, therefore, expected to show the following:

• Revenues to reach $168.43 billion (a 4.2% rise from the previous year).

• EPS to be 65 cents per share (a 6.6% rise from the previous year’s quarter).

Will the retail titan adhere to the positive expectations? Traders will have to wait and see.

Alibaba: Are Cloud Efforts Paying Off?

Chinese multinational tech leader Alibaba (BABA) is set to report earnings on Thursday, 15 August. The tech giant gained about 8.3% since the beginning of the year.

Like many tech companies, Alibaba seems to have enjoyed the rising demand for AI and has invested heavily in it, integrating it into its services and advancing its cloud infrastructure. Still, the company’s “cash-generating abilities have taken a hit.” For example, free cash flow dropped by 50% YoY. 

Here are the projections:

• Revenues are expected to reach $34.98 billion (an 8.2% rise from last year’s figures).

• EPS is expected to be $2.20 (an 8.3% drop from the year before the quarter).

Only time will reveal what lies ahead for this tech giant. (Source: Yahoo Finance)

Conclusion

This week’s earnings releases are set to be eventful, with companies from various sectors reporting how they’ve fared in the recent quarter. What will the results show about the economy and the financial markets?