Earnings season is starting to wind down and now we are starting to see the later reports and the off-calendar fiscal reporting companies issue their earnings. Still, there are some key earnings reports ahead. Market volatility has prevailed so far in 2014, but that is after huge gains in 2013 of over 26% for the Dow and over 29% for the S&P 500.
24/7 Wall St. has decided to issue earnings previews for what it feels are the top three technology earnings reports for the week ahead. These have full previews for estimates from Thomson Reuters, and valuations and some color has been added on each.
Nuance Communications, Inc. (NASDAQ: NUAN) reports earnings on Monday after the close. The voice recognition software leader is still under pressure from activist Carl Icahn, although less than before. Its estimates are $0.21 in earnings per share and $485.1 million in revenue. Estimates for the quarter ahead are $0.25 in earnings per share and $497.8 million in revenue. At $15.72, the 52-week range is $13.00 to $23.38 and it trades at 14.4-times forward earnings. Nuance shares have been struggling and have been a disappointment to Carl Icahn and many other investors who wanted to invest in the “Siri” theme. The consensus analyst price target is $17.90, although Nuance’s share price was briefly at $30 just two years ago.
Cisco Systems, Inc. (NASDAQ: CSCO) is facing a make or break report after its spoiler report last quarter with its earnings report after the close on Wednesday. The bar has been set low for the networking and communications equipment giant but China and emerging markets remain a challenge. Earnings estimates are $0.46 in earnings per share and $11.03 billion in revenue. Estimates for the quarter ahead are $0.48 in earnings per share and $11.34 billion in revenue. At $22.67, its 52-week range is $19.98 to $26.49 and it trades at 11.5-times forward earnings. Cisco’s consensus price target is down to $23.46 but was closer to $26 before its last earnings debacle. To show how weak this is, the revenue drop is expected to be 9% for the quarter and this is close to the same percentage drop in earnings per share. If Cisco has another weak report and cannot even make the estimate for a 7% drop in revenue in the coming quarter then Cisco could conceivably see its stock under $20 again. Still, Cisco’s stock is up close to 2% so far this year and it has a 3% dividend yield.
Applied Materials Inc. (NASDAQ: AMAT) report on Thursday after the close. The top chip equipment and cap-ex company’s earnings estimates are $0.22 in earnings per share and $2.13 billion in revenue. Estimates for the quarter ahead are $0.27 in earnings per share and $2.32 billion in revenue. We would point out that this is a pinnacle growth quarter as sales would be up 35% or so. At $17.18, the 52-week range is $12.65 to $18.18 and Applied Materials trades at 16-times forward earnings. The consensus price target is $18.62 here, although the median is higher at $19.00 for the stock. Applied Materials’ shares are down close to 3% so far in 2014 and it has a 2.3% dividend yield.
Again, estimate are from Thomson Reuters. We would also make the reminder that estimates may change prior to each report. Watch for more news of the Hewlett-Packard turnaround in the following week, as it reports earnings on February 20.