The earnings season will continue this week as some big names in the technology will report results including Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) Facebook (NASDAQ: FB) and Twitter . For all three companies, a lot is at stake. Over the past 12 months, they have outperformed the market, with Alphabet and Facebook up 21% and 28% respectively, and Twitter a staggering 116%.
A short preview follows before the earnings reports of these companies.
Alphabet: Can "Google other" grow massively again?
Alphabet, Google's parent company, will launch the Q2 update next week after the market closed on Monday. Following solid sales growth of 26% year-on-year (currency-neutral growth of 23%), investors will seek greater growth in the second quarter. Analysts predict that alphabets will grow by 24% in the second quarter compared to the previous year. For Alphabet's earnings per share, analysts expect $ 9.59, compared to $ 8.90 in the year-ago quarter, when the impact of a fine imposed by the European Commission during that period was disregarded.
Investors should closely monitor the Google "Alphabet" Google segment, which includes revenue from the cloud, hardware, and the Android App Store. Although the segment accounted for only 14% of sales in the first quarter, strong growth of 36% year-on-year was key to Alphabet's overall growth. Can Google continue to grow others at this high rate?
Facebook: Will higher spending impact profit growth?
After the close on Wednesday, investors expect a monstrous growth as usual. On average, analysts expect sales to increase by around 44% over the previous year – a cautious outlook, considering that Facebook's revenue increased 47% in the first quarter of 2018 and 49% in the first quarter of 2018.
The big question for Facebook is how much the earnings per share of the social network has increased. In the past, Facebook has consistently seen its earnings per share grow on top of its revenue growth, as revenue has risen faster than operating expenses. However, with Facebook expected to increase operating expenses to 50-60% for the full year, second-quarter Earnings per share growth could slow significantly. Analysts expect Facebook to post 30% earnings per share in the second quarter compared to the same quarter last year, following a 63% increase in the first quarter.
Twitter: Can it maintain a strong momentum?
After Returning to Revenue Growth and Swinging For the first time a few quarters ago, Twitter must prove its positive momentum will continue.
For the second quarter of Twitter, according to consensus analysts, annual sales growth of 21% and non-GAAP EPS of 0.17 US dollar compared to non-GAAP EPS of $ 0.08 in the year-ago quarter. 19659005] One key area that Twitter investors should be aware of is the daily active user growth of the company. While the company's six consecutive quarters are notable for double-digit annual growth in daily active users, the index has slowed for the last three quarters. Twitter's daily active users grew 10% in the first quarter, up from 14% in the third quarter of 2017. Should the daily growth of active users in Twitter continue to weaken, this could only mean a temporary, momentary increase in metrics.
Twitter will release its second-quarter results ahead of market launch on Friday, July 27.
Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. Daniel Sparks has no position in any of these stocks. The Motley Fool owns shares of and recommends Alphabet (A-shares), Alphabet (C-shares) and Facebook. The Motley Fool has a disclosure policy.