Earnings This Week: Disney, Coinbase and Rivian

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Josh Warner
By :  ,  Market Analyst

Earnings calendar: August 8 – 11

The US earnings calendar starts to quieten down this week, but there are still plenty of big names pencilled in. Big Data firm Palantir, cryptocurrency trading platform Coinbase, media giant Disney, metaverse and gaming stock Roblox and electric vehicle startup Rivian are the top updates to watch out for.

The UK calendar remains busy with earnings due out from Legal & General and Aviva, investment giant and asset manager abrdn, Chilean copper miner Antofagasta, and food delivery outfit Deliveroo. Gambling outfits Entain and Flutter will also be in focus.

Monday August 8

Softbank Q1

Tyson Foods Q3

Palantir Q2

BioNTech Q2

Kosmos Energy Q2

Clarkson H1

Tuesday August 9

National Australia Bank Q3

GlobalFoundries Q2

Coinbase Q2

abrdn H1

IHG H1

Legal & General H1

Wednesday August 10

Disney Q2

Roblox Q2

Coupang Q2

Aviva H1

Admiral H1

Deliveroo H1

Thursday August 11

Rivian Q2

Antofagasta H1

Coca-Cola HBC H1

Entain H1

Savills H1

Spirax-Sarco H1

Deutsche Telekom Q2

Friday August 12

Flutter H1

 

 

Palantir

Big Data analysis software company Palantir has been caught up in the selloff this year, but company continues to deliver impressive topline growth, remains in the black and has no debt on its balance sheet. Sales to governments are slowing, but this is being countered by a deliberate effort to step-up appeal among businesses. Palantir believes it can thrive in ‘bearish conditions’ as its software proves crucial for customers. Wall Street believes Palantir will have added 30 new customers overall in the period to end the second quarter with 307 on its books, up from 277 at the end of March. Wall Street forecasts Palantir will report a 26% year-on-year rise in revenue in the quarter to $472 million and expect adjusted EPS to drop by 34% to $0.03. You can read more in our Palantir Q2 Earnings Preview.

 

Coinbase

Coinbase reported its first drop in revenue and its first loss on record in the first quarter as it succumbed to the selloff in cryptocurrency markets and lower volatility - and things are set to remain tough in the second. User numbers are forecast to fall for a third consecutive quarter to just 8.4 million at the end of June, down from 9.2 million at the end of March and 11.4 million at the start of 2022. Subdued crypto markets are giving Coinbase the opportunity to launch and improve new products, such as staking and wallets, but things will remain dicey as fears of a crypto winter plague the outlook. Recent results from Robinhood provides some hope Coinbase could impress this week, but for now Wall Street believes revenue will drop 61% and that it will remain deep in the red. A deal with BlackRock to allow institutional investors to trade bitcoin has injected confidence ahead of the results. You can read more in our Coinbase Q2 Earnings Preview.

 

Legal & General

Legal & General is poised to see a slowdown in growth this year following an impressive 2021. While higher interest rates bode well for L&G, the weaker macroeconomic environment will make it more difficult for it to drum up new business. Analysts forecasts L&G will report a 4.1% rise in operating income to £1.12 billion in the first half, while EPS is set to nudge up 4.7% to 19p. Earnings are set to rise thanks to larger contributions from its retirement and capital arms, which will offset a fall from its investment management unit. Commentary on fund management and pension transfers will be watched.

 

Abrdn

Investors will be keeping an eye on net flows and the cost to income ratio when abrdn reports this week. The company is striving to hit a 70% ratio by 2023 but there appears a long way to go as this is forecast to come in at 80.8% in the first half of 2022, while net flows are forecast to come in at minus £14.8 billion, almost three times the £5.6 billion outflow seen the year before. Adjusted operating profit is forecast to fall over 15% from last year to £135.6 million, as income from fee-based services drops over 5% to £714.4 million.

 

Disney

Disney continues to bounce back from the pandemic. Revenue is forecast to rise 23% from last year to $21.0 billion in the third quarter and adjusted EPS is expected to increase 20% to $0.96. The improvement will be mostly driven by the recovery at its theme parks and resorts, although its media and entertainment arm will also contribute. Streaming will be under the spotlight as market-leader Netflix continues to lose subscribers, but Disney+ is expected to have continued to grow, albeit at a slower rate. Disney+ is estimated to have 148.3 million subscribers at the end of the quarter, up from 137.7 million three months earlier. Disney is aiming to have 230 million to 260 million subscribers by 2024 and investors will want to see this goal reiterated, especially after the company lost the rights to the Indian Premium League.

 

Roblox

Roblox has found 2022 difficult as the boom experienced during the pandemic continues to cool off. Wall Street believes Roblox ended June with just under 54 million Daily Active Users (DAUs), down 105,000 from the end of March but still almost 25% higher than the year before. Eyes will remain on the age range of users as Roblox continues to widen appeal to older users. We could also see more commentary on its growing ad business, which may have benefited as more marketing dollars shift away from social media. Bookings are forecast to fall 1.2% from last year to $657.2 million and adjusted Ebitda is expected to plunge over 57% to $71.4 million. Comparatives will only get tougher in the second half of 2022, which could make it difficult for Roblox to impress.

 

Deliveroo

We already know that Deliveroo saw gross transaction value rise 7% in the first half, although a marked slowdown in the second quarter compared to the first places pressure on the outlook. Deliveroo has already become more cautious and said GTV should grow 4% to 12% in 2022, down from its original goal of 15% to 25%. Analysts forecast revenue will be up 6.8% at £985 million in the first half, while the adjusted Ebitda loss is set to swell to £73.3 million from £27 million the year before. Although it has scaled back topline growth expectations, its margin target was reiterated, helping bolster confidence among those investors that want to see a path to profitability as it aims to breakeven by 2024.

 

Rivian

All eyes are on the outlook this week after rival Lucid Group more than halved its production goal for 2022 as supply chain problems continue to bite. Rivian is aiming to produce 25,000 cars this year and this needs to be reiterated to maintain confidence. We already know that production jumped from just 2,553 cars in the first quarter to 4,401 in the second. Wall Street is looking for $337.5 million in revenue in the second quarter. Rivian needs to produce 18,000 cars in the second half to achieve its target. Focus is on supply considering it has over 90,000 net orders on its books, on top of the order from Amazon for 100,000 electric delivery vans (EDVs), although it is prioritising its R1S and R1T models over EDVs while capacity remains tight. Still, pre-order growth will be watched to see if recent price hikes have softened demand in recent months.

 

Antofagasta

Expect a steep drop in profits when Antofagasta releases results this week as lower production, higher costs and a fall in copper prices all weigh on the bottom-line. We know production fell 6.5% from the year before and that cash costs averaged $1.82 per pound, up from $1.14 the year before. Copper prices sat at multi-year highs in the first half of 2021, but have dramatically dropped since April 2022. The outcome is expected to be a 30% drop in first half revenue to $2.5 billion in the first half, while pretax profit is expected to drop 49% to $907.5 million. Antofagasta moved into a net cash position in late 2021 but could slip back to net debt if cashflow comes under pressure, which in turn could hold back any special returns in the second half of 2022.

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