Earnings Fever Shifts Focus to Tech Titans

By Billy Fisher | July 12, 2011 AAA

Next week some of the most prominent names in the technology space will weigh in with their quarterly results. For the most part, profits should be better than this time last year and top line results should trend upwards as well. Here is what to expect when these four technology companies announce earnings next week. (To learn more about the technology industry, check out A Primer On Investing In The Tech Industry.)

TUTORIAL: Earnings Quality

An Apple A Day
Perhaps the most anticipated release of the entire earnings season will come on Tuesday after the market close when Apple (Nasdaq:AAPL) reports its fiscal Q3 results. The consensus among analysts is that the company will report a 62.4% surge in EPS on a 57.3% climb in total sales when compared to Apple's year-ago quarter.

The company is coming off of a record Q2 in which 59% of its total revenue was derived from overseas. Apple sold more than twice as many iPhones in the quarter as it did in Q2 of 2010. The company also sold 28% more Macs. Shares of Apple have risen over 10% so far this year.

Intel's Expectations
After the market close on Wednesday, the semiconductor giant Intel (Nasdaq:INTC) will announce its Q2 earnings. Wall Street is calling for the company to check in with EPS of 51 cents just as it did in the prior year quarter. Total revenue is expected to jump by 19.1%. Intel has seen its stock price gain around 8% year-to-date. (To help profit from quarterly results, read Strategies For Quarterly Earnings Season.)

Searching for Profits
When Yahoo (Nasdaq:YHOO) reports its Q2 results after the market close on Tuesday, EPS are expected to rise 20.0% on a year-over-year basis despite a slight downtick in total revenue. It would not be a huge surprise if the company were to slightly top these estimates as it has beat out the expectations of analysts in each of the last four quarters.

Yahoo's CEO, Carol Bartz, has taken a lot of flak from shareholders for the lackluster showing of the company's stock price in recent years. Fortunately, the Yahoo board recently gave her a vote of confidence in an effort to steady the ship and bring the focus to the company's financial performance. Shares of YHOO have shed over 10% of their value so far this year.

Switching from a prominent search engine at home to one overseas, Baidu (Nasdaq:BIDU) will be reporting its quarterly results at the tail end of next week. Wall Street is calling for the company to come in with an 88.6% surge in quarterly EPS on a 77.8% ascent in total revenue. Shares of BIDU have jumped around 47% since the beginning of the year.

The Bottom Line
Investors in some of the most closely followed technology names will have their moment of truth next week when earnings are announced. Revenue should be up significantly in many instances and profits should continue to grow from this time last year as well. With expectations already set high, these companies will really need to knock the cover off the ball to impress the market and put a charge into their stock prices. (To understand how important earnings are to stock prices, read Earnings Power Drives Stocks.)

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