3 tech stocks to watch this earnings season

By Tuesday next week, Google, Netflix and Apple would have reported results. Here's what to expect.

By Benzinga Jul 15, 2013 11:31AM

Dollar sign on keyboard © CorbisBy Louis Bedigian


The whole world will be watching when Apple (AAPL) reports its third fiscal quarter results on Tuesday, July 23.


While the company disappointed some investors during the previous earnings period, Apple set new standards during the second quarter with iPhone sales that reached 37.4 million units.


The Mac maker also sold 19.5 million iPads during the second fiscal quarter, outpacing the 11.8 million units that were sold during the year-ago period.


Apple is not the only company that will report over the next few weeks. There are a number of significant tech stocks that investors should keep an eye on.


Netflix

The streaming video giant will report its second quarter results on Monday, July 22.

With so much money being spent to acquire content, investors will be mostly looking for an increase in Netflix (NFLX) subscribers.


According to VentureBeat, Netflix managers have stated that the company does not plan to increase revenue by raising its rates again. Thus, it is imperative that the overall number of subscribers continue to increase.


While the company took a hit in 2011 (after announcing the last price increase), Netflix has been growing fairly steadily ever since.


In the first quarter alone, Netflix added 3 million subscribers. Two million of those were domestic.


Netflix had a total of 36 million subscribers when it published its last earnings release. It could have millions more this quarter.


Piper Jaffray estimates that Netflix will post revenue of $1.06 billion and earning per share (EPS) of $0.43 for the June quarter. This is a solid improvement over the year-ago period, when Netflix reported $889 million in revenue and EPS of $0.10.


Google

When Google (GOOG) reported its first quarter results, CEO Larry Page made an impressive announcement.


"We had a very strong start to 2013, with $14.0 billion in revenue, up 31% year-on-year," he said in the earnings release.


Since that announcement on April 18, shares of Google have risen nearly 15%.


The company is expected to post record-breaking results again this quarter when it reports Thursday, July 18. Unfortunately, they could still fall below the lofty expectations of some analysts.


Regardless, Google is still one of the hottest stocks in technology, up more than 61% over the last 12 months.


"We are modeling consolidated revenue and non-GAAP EPS of $14.35bn and $10.36, versus consensus of $14.45bn and $10.79," Goldman Sachs wrote in a report. "We are forecasting Google stand alone revenue of $13.32bn (+2% qoq and +16% yoy), in line with consensus. For Motorola, we are modeling $1.03bn versus consensus of $1.06bn. We are forecasting non-GAAP operating margins of 29.7% versus consensus of 30.0%."


Google posted revenues of $12.21 billion and EPS of $10.12 during the second quarter of 2012.


Apple

Will Apple (AAPL) ever have another record-breaking quarter that is impressive enough to silence the company's biggest critics?


That seems unlikely, especially now that some analysts have applied their pessimistic outlook to Samsung (SSNLF).


"It's hard because the entire market has a real saturation problem," James Faucette, Senior Research Analyst of Mobile and Payments Technologies at Pacific Crest, told Benzinga. "If you look at Samsung -- Samsung put out disappointing results. HTC put out disappointing results."


"We don't know what Nokia (NOK) did in the second quarter yet but their first quarter was disappointing," Faucette added.


Having sold so a record-breaking number of iPhones and iPads in the March quarter, it will be interesting to see if Apple can continue the trend when it reports its third fiscal quarter results on Tuesday, July 23.


ABG Sundal currently estimates that Apple will post quarterly revenue of $34.6 billion. This is not only lower than the year-ago period -- it would be the lowest quarter Apple has had in nearly two years.


This would also weigh on the company's EPS, which is expected to fall to $7.10.


During the third fiscal quarter in 2012, Apple posted revenue of $35 billion and a net profit of $8.8 billion, or $9.32 per share.


Canaccord Genuity estimates that Apple will earn $34.59 billion in revenue during the fiscal third quarter this year. The researcher's fourth quarter outlook of $37.86 billion is not much better.


"We expect an in line CQ2 but light CQ3 guidance," Jefferies wrote in a July 11 report. "We shift 1M of iPhone shipments from our CQ3 estimate to CQ2 due the timing of Apple's channel inventory adjustments. We estimate iPhone channel inventories fall by 2M in CQ2 and are flat in CQ3 with sell-through of 28M in CQ2 and 26M in CQ3 leading to shipments of 26M each Q."


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