Priceline, Nvidia before earnings

What to expect from the results of these 2 companies.

By Stock Traders Daily May 8, 2013 11:31AM

Stock market report © CorbisPriceline (PCLN) and Nvidia (NVDA) are reporting earnings Thursday. The observations below can help investors anticipate results from these companies before the earnings are released.


However, the share-price action after the results are released is not always correlated with the meet-or-beat comparisons that the Street often considers a gauge of success.


First, Priceline's earnings trend has been very cyclical. Every year, earnings have peaked in the third quarter and bottomed in the first quarter. Therefore, our observations tell us to expect earnings to be lower in this reporting cycle than they were in the previous quarter. But if history repeats itself, the following two quarters are likely to be quite strong.


The guidance for Priceline will be key because analysts will want to know what the company expects in the following two quarters, which is when the company shines, and they will reasonably discount the results from this quarter, which is the worst on average annually for the company. Therefore, forward expectations are incredibly important this time. Analysts will need to see forward guidance for second quarter well above $7.85 per share.

 

 

As for Nvidia, the company has started to make progress again beginning in the first quarter of 2012 after experiencing quite a terrible previous few years. Unfortunately, the company has a history of experiencing a series of quarters of revenue declines in a row. This has happened a few times already, and the third quarter of 2012 seems to have been a peak in revenues as well. The fourth quarter results were already lower than the third quarter, and that means this quarter's results could easily be below the previous quarter.


Based on our observations of historical patterns for earnings and revenue at Nvidia's, we expect them to contract again this quarter. Nvidia could also experience flatline revenue growth for the year. The patterns here are more sporadic than cyclical, and that is a concern.

A more accurate assessment of price action is better covered in the real time trading reports for these companies, which are also provided by Stock Traders Daily.
Tags: NVDAPCLN
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