After markets closed on Tuesday, Netflix reported March-quarter results that beat the consensus earnings estimate but missed on revenue. The really bad news was a net loss of 200,000 subscribers, miles away from analysts’ estimate for a net gain of 2.5 million new subscribers. The company also forecast a net loss of 2 million subscribers in the second quarter. The stock traded down more than 27% in Wednesday’s premarket session.
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IBM beat analysts’ estimates on both the top and bottom lines Tuesday afternoon, and shares traded up about 1.9% Wednesday morning. Chip manufacturing equipment maker ASML also beat top-line and bottom-line estimates early Wednesday and guided second-quarter revenue below existing estimates, while reaffirming full-year guidance for revenue of €22.3 billion (up 20% year over year). Shares traded up 6% in Wednesday’s premarket.

Abbott Labs beat estimates on both the top and bottom lines Wednesday morning and reaffirmed fiscal 2022 guidance. Investors might be wondering about future sales of its COVID-19 test kits, which accounted for $3.3 billion in quarterly sales. The stock traded down about 2% in premarket trading Wednesday. Baker Hughes missed both the consensus earnings and revenue estimates. The stock traded down about 2%.

Procter & Gamble beat both earnings and revenue expectations and issued guidance that puts consensus estimates near the low end of the company’s forecast ranges. Shares traded 1% higher in the premarket session.

After markets close Wednesday afternoon, Alcoa, CSX, Kinder Morgan, Tesla and United Airlines will be among the host of companies reporting. We also have previewed four firms set to report results before markets open Thursday morning: American Airlines, AT&T, Freeport-McMoRan and NextEra Energy.

Here is a look at what to expect from three companies when they report results late Thursday or early Friday.

FirstEnergy

Shares of regulated electricity company FirstEnergy Corp. (NYSE: FE) have risen by about 38.5% over the past 12 months. Out of a dozen electricity generators we watch, that is the second-best stock performance over the past year. The company reports first-quarter results after markets close Thursday.
That growth has brought the stock back to its level in February of 2020, just before news broke of bribery and money laundering charges were filed against the company in federal court. Last summer the company admitted to a $60 million payment to a state politician and $4.3 million to a former public utilities commission chairperson. Earlier this year, the Federal Energy Regulatory Commission (FERC) reported that the company paid $71 million to a dark-money fund to support legislation that would have benefitted FirstEnergy to the tune of $1.3 billion. The company is contesting the new charges.
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Of the 17 ratings on FirstEnergy stock, nine are Buy or Strong Buy, while seven analysts rate the stock at Hold. At a recent price of around $47.50 a share, the stock had surpassed its median price target of $46.00. At the high price target of $50.00, the implied gain is 5.3%.

First-quarter revenue is forecast to come in at $2.85 billion, which would be up about 7.1% sequentially and 4.4% higher year over year. Adjusted earnings per share (EPS) are forecast at $0.61, up 20% sequentially but down 11.6% year over year. For the full 2022 fiscal year, current estimates call for EPS of $2.42, down 7%, on sales of $11.53 billion, up 3.6%.

FirstEnergy shares trade at 19.7 times expected 2022 EPS, 18.5 times estimated 2023 earnings of $2.57 and 17.2 times estimated 2024 earnings of $2.76 per share. The stock’s 52-week trading range is $35.42 to $47.99. The company pays an annual dividend of $1.56 (yield of 3.28%). Total shareholder return over the past 12 months was 38.1%. Nearly 200 ETFs own 19% of FirstEnergy’s stock and the stock trades about 3 million shares a day.

Regions Financial

Regions Financial Corp. (NYSE: RF) stock added about 5.4% to its value over the past year. The bank closed its acquisition of M&A firm Clearsight Advisors in late December, and first-quarter results will reflect the effect of that deal. Regions will report quarterly results first thing Friday morning.

A wave of consolidation in banking has led to a federal review of bank mergers and acquisitions that are expected to lead to tighter rules and more regulatory scrutiny. Regions’ tangible book value to price ratio at the end of the prior quarter was about 1.8 times, and the bank was mentioned in reports last year as a potential takeover target.
Of the 26 analysts covering the bank, 15 have given the stock a Buy or Strong Buy rating, and 10 more rate the shares at Hold. At a share price of around $21.70, the upside potential to a median price target of $25.50 is 17.5%. At the high price target of $30.00, the upside potential is 38.2%.
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Analysts expect Regions to post first-quarter revenue of $1.62 billion, down about 1.1% sequentially and flat year over year. Adjusted EPS are forecast at $0.47, up 7.5% sequentially but down by 26.6% year over year. For full fiscal 2022, Regions is expected to report revenue of $6.77 billion, up 4.4%, and EPS of $2.12, down 15.8%.

The stock trades at around 10.2 times expected 2021 EPS, 9.3 times estimated 2023 EPS of $2.34 and 9.1 times estimated 2024 earnings of $2.39. The stock’s 52-week range is $18.02 to $25.57. The bank pays an annual dividend of $0.65 (yield of 3.14%). Total shareholder return for the past year was nearly 7%.

Snap

Earlier this week, Snap Inc. (NYSE: SNAP) unveiled its latest generation of Spectacles, the company’s augmented reality smart glasses. The company has not specified a release date or a price for the new Specs, but the company did say that spatial computing devices such Spectacles will replace smartphones in five to 10 years.

In the here and now, investors are going to want to see how the company’s Snapchat social media platform stacks up against TikTok. The outlook is not particularly happy. According to a report published last week, TikTok’s ad revenue is expected to reach $11 billion this year, more than Snap and Twitter combined. Snap reports results after markets close Thursday.

Analysts are solidly bullish, with 32 of 41 giving the stock a Buy or Strong Buy rating and nine with a Hold rating on the shares. At a share price of around $33.60, the upside potential based on a median price target of $53.00 is nearly 57.7%. At the high price target of $88.00, the upside potential is 162%.

First-quarter revenue is forecast at $1.07 billion, down 17.6% sequentially and up 39% year over year. Adjusted EPS are forecast at $0.01, down 97% sequentially and up a penny year over year. For the full 2022 fiscal year, consensus estimates call for EPS of $0.53, up 6%, on sales of $5.66 billion, up 37.4%.

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Snap stock trades at 63.0 times expected 2022 EPS, 32.2 times estimated 2023 earnings of $1.04 and 19.2 times estimated 2024 earnings of $1.75 per share. The stock’s 52-week range is $24.32 to $83.34. Snap does not pay a dividend and total shareholder return for the past year was negative 44.4%.

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