Apple, Microsoft, Alphabet Lined Up to Report, Futures Lower

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Principal Points

• Tech giants Apple, Microsoft, and Google’s Alphabet report earnings after the bell
• US futures on Tuesday hover moderately lower

It’s the busiest week of the earnings season and a hefty dose of tech heavyweights are slated to present their financial reports on Tuesday. Apple and Microsoft, respectively the first and second most valuable companies in the US, will publish their quarterly performance, along with Google-parent Alphabet.

Apple, valued at nearly $2.5tn, posted a profit for the quarter ended March that blew past expectations. The iPhone maker reported a profit of $23.6bn as revenue rose 56% to $89.6bn, far exceeding Wall Street estimates.

For the last quarter, analysts expect Apple’s hot streak to continue, however, with a slight pullback in revenue which is projected to land at $73.3bn.

Meanwhile, Microsoft CEO Satya Nadella said during the release of the first-quarter earnings results the “digital adoption curves” in a post-pandemic world are “not slowing down”. “They’re accelerating, and it’s just the beginning.”

Microsoft, commanding a market capitalization of $2.20tn, is expected to deliver a 16% increase in sales from a year earlier. If the forecast is correct, the software company would post revenue of $44.13bn.

Google’s parent, Alphabet, delivered a record sales number for the first quarter of the year, $55.31bn, an increase of 34% on an annual basis. This quarter, analysts expect an even higher number, buoyed by higher digital ad spending. Second-quarter sales figures are projected to land at $56.19bn.

All three companies report corporate earnings for the second quarter after the closing bell of the market session in New York.

Futures tied to the main indexes indicate a loss at the opening later today. Dow futures were lower by about 175 points, while S&P500 futures and Nasdaq futures were lower by 0.40%, and 0.25%, respectively.

The stock market, meanwhile, is sitting at all-time highs as investors place high hopes for the upcoming earnings reports by the biggest technology companies this week. All three US stock gauges ended Monday trading at records, extending their record-breaking rally to a second straight day.

The Dow Jones Industrial Average, the S&P500, and the Nasdaq Composite, all pushed higher and finished yesterday’s session in positive territory to fresh record closings

Tesla Records Almost Double Earnings

Electric-car maker Tesla reported record second-quarter earnings figures after the bell on Monday. Despite global chip shortage and supply chain problems, the Silicon Valley automaker reported revenue of roughly $12bn, almost double the year-ago quarter. Profit for the last quarter arrived at $1.1bn, marking its eighth straight profitable quarter.

Tesla also reported a $23m impairment on its bitcoin holdings. The company poured $1.5bn in the leading digital asset in the first quarter and then sold some of it shortly after. The second-quarter bitcoin holdings for Tesla were valued at $1.31bn, down from $1.33bn in the prior quarter.

European bouses on Tuesday are trading moderately lower. The Stoxx Europe 600 has pulled back from its Friday record this week as investors are cautiously optimistic to hold the risky European assets. The region-wide stock index is trading to the downside by about 1%.

In cryptocurrency action, bitcoin is trading relatively subdued and off its Monday highs. The digital currency is now hovering slightly above $37,000, essentially flat on the day. Ether, the second-biggest crypto-token, is also under pressure on Tuesday. Following a 5% gain yesterday, the Ethereum coin is trading about 2.5% lower on Tuesday.