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Nov. 4, 2019, 8:00 a.m. EST

The earnings recession looks destined to continue as Disney and the rookies take stage

Earnings Watch: Peloton and Uber will join health-care companies, videogame publishers and a whole lot of internet stocks

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By Jeremy C. Owens, MarketWatch , Emily Bary


Bloomberg News/Landov
The Disney+ streaming service will launch less than a week after Disney’s fiscal fourth-quarter earnings report, scheduled for Thursday afternoon.

While the departure of October means the quarter is only one-third complete, the quarterly earnings season has already entered the home stretch, and appears certain to lose yet again.

So far, 358 of the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.86%  companies have reported quarterly earnings, more than 70%, and earnings have declined 2.66% from the same quarter a year ago, according to a FactSet tally. It could take a miracle at this point to reverse that trend and avoid prolonging the earnings recession, especially because most of the largest companies, which are larger contributors to the overall numbers, have already reported. Current projections peg this quarter’s decline will eventually be 2.78%.

For more: We are in an earnings recession, and it is expected to get worse

One of the only companies reporting in the coming week with the heft to move those numbers significantly is The Walt Disney Co. /zigman2/quotes/203410047/composite DIS +0.12%  , also the only component of the Dow Jones Industrial Average on the docket. Disney earnings are expected to push the S&P 500 the other way, though, as the company’s bottom line continues to digest assets purchased from Fox Corp. that caused a big profit miss in the previous quarter.

There will be plenty of action outside the S&P 500 as well, especially from some of the youngest entrants on Wall Street. Connected exercise-equipment company Peloton Interactive Inc. /zigman2/quotes/208035743/composite PTON -3.68%  will release its first set of results since going public, and Uber Technologies Inc. /zigman2/quotes/211348248/composite UBER +0.95%  will report results after a rough reaction to rival Lyft Inc. /zigman2/quotes/208999293/composite LYFT -1.60%  

Here’s what to watch for in the week ahead.

Streaming wars

In Disney’s report on Thursday, the fiscal fourth-quarter numbers will likely by less important than any forecast executives, with the launch of the Disney+ streaming service and the premiere of a new Star Wars film scheduled for this quarter.Disney+ doesn’t launch until Nov. 12, but investors will be looking for any early subscriber numbers as well as details on the company’s arrangement with Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ +0.15%  , which promises a free year of Disney+ to customers who pay for the carrier’s unlimited wireless plan as well as new Fios and 5G Home customers. Also of interest will be management’s reaction to Apple Inc.’s /zigman2/quotes/202934861/composite AAPL +0.25%  entrant in the streaming race, which costs $4.99 a month, lower than Disney’s $6.99-a-month offering.

See also: How all the new streaming services compare

Roku Inc. /zigman2/quotes/205087179/composite ROKU -4.21%  , which makes dongles and a platform used for streaming services as well as its own ad-supported streaming channel, has been one of the hottest stocks of the year. The company will report results Wednesday, and investors should look for any expected impact from Apple TV+ — the smartphone giant’s decision to give away the service for free for a year to those who buy new Apple devices, including Apple TVs, was a source of concern for Roku analysts after Apple’s initial announcement.

The rookies

After rough reactions to reports from Lyft and Pinterest Inc. /zigman2/quotes/211319641/composite PINS -2.42%  , other post-IPO companies will take their shot at satisfying their new partners on Wall Street. Peloton executives can hope that earnings will get their stock back on track after a disappointing post-IPO performance, as shares are still trading below their $29 IPO price. Analysts are overwhelmingly upbeat about the company’s potential to gain traction in new markets and verticals, though, and expect a strong outlook indicating that the company expects its exercise equipment and services to sell well in the holiday season.

More on Peloton: Five things to know about the Peloton IPO

Uber’s story is “quickly waning,” according to Wedbush, and the ride-hailing giant will be looking to prove it’s on a healthier trajectory Monday afternoon, just days before the official lock-up period expires. That could lead to “an avalanche of selling” with more than $20 billion in stock on track to hit the market upon expiration.

/zigman2/quotes/210599714/realtime
US : S&P US
3,168.57
+26.94 +0.86%
Volume: 2.22B
Dec. 12, 2019 4:55p
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/zigman2/quotes/203410047/composite
US : U.S.: NYSE
$ 147.76
+0.17 +0.12%
Volume: 7.76M
Dec. 12, 2019 6:30p
P/E Ratio
21.23
Dividend Yield
1.19%
Market Cap
$266.02 billion
Rev. per Employee
$295,532
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/zigman2/quotes/208035743/composite
US : U.S.: Nasdaq
$ 30.85
-1.18 -3.68%
Volume: 6.80M
Dec. 12, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$8.99 billion
Rev. per Employee
N/A
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/zigman2/quotes/211348248/composite
US : U.S.: NYSE
$ 28.69
+0.27 +0.95%
Volume: 23.58M
Dec. 12, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$48.48 billion
Rev. per Employee
N/A
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/zigman2/quotes/208999293/composite
US : U.S.: Nasdaq
$ 46.60
-0.76 -1.60%
Volume: 4.70M
Dec. 12, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$14.10 billion
Rev. per Employee
$450,139
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/zigman2/quotes/204980236/composite
US : U.S.: NYSE
$ 61.17
+0.09 +0.15%
Volume: 8.57M
Dec. 12, 2019 6:30p
P/E Ratio
15.71
Dividend Yield
4.02%
Market Cap
$252.61 billion
Rev. per Employee
$905,626
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 271.46
+0.69 +0.25%
Volume: 34.44M
Dec. 12, 2019 4:15p
P/E Ratio
22.90
Dividend Yield
1.13%
Market Cap
$1203.10 billion
Rev. per Employee
$1.98M
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/zigman2/quotes/205087179/composite
US : U.S.: Nasdaq
$ 139.57
-6.13 -4.21%
Volume: 16.74M
Dec. 12, 2019 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$18.00 billion
Rev. per Employee
$668,322
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/zigman2/quotes/211319641/composite
US : U.S.: NYSE
$ 17.76
-0.44 -2.42%
Volume: 8.86M
Dec. 12, 2019 6:30p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$10.16 billion
Rev. per Employee
N/A
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