ON, SBUX, PYPL, ABNB: Earnings Preview

By Duncan Ferris

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A busy week ahead will see earnings updates from the likes of ON Semiconductor Corp (NASDAQ: ON), Starbucks (NASDAQ: SBUX), PayPal Holdings (NASDAQ: PYPL) and Airbnb (NASDAQ: ABNB).

Earnings season is in full swing, with last week having seen updates from big hitters in oil and gas posting huge profits as the benefitted from skyrocketing prices. Additionally, major outfits like Tesla, Amazon and Apple also offered updates.

The fun is far from over though, with a lot to look forward to over the coming days. These are some of the biggest earnings updates for the week ahead:

ON Semiconductor Corp (NASDAQ: ON)

This Phoenix-based semiconductor manufacturer is set to report its earnings after US Congress passed legislation that will see American chipmakers subsidised. With multiple production centres across the US, the company could be a beneficiary of this policy, giving it an edge on foreign competition. 

However, news is not all rosy for chipmakers. Last week, Intel saw its share price stumble after the company’s earnings missed expectations and cut its outlook. The company cautioned that it had seen a “sudden and rapid decline in economic activity”.

This potential downturn in demand for computers and other technology could be damaging for other chipmakers like ON Semiconductor Corp, so investors should look out for any indication of similar issues. The company’s earnings are on track for release on Monday.

Starbucks (NASDAQ: SBUX)

Starbucks’ earnings are on the horizon this week with the coffeehouse chain in a potentially awkward position.

That’s because, despite record earnings earlier in 2022, the business has been scrapping with an unhappy workforce. Some employees have formed unions and this July saw workers from Seattle, Boston, Pittsburgh, Detroit and more striking due to poor working conditions.

A letter to employees from CEO Howard Schultz on 11 July included an acknowledgement that the business “is not set up to fully satisfy the evolving behaviours, needs and expectations of our partners or customers”.

Schultz added:   

“Today, we find ourselves in a position where we must modernize and transform the Starbucks experience in our stores and recreate an environment that is relevant, welcoming and safe, and where we uplift one another with dignity, respect and kindness. We need to reinvent Starbucks for the future. And to be successful, it will take our collective courage to begin again.” 

As such, the upcoming earnings release could shed some light on how the business plans to change going forwards.

Additionally, reports from The Times suggest the company is looking to offload its UK business amid high competition and rising costs. There are around 1,000 Starbucks locations in the UK, though around 70% of these are franchises.

Investors should look out for SBUX earnings update after trading concludes on Tuesday.

PayPal Holdings (NASDAQ: PYPL)

This stock has enjoyed a bump in price over recent sessions after reports that activist investor Elliott Investment Management is building a stake in the business, potentially with a view to pushing further cost-cutting initiatives.

The company has already sought to make annual savings of around $260m by cutting employee numbers earlier in 2022. Investors should look out for impact of these measures and hints of further savings efforts.

PayPal’s earnings are set for release on Tuesday evening.

Airbnb (NASDAQ: ABNB)

The second quarter is a key period for vacation rental specialists Airbnb, with the holiday season getting into full swing after a couple of years of disruption.

The business fared better than many of its competitors through the pandemic, switching its focus to providing users with options for hosting or pursuing so-called ‘staycations’ as travel restrictions disrupted international tourism.

For the second quarter, the company said it expected to deliver: 

  • Revenue between $2.03bn and $2.13bn.

  • Low double-digit EBITDA margin percentage improvement.

  • Continued reduction in per-unit variable costs.

If you want to see if Airbnb meets these second quarter goals, the company’s update is currently slated for release after the close of trading on Tuesday.

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Topics:
Quarterly Earnings
Semiconductors and Semiconductor Equipment
Hotels, Resorts and Cruise Lines
Restaurants
IT Services
Industries:
Information Technology
Consumer Discretionary
Companies:
ON Semiconductor
Starbucks
Paypal
Airbnb

Author: Duncan Ferris

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Duncan Ferris does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Duncan Ferris has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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