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Apple, Tesla and Facebook are ready to report record sales in the busiest earnings week

U.S. companies have barely managed to smooth out positive earnings growth so far this quarterly earnings season, but the big test arrives in the coming week.

Nearly a quarter of the S&P 500 SPX
is set to report results where those companies represent 39% of the index at market value according to calculations based on FactSet data. Given that the S&P 500 is weighted by market value, this list of companies will have an oversized impact on the index’s profits.

Earnings are expected to fall for the fourth consecutive quarter, when all results are in the most recent period, but the companies that have reported so far have beaten expectations overall.

The FactSet consensus now models a 5% drop in earnings for the index compared to the expected drop of 6.3% a week ago. If profit growth for the S&P 500 ultimately ends up being positive, it will mark an end to the current earnings recession that occurs when corporate profits fall in two or more consecutive quarters.

Apple Inc. AAPL
and Facebook Inc. FB
is among the highlights of next week̵

7;s slate along with TESla Inc. TSLA,
which will deliver results for the first time since becoming a member of the S&P 500. All three high-profile companies are scheduled to report Wednesday afternoon and are expected to have produced record revenue in the holiday quarter.

The holiday quarter is always crucial for Apple, which releases new iPhones in the fall. With a slightly later launch than usual this year due to the pandemic pushing sales into the period, Apple is generally expected to have its largest quarterly revenue ever and its first ever total of over $ 100 billion. The technology giant is also likely to continue to see benefits from teleworking and distance learning trends, which have driven strong sales of the iPad and Mac throughout the COVID-19 crisis.

Full preview: Get ready for Apple’s first quarter of $ 100 billion in history

Facebook is also expected to post what should easily be a record quarter given strong digital advertising trends over the holiday season. Still, the company will face issues of user engagement and a decision to ban Donald Trump from the platform indefinitely over his role in inciting the violent uprising in the U.S. capital. Bernstein analyst Mark Shmulik points to “continued use fatigue” across social media as well as a “conversation skewed toward non-monetizable political events.”

Full preview: Facebook earnings are still booming amid pandemic, economic downturn and monopoly control

Tesla already announced full-year delivery numbers ahead of analysts’ expectations, and all eyes will be on the company’s outlook for 2021. RBC Capital Markets analyst Joseph Spak expects a delivery forecast of 825,000 to 875,000 million units for the full year, though CEO Elon Musk said on Tesla’s last earnings call that an analyst was “not far off” to expect 840,000 to one million deliveries by 2021.

Full preview: Can Tesla’s sales growth match the stock’s rise?

Here’s what else to look for in the coming week, which brings reports from 117 members of the S&P 500 and 13 Dow Jones Industrial Average DJIA

Up in the air

Boeing Co.’s BA
the journey remains turbulent, even as the company’s 737-MAX jet was certified after being grounded for nearly two years. Although the company began supplying these aircraft, “the pace of delivery of all 450 parked 737-MAXs will be dictated by the airlines’ ability to absorb aircraft as well as demand for air traffic,” according to analyst Josh Sullivan of the Benchmark Company.

Boeing’s Wednesday morning report will provide perspective on the company’s recovery expectations in the midst of the pandemic, although Sullivan sees volatility ahead as a result of a recent share offering and the impact of the COVID-19 crisis on airlines.

Reports from Q4 from US airlines have so far been dismal and American Airlines Group Inc. EEL
and Southwest Airlines Co. LUV
offer more Thursday morning.

Can you hear me now?

Verizon Communications Inc. VZ
leads a busy week of telecommunications earnings Tuesday morning followed by AT&T Inc. T
Wednesday morning and Comcast Corp. CMCSA
Thursday morning.

For the wireless operators, a key issue will be the effect of iPhone 12 campaigns on the latest results. Investors will also be looking for information on a recent spectrum of wireless auction offerings that will be crucial to the implementation of 5G networks. Although the bids have not yet been announced, the auction ran record spending and AT&T and Verizon are both expected to have paid well to assert their status. The question for investors is what impact these bids will have on the companies’ financial position.

Full preview: AT&T earnings start a defining year for the telecom giant

AT&T and Comcast have more media exposure than Verizon, and the two companies have tried to contend with the new realities that the pandemic brings. Both companies have made moves to emphasize streaming more with their film discs given theater closures, and the economic consequences of those moves will be worth seeing.

Pays up

The evolving situation with the pandemic may not be more clearly reflected than in the results of Visa Inc. V,
Mastercard Inc. MUST,
and American Express Co. AXP,
which has a pulse on the global consumer landscape. Companies need to provide insight into a travel recovery towards the end of the year as well as the impact of recent closures.

Susquehanna analyst James Friedman recently wrote that his Mastercard revenue projection of $ 3.97 billion. The dollar is slightly below the consensus outlook, though he also asked, “Does anyone really care about Q4 2020?” Friedman is upbeat in terms of mobile payments and online shopping dynamics, suggesting “positive trends going forward” for Mastercard, which reports Thursday morning. Visa follows that afternoon, while American Express kicks off the week with its Tuesday morning report.

The chip saga continues

Advanced Micro Devices Inc. AMD
is ready to continue to benefit from Intel Corp.’s INTC
stumbles that analysts expect to last for a while, even as Intel prepares for a new technology-oriented CEO to take the helm.

“We have low confidence that Intel will be able to close the transistor gap quickly and therefore expect it to continue to lose its share in the foreseeable future,” Jefferies analyst Mark Lipacis wrote after Intel’s latest earnings report. AMD will show how this dynamic has played out on its side of the equation when it releases numbers Tuesday afternoon.

Full Preview: If Intel Gets Its Action Together, Can AMD Maintain Raised Rating?

Other chipmakers reporting in the coming week include Texas Instruments Inc. TXN
Tuesday afternoon; Xilinx Inc. XLNX,
which is in line to be acquired by AMD, Wednesday afternoon report when it will be joined by chip equipment manufacturer Lam Research Corp. LRCX
; and Western Digital Corp. WDC
Thursday afternoon.

Busy week for Dow

Among the 13 members of the Dow Jones Industrial Average DJIA
set to report this week is 3M Co MMM.
, Johnson & Johnson JNJ,
American Express, Verizon and Microsoft Corp. MSFT,
as everyone reports Tuesday.

“In the short term, we see the company’s COVID-19 vaccine release as an important upcoming catalyst and believe that efficiency in the 80% + range will suggest a clear role for the product in the market,” wrote JP Morgan analyst Chris Schott about Johnson & Johnson .

Cowen & Co. analyst J. Derrick Wood sees tough comparisons for Microsoft especially in its Azure and server companies, though he expects a more favorable situation in the future.

Full view: SolarWinds hack can actually be a good thing for Microsoft

Wednesday brings results from Boeing and Apple, while Thursday includes McDonald’s Corp. MCD,
Dow Inc. DOW,
and we saw. Honeywell International Inc. HON,
Chevron Corp. CVX,
and Caterpillar Inc. CAT
round week Friday morning.

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