The new earnings season is on the cusp of starting up again with three big names reporting earnings this week. Find out what to watch for in Blackberry Ltd (NASDAQ:BBRY), Micron Technology, Inc. (NASDAQ: MU) and Darden Restaurants, Inc. (NYSE:DRI):
Mobile phone company Blackberry will post its first quarter 2016 earnings results on Tuesday, June 23 before the market opens. Wall Street expects the company to post a loss of ($0.03) a share and $683.65 million in revenue, up from a loss of ($0.11) a share but down from $966 million from the same quarter a year prior, respectively.
After several quarters in negative territory, Blackberry finally posted positive cash flow in its last quarterly earnings report on March 27. This accomplishment can largely be attributed to Blackberry CEO John Chen, who stepped into his role in November 2013.
One of the initiatives Chen took to get Blackberry generating a positive cash flow was shifting the company’s focus from smartphones to software. Back in November of last year, Blackberry launched its BES 12 platform that was designed for businesses to connect with all mobile devices, including Apple iOS and Google Android. Investors will be paying close attention to Blackberry’s software revenue and to see if the company can sustain its software business enough to make it worth investing in for the long-term.
Additionally, investors will be looking for clarification on rumors that Blackberry will team up with Samsung to develop a new smartphone device and if the firm will make a new android phone.
Out of 15 analysts polled on TipRanks, two analysts are bullish on Blackberry, four are bearish, and nine remain neutral. The average 12-month price target on Blackberry is $9.05, marking a +1.57% potential upside. On average, the all-analyst consensus for Blackberry is Hold.
Micron Technology, Inc.:
Semiconductor company Micron Technology is slated to announce its third quarter 2015 earnings results on Thursday, June 25 after market close. The company is expected to post earnings of $0.58 per share and $3.92 billion in revenue, down from $0.79 earnings per share and $3.98 billion in revenue year-over-year.
Micron has been struggling lately with the price fluctuations of DRAM memory chips, which has been prevalent in the fluctuations of Micron’s stock price. Since its last quarterly report on April 1, Micron shares have fallen 15% and are down just over 30% this year so far.
The price fluctuation of DRAM chips is partly due to the decreasing popularity in personal computers. With that said, Micron competitor Samsung threatened the company’s DRAM sales when it began clearing its inventory due to the declining PC market.
In addition to the decreasing interest in PC’s, DRAM prices have been declining since 2011 due to growing competition the semiconductor industry.
Wall Street assumed that DRAM prices would level out in 2013 when companies focused less on PCs and started producing more memory chips for smartphones, tablets, and servers. However, investors fear that DRAM prices will continue to decline due to excess supply.
Out of 23 analysts polled by TipRanks, 18 analysts are bullish on Micron, three analysts are bearish, and two analysts are neutral. The average 12-month price target for Micron is $35.80, marking a 46% potential upside from where the stock is currently trading. On average, the all-analyst consensus for Micron is Moderate Buy.
Darden Restaurants, Inc.:
Darden Restaurants is set to announce its fourth quarter 2015 earnings results on Tuesday, June 23 before the opening bell. Analysts expect the company to post $0.93 earnings per share and $1.87 billion in revenue, up from $0.84 earnings per share but down from $2.32 billion in revenue in the same quarter last year.
Darden has been in the media several times this year after activist hedge fund Starboard Value LP took over the company’s board in October of last year. To start, Starboard was not pleased when Darden sold off the Red Lobster chain and believed the sale was undervalued. The hedge fund then replaced Darden’s entire board because they disagreed with two prior policies. First, the hedge fund believed the prior board was wasting money offering unlimited breadsticks. Second, the hedge fund disagreed with Olive Garden’s unwillingness to salt the pasta water in an effort to save money by avoiding wearing down the pots.
However, Darden started to turn things around as proven in its most recent earnings results on March 20. CEO Gene Lee commented, “Our strategy of getting back to basics and elevating the food, service, and atmosphere in our restaurants in order to deliver the best possible guest experience is driving these sales and profitability improvements.”
Out of 14 analysts polled by TipRanks, nine analysts are bullish on Darden, one analyst is bearish, and four analysts remain neutral. The 12-month average price target for Darden is $72.77, marking over a 5% potential upside from where the stock is currently trading. On average, the all analyst consensus for Darden Restaurants on TipRanks is Moderate Buy.