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Square, Qualcomm, Roku earnings — What to know in markets Wednesday

Heidi Chung
Reporter

Several large-cap companies will be in focus reporting quarterly results Wednesday.

After the market close, Square (SQ), Qualcomm (QCOM) and Roku (ROKU) are scheduled to deliver their earnings reports.

Square’s third quarter results follow a noisy second quarter. The company beat on the top and bottom lines, but shares fell 8% on August 1, after the payment company reported a slight miss on gross payment volume and issued weaker-than-expected adjusted EPS guidance.

During the second quarter, Square’s Cash peer-to-peer app, which is seen as competition to PayPal’s Venmo, generated $135 million excluding bitcoin trading. Given the continued strength of the Cash app, analysts believe that the current full-year guidance is rather conservative.

In addition, after purchasing Caviar for $44 million in 2014, Square announced in August that it would be selling Caviar to rival DoorDash for $410 million. The deal closed on November 1.

Square is expected to report adjusted earnings of 20 cents per share on $597.14 million of revenue, according to analysts surveyed by Bloomberg.

Meanwhile, after a lesser-than-impressive third quarter, semiconductor giant Qualcomm is expected to show improvement when it reports fiscal fourth quarter results after the closing bell Wednesday. Though more information on 5G will be expected, analysts have expressed concern around 5G chip competition.

Qualcomm noted that it was extremely well positioned as 5G ramps in early calendar year 2020. “Today, we are the only chipset vendor that has 5G system level solutions spanning both sub6 GHz and millimeter bands. This is key to global deployments,” CEO Steve Mollenkopf said during the third-quarter conference call. “On the product side, our 5G design wins have doubled since our last earnings call. We now have over one hundred fifty 5G designs launched or in-development using our 5G chipsets.”

According to Mollenkopf, “By the first calendar quarter of 2020, we anticipate reaching the inflection point as our financial results begin to reflect the benefits of our substantial efforts over the years in to bring 5G to the market worldwide.”

Qualcomm is expected to report adjusted earnings of 71 cents per share on $4.71 billion in revenue. The options market is implying a 5.4% move in either direction for the stock following the announcement.

NEW YORK, NY - NOVEMBER 29: A view of Roku at IGNITION: Future of Media at Time Warner Center on November 29, 2017 in New York City. (Photo by Monica Schipper/Getty Images)

Finally, streaming player Roku is expected to continue to see a bump from the acceleration in cord-cutting. Analysts predict that strong advertising gains will have boosted Roku’s revenue during the third quarter. As pay-tv continues to lose subscribers at a rapid clip, companies that focus on streaming and over-the-top (OTT) services are seen to reap the benefits.

“A Roku sponsored study predicts ~60MM TV households are expected to access video exclusively through streaming within the next five years, surpassing traditional Pay TV viewers for the first time,” RBC analyst Mark Mahaney wrote in a note to clients Sunday. “This shift has been and will continue to be a key growth driver for streaming content aggregators like Roku.”

With Apple TV+ officially launched and Disney+ and HBO Max expected to launch soon, investors will be listening for additional commentary from Roku’s management on the potential impact to Roku’s business.

Roku is expected to report an adjusted earnings loss of 26 cents per share on $257 million in revenue during its third quarter, according to analysts polled by Bloomberg. The options market is implying a 16.4% move in either direction for Roku stock following the announcement.

Other notable earnings reports scheduled for Wednesday include Wendy’s (WEN), Coty (COTY), Capri Holdings (CPRI), CVS (CVS) before market open; Wynn Resorts (WYNN), Humana (HUM), Expedia (EXPE), Marathon Oil (MRO), Fox (FOXA), TripAdvisor (TRIP), IAC/InterActiveCorp (IAC), Fitbit (FIT), Baidu (BIDU) after market close.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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