ZM, MDT, NVDA, NIO, CRM: Earnings Preview

By Duncan Ferris

Aug 22, 2022

This week's earnings updates include Zoom Video Communications (NASDAQ: ZM), Medtronic PLC (NYSE: MDT), Nvidia Corporation (NASDAQ: NVDA), Nio Inc (NYSE: NIO) and Salesforce (NYSE: CRM).

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Here are some key earnings reports to be aware of for the week ahead:

Zoom Video Communications

Kicking off the week is Zoom Video Communications (NASDAQ: ZM), a pandemic favourite which shot up in popularity as office workers searched for new ways to conduct meetings when working from home.

The business provides unified communications platform in the Americas, Asia Pacific, Europe, the Middle East and Africa, with its offering including HD video, voice, chat and content sharing through mobile devices, desktops, laptops, telephones and conference room systems.

Zoom’s share price value has been slashed by more than 45% across the year to date, with the business struggling to sustain the growth it achieved in the pandemic period and facing increasing levels of competition from other video calling services.

For the upcoming second quarter results, total revenue is expected to be between $1.115bn and $1.120bn, while non-GAAP diluted earnings per share is expected to be between $0.90 and $0.92.

This would constitute solid revenue growth, but with numerous analysts now rating the stock as a ‘sell’ and high competition from Microsoft’s (NASDAQ: MSFT) Teams offering, such growth might not matter to a lot of investors.

The business will report its earnings on Monday evening.

Medtronic PLC

Medtronic (NYSE: MDT) develops, manufactures and sells device-based medical therapies to healthcare systems, physicians, clinicians and patients worldwide. The business has seen its share price fall by just over 10% across the year to date, though it has recovered some ground over the last month.

In May, the business reported its fourth quarter and full year earnings, which showed a 5% increase in revenue across the 12-month period but a 1% decline in the final quarter. The update also saw Medtronic hike its dividend by 8% to $2.72 per ordinary share. 

The business expects to achieve revenue growth of between 4 and 5% across its 2023 financial year, as well as non-GAAP EPS in the range of $5.53 to $5.65.

Medtronic CFO Karen Parkhill commented:

“We expect recent and upcoming product launches to make a difference across our

businesses this coming fiscal year. Supply chain, inflation, and foreign exchange are expected to create near-term pressure. Yet, we remain focused on driving our R&D investments to accelerate our growth and create large, long-term returns for our shareholders.”

As such, we could see a slower quarter from Medtronic, with the company’s growth over the period falling slightly below its full-year expectations. Zacks Consensus Estimate has revenue climbing by 9.8% and earnings per share falling by just over 20% in the first quarter update.

Keep your eye out for this earnings update on Tuesday morning.

Nvidia Corporation

Nvidia Corporation (NASDAQ: NVDA) is a provider of graphics, computing and networking solutions in the United States, Taiwan, China and internationally.

The business last reported an earnings update in May, with its first quarter efforts yielding record revenues of $8.29bn. This constituted an increase of 46% from the same period one year prior.

However, a downturn in fortunes appears to be on the cards for the company’s second quarter, with the company’s preliminary second quarter results showing revenue of $6.70bn versus outlook of $8.10bn.

The company has attributed this anticipated shortfall to a drop in gaming revenues, which Nvidia said have declined by 33% compared to the same period a year beforehand.

The company has previously noted that the second half of the year is expected to see the biggest wave of new product launches in Nvidia’s history, with the company set to release new GPU, CPU, DPU and robotics processors.

Even with the excitement scheduled for the second half of the year, Nvidia’s second quarter earnings should be interesting as they will give investors a little more insight into what they can expect from the company’s full year performance.

Investors can expect to see Nvidia’s earnings after markets close on Wednesday.

Nio Inc

Nio Inc (NYSE: NIO) designs, develops, manufactures and sells smart electric vehicles in China, with the company offering five, six and seven-seater electric SUVs, as well as smart electric sedans.

The company has already released vehicle delivery stats for its second quarter, stating that 25,059 vehicles rolled out in the three months ended June 2022. This amounts to a 14.4% year-over-year increase.

Nio has also recently unveiled new vehicle models and expects to commence with deliveries in its third quarter.

While deliveries are up and new vehicles are on the horizon, the company has notably been the subject of a recent short seller report from Grizzly Research LLC. This report, which was released in late June, claimed that the business was exaggerating its revenue and profit margins, accusing Nio of “playing accounting games” in order to meet targets.

Responding to the report, Nio said the analysis was “without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations”. However, the business also stated it was reviewing the various allegations against it, so investors could see another update in its upcoming earnings.

Nio’s earnings are set to be released on Wednesday.

Salesforce Inc

Salesforce (NYSE: CRM) provides customer relationship management technology that aims to bring companies and customers together worldwide.

This company’s first quarter results, which were unveiled back in May, showed a 24% year-on-year increase in revenue to $7.4bn. 

Marc Benioff, Co-CEO of Salesforce, said:

“There is no greater measure of our resilience and the momentum in our business than the $42bn we have in remaining performance obligation, representing all future revenue under contract.

“While delivering incredible growth at scale, we’re committed to consistent margin expansion and cash flow growth as part of our long-term plan to drive both top and bottom line performance.”

For the second quarter the company has said it is anticipating revenue of between $7.69bn and $7.70bn, which would amount to approximately 21% growth over the same period in its last financial year. A loss per share of around $0.02 is also expected.

The company will release its earnings update after the close of trading on Wednesday.

Important Notice And Disclaimer

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.