Stocks to watch: Adobe, Oracle and Red Hat will show their reports this week. Let’s see what is expected about them
Public companies in the United States are mandated by law to release their reports every quarter. This rule has led to support and opposition from the stakeholders. Many investors love the quarterly reports because they give them more details of the workings of the companies. Media pundits love them because they give them additional news. Opponents, who include corporate leaders hate the quarterly releases because they promote short-termism. They argue that three months is a very short period to analyze the performance of a company.
This week, investors will focus on the releases of Adobe and Oracle, which will report on Tuesday and Wednesday respectively.
Adobe is a technology company that became famous for productivity tools like Photoshop, Lightroom, and Acrobat. Today, Photoshop remains the biggest photo-editing software in the world while Lightroom is the biggest video-editing company. Acrobat is the biggest document-related software. In the past few years, the company has become one of the fastest technology companies in the world.
This is after it shifted its business from being a seller of software packages into a subscription platform. In the past, it sold software to customers for more than $100. Today, customers pay a subscriptions that start at $9 a month for Lightroom and Photoshop. A single app like Photoshop costs $20 a month while all apps go for $52 a month. There is another $82 package that includes stock photos.
This model has worked well for Adobe, which generated revenues of more than $9 billion. It has also diversified its business to include digital media and digital experiences segment. In this week’s earnings, investors expect the company to generate revenues of $2.7 billion and EPS of $1.78. The chart below shows the performance of Adobe this year.
Oracle will report on Wednesday and investors expect it to make revenues of $10.93 billion and an EPS of $1.07. As probably you just know, Oracle is one of the biggest software companies in the world valued at more than $182 billion. The company is famous for its database products, servers, enterprise management, middleware , business intelligence, search, and other applications.
In recent years, the company has increased its focus on the cloud industry, following the lead of other old tech companies like Microsoft and International Business Machines (IBM). In this week’s results, investors will focus on the headline revenue and EPS numbers, the guidance for the rest of the year, and the progress the company has made in the cloud sector.
Another company investors will focus on is Red Hat, which will report on Thursday. The company is an IT provider that focuses on the open source market. The company is in the process of being acquired by IBM in a transaction worth more than $33 billion.
Therefore, investors will look at the results with the lenses of IBM, which will be its parent company in this second half of the year. The consensus estimate for the company is revenue of $933 million and an EPS of $0.87.
Other companies that will release their quarterly reports are Blue Prism, Wall Financial Corporation, and Cornerstone Building.
Other useful resources for this week’s Stocks to watch
IBM & Red Hat: Worldwide Market Shares – BusinessWire
Adobe on Yahoo Finance
Stock information about Oracle