Technology stocks are anticipated to see a sluggish fourth-quarter 2019 earnings season, primarily due to continued softness in the semiconductor space.
Softness in NAND pricing and higher tariffs on electronics, thanks to the U.S.-China trade tussle are anticipated to be reflected in the industry players’ financial results this time around.
Nonetheless, the technology sector’s fourth-quarter 2019 results are expected to bring the period of sequential earnings decline to an end.
Per the Earnings Preview, technology sector fourth-quarter earnings are estimated to decline 2.8% year over year on revenue growth of 4.2%. This would follow 7% decline in the sector’s earnings in the preceding quarter on 2.4% higher revenues.
Improving trend in PC shipments, strengthening data center market, increasing proliferation of IoT and growing clout of cloud-based applications are likely to have benefited the companies’ in the quarter under review.
Moreover, the accelerated deployment of 5G technology — the next-generation of wireless connectivity — is also likely to have spurred growth.
Q4 Performance of Tech Stocks so Far
So far, Intel (INTC - Free Report) and International Business Machines Corporation (IBM - Free Report) delivered earnings beat, which buoyed optimism.
Intel’s fourth-quarter performance benefited from growth in the data-centric businesses, driven by robust adoption of high-performance products, including Xeon Scalable processors.
Further, IBM’s fourth-quarter results reflected improved position in the hosted cloud, security and analytics. Moreover, IBM provided promising bottom-line guidance for 2020.
Meanwhile, Texas Instruments (TXN - Free Report) fourth-quarter 2019 results reflected persistent weakness in the company's Analog and Embedded Processing segments.
Sneak Peek Into Upcoming Tech Releases
Given the mixed backdrop, investors interested in the technology sector will keenly await upcoming earnings releases from notable players, including Facebook (FB - Free Report) , ServiceNow (NOW - Free Report) , Microsoft (MSFT - Free Report) and PayPal Holdings (PYPL - Free Report) , due to report on Jan 29.
Facebook’s fourth-quarter 2019 results are likely to reflect continued subscriber growth, driven by rapid adoption of Stories and Gaming endeavors. The company has also bolstered its streaming and live video unit, given its push into augmented reality and more.
Moreover, the Menlo Park, CA-based company has a Zacks Rank #3 and an Earnings ESP of +2.62%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Notably, per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $2.51 per share, up a penny in the past 30 days. (Read more: Facebook to Report Q4 Earnings: What's in the Cards?)
Facebook, Inc. Price and EPS Surprise
Moreover, the Santa Clara, CA-based company has a Zacks Rank #3 and an Earnings ESP of +0.57%.
Notably, the consensus mark for fourth-quarter earnings has been steady at 88 cents over the past 30 days. (Read more: ServiceNow to Report Q4 Earnings: What's in the Cards?)
ServiceNow, Inc. Price and EPS Surprise