Snap CEO Evan Spiegel has given investors plenty to guffaw over, from a failed foray into selling Spectacles, or camera glasses, to a three-minute-long shareholder meeting. But the joke at the social-media company may finally be over.
Last week, Spiegel’s advertising-driven platform smashed third-quarter revenue expectations by more than $100 million, reporting a loss of 14 cents a share on sales of $678.7 million. Shares surged nearly 40% on the week, as executives talked about brand advertisers returning to the platform in droves, with, in some cases, bigger budgets. As portents go for online advertising recovering, these are good ones for next week’s batch of earnings reports from social-media darlings Pinterest, Twitter, and Facebook.
Facebook’s sales growth was damaged by ad pullbacks in the past two quarters but rebounded swiftly. Its targeting capabilities and reach have made it indispensable for advertisers and those looking for immediate returns on investment through direct response.
However, in July, civil-rights groups organized a boycott over Facebook’s inability to police hate speech. The effects are unclear, but if there are any, they’ll show up in the third quarter. The action attracted more than 1,000 brands, including heavyweights such as Unilever and Coca-Cola. Yet Facebook boasts millions of accounts, and most of its business is from smaller clients.
Arguably the most proactive social-media content moderator, Twitter, has gained 40% since Barron’s wrote positively about the stock in June. Hurt more than its peers by the pandemic’s effect on online ads, there is the potential for a sales rebound—if Snap is more than an anomaly.
Next Week
Monday 10/26
F5 Networks, Hasbro, HCA Healthcare, National Oilwell Varco, Otis Worldwide, SAP, and Twilio release quarterly results.
The Census Bureau reports sales of new single-family homes for September. Consensus estimate is for a seasonally adjusted rate of one million homes sold, roughly even with the August figure. New-home sales are now at their highest level since 2006.
Tuesday 10/27
3M, Advanced Micro Devices, BP, Caterpillar, Centene, Cummins, Eli Lilly, Franklin Resources, Invesco, Laboratory Corp. of America Holdings, Merck, Microsoft, MSCI, Novartis, Pfizer, Raytheon Technologies, and S&P Global report earnings.
The Conference Board releases its Consumer Confidence Index for October. Economists forecast a 101.5 reading, just below the September data. Consumer confidence increased sharply in September, but remains below prepandemic levels.
Wednesday 10/28
Ameriprise Financial, Amgen, Anthem, Automatic Data Processing, Boeing, Cerner, CME Group, eBay, Equinix, Etsy, Ford Motor, General Dynamics, General Electric, Gilead Sciences, Mastercard, Norfolk Southern, Pinterest, ServiceNow, Sony, United Parcel Service, and Visa report quarterly results.
Thursday 10/29
It’s a big day for tech, as many megacaps release results. Four of the FAANGs—Facebook, Amazon.com, Apple, and Google parent Alphabet—report after the market close.
Activision Blizzard, Alexion Pharmaceuticals, American Tower, Anheuser-Busch InBev, BorgWarner, CBRE Group, Comcast, ConocoPhillips, DuPont, Intercontinental Exchange, International Paper, Kraft Heinz, MGM Resorts International, Molson Coors Beverage, Moody’s, Newmont, Royal Dutch Shell, Sanofi, and Twitter hold conference calls to discuss earnings.
The Bank of Japan announces its monetary policy. The central bank is widely expected to keep its short-term interest rate unchanged at negative 0.1%.
The Bureau of Economic Analysis reports its advance estimate for third-quarter gross domestic product. Expectations are for a record expansion at an annualized 30% rate after a record contraction of 31.4% in the second quarter.
Friday 10/30
AbbVie, Altria Group, Cboe Global Markets, Charter Communications, Chevron, Colgate-Palmolive, Exxon Mobil, Honeywell International, Phillips 66, and Weyerhaeuser report quarterly results.
The BEA reports personal income and expenditures for September. Consensus estimates are for a 0.1% month-over-month increase for income and 1% gain in spending. This compares with a 2.7% decline and 1% rise, respectively, in August.
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October 24, 2020 at 04:51AM
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Why Snap’s Surge Is Good News for Social Media - Barron's
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