News

Earning Season – Microsoft Corp. and Tesla Inc.

Microsoft – Develops, manufactures, licenses, sells and supports software products

Fundamental

Microsoft (NYSE: MSFT) is scheduled to announce Q2 results at 9:30 PM GMT today. The consensus EPS estimate is $1.38 (+0.7% year-on-year) and the consensus revenue estimate is $36.55 billion (+8.4% year-on-year).

Microsoft's fiscal third-quarter proved that the company does not depend on a functional economy to find the demand for its products and services, especially regarding cloud infrastructure and off-premise software, which can benefit from the "disrupted office" trends. On June 26, 2020, Microsoft announced a strategic change in its retail operations, including closing Microsoft Store physical locations as the retail team members will continue to serve customers from Microsoft corporate facilities and remotely providing sales, training, and support. Microsoft will continue to invest in its digital storefronts on Microsoft.com, and stores in Xbox and Windows, reaching more than 1.2 billion people every month in 190 markets. The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450 million, or $0.05 per share, to be recorded in the current quarter ending June 30, 2020. The charge includes primarily asset write-offs and impairments.

Technical

  • Price is ranging between the 23.6% and 50% on the extended Fibonacci retracement
  • Price is holding in the bullish channel and well above the 50-day simple moving average

Tesla – Electric vehicles, scalable clean energy generation, and storage products

Fundamental

Tesla (NYSE: TSLA) is scheduled to announce Q2 results at 9:30 PM GMT today. The consensus EPS estimate is $-0.28 (+75% year-on-year) and the consensus revenue estimate is $5.31 billion (-16.4% year-on-year).

For the past 3 years, Tesla has been increasing market share by about 5% per year. Tesla’s vehicle deliveries drive most of its earning results since vehicle sales represent the main revenue stream. Shares have surged following better than expected second-quarter vehicle delivery numbers even though production levels were down 20% due to COVID-19 halting its Fremont factory for most of the quarter.

Technical

  • Price above the 50-day simple moving average and within the bullish channel
  • Initial support on the 38.2% Fibonacci at $1,477 from the $953.94 to $1,798.5 range
  • Possibly better than expected results could help pin Tesla’s price

Disclaimer

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