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Twitter, Uber and Disney: What to expect in the next round of tech earnings

City AM logo City AM 9/02/2021 17:03:37 James Warrington
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Twitter, Uber and Disney will all be under the spotlight as they report fourth-quarter earnings this week.

Facebook, Apple, Amazon, Netflix and Google (known as the FAANGs) all closed the year with bumper results as the tech titans continued to cash in on the pandemic.

But it will be a more complicated picture for Twitter, Uber and Disney, which have all experienced setbacks during the Covid crisis.

Here's what to expect:

Read more: Jeff Bezos to step down as Amazon chief executive as quarterly sales hit $125bn

A change of tack for Twitter?

Twitter posted a strong third quarter, with revenue rising 14 per cent to $936m (£679m) and profit of 19 cents per share.

The company is forecast to hit revenue of $1.2bn in the fourth quarter, with profit rising to 30 cents per share.

However, analysts warned that controversy around political events in the US could pose a problem both for the platform's user numbers and its ad revenue.

"As its user figures grow as a result of its role during the recent events in the US, so too does the spread of misinformation and highly politicised negative content, bringing its position as a brand-safe environment into question for the advertisers who fund the site yet again," said Tamara Littleton, chief executive of marketing agency The Social Element.

Michael Hewson, chief market analyst at CMC Markets, warned Twitter's fourth-quarter numbers could "slip back" in light of recent events, adding profit expectations seemed "optimistic".

Read more: Birdwatch: New Twitter feature allows users to flag misinformation

But investors may also be turning their attention towards future revenue sources, as Twitter explores new ways to monetise its users.

In the last month the social media firm has snapped up podcast app Breaker and newsletter service Revue, suggesting an expansion of its content offerings.

Twitter is also said to be building a new subscription model in a bid to reduce its reliance on ad revenue.

Charging for an exclusive level of paid-for content, services such as Tweetdeck or advanced features such as 'undo send' are all under consideration, Bloomberg reported.

"Only by sticking to its guns on combating misleading content, and by expanding its monetisable offerings will it be able to move forward as a viable option for attracting  both attention and ad dollars," Littleton said.

Read more: Watchdog opens competition probe into Uber's Autocab takeover

Uber steers into food delivery

a bottle of wine on a table: Uber has agreed a deal to buy alcohol delivery app Drizly for $1.1bn © Provided by City AMUber has agreed a deal to buy alcohol delivery app Drizly for $1.1bn

Uber has also faced major setbacks during the pandemic, suffering a sharp downturn in trading for its core ride-hailing business.

The company posted losses of more than $1bn in the third quarter, while revenue also fell short of expectations.

However, focus is likely to be on the Uber Eats side of the business when the company reports fourth-quarter earnings tomorrow night.

The platform has successfully shifted its attention to food delivery, which has benefitted from a huge surge in demand due to restaurant closures during the pandemic. 

Revenue from Uber's delivery business has increased 190 per cent year on year.

Investors will also be on the lookout for updates on recent acquisitions, as Uber has splashed out vast sums of money to help fuel its delivery growth.

The firm has acquired rival Postmates for $2.7bn, while last week it splurged $1.1bn on booze delivery platform Drizly.

Uber is expected to post a quarterly loss of 0.54 cents per share.

Read more: Disney Plus increases subscriber target after surpassing 137m customers

The Disney dream wavers

It's also a mixed affair over at Disney, which has turned attention to its streaming service amid a sharp downturn in much of its entertainment empire.

The Mouse House has been forced to lay off a staggering 32,000 employees as the pandemic shuttered its theme parks, cancelled cruises and hamstrung its film studios.

In its latest set of figures the firm lost $710m, while revenue fell to $14.7bn.

The one saving grace, however, is Disney Plus, which launched in the UK on the eve of the first lockdown last March.

In December Disney said its global subscriber numbers had grown to 86.8m in the first year - a rapid takeup, though still considerably behind Netflix's user base of more than 200m.

Disney's Mulan was released direct to streaming last year (Photo: Jasin Boland © 2019 Disney Enterprises) © Provided by City AMDisney's Mulan was released direct to streaming last year (Photo: Jasin Boland © 2019 Disney Enterprises)

Disney, which last year launched major titles Mulan and Soul exclusively on its streaming platform, has said it will hike subscription fees to £7.99 per month in March as it looks to cut losses.

But Hewson warned that Disney's decision to charge additional fees for some content was "a little presumptuous".

"Asking for a monthly fee and then adding additional costs on top of that smacks of taking liberties in what is becoming an increasingly competitive market place," he said.

The platform's catalogue of content also remains quite far behind rival Netflix, so investors will be hoping for signs of a strong pipeline of new films and TV shows.

Disney is forecast to post an increased loss of 30 cents per share in the fourth quarter.

The post Twitter, Uber and Disney: What to expect in the latest round of tech earnings appeared first on CityAM.

mardi 9 février 2021 19:03:37 Categories: City AM

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