Palo Alto, Antofagasta, Analog Devices and Urban Outfitters #UKFinance

As earnings season winds down, investors will still have plenty to watch next week as key companies across various sectors provide updates that could offer valuable insights into market trends.

In the cybersecurity arena, Palo Alto Networks will report its results, with investors eager to see if the company is capitalising on the recent outage woes of its rival, CrowdStrike. Meanwhile, Chilean copper mining giant Antofagasta will shed light on how it has been managing amid declining copper prices, a critical indicator for the global commodities market.

In the tech sector, Analog Devices is expected to offer a glimpse into the ongoing impact of the artificial intelligence (AI) hype on the semiconductor industry, potentially revealing whether enthusiasm for AI is translating into tangible growth.

In the fashion world, Urban Outfitters is anticipated to fall short of Wall Street expectations, underscoring the challenges in the retail sector.

Beyond the corporate world, all eyes will turn to the Jackson Hole central bankers’ symposium, taking place from Thursday 22 August to Saturday 24 August. The annual gathering of monetary policymakers is likely to influence markets globally, as discussions around interest rates and economic strategy could set the tone for the months ahead.

Here’s what to look out for:

Palo Alto (PANW) — Reports fiscal fourth quarter earnings on Monday 19 August

Palo Alto Networks (PANW) is poised to release its fiscal fourth quarter results after markets close on 19 August, with investors keenly anticipating a strong outlook for 2025 and updates on the company’s ongoing “platformisation” strategy.

Analysts expect the cybersecurity giant to report revenue growth to $2.16bn (£1.68bn), up from $1.95bn in the same quarter last year, according to estimates compiled by Visible Alpha. Net income is projected to reach $232.9m, or 66 cents per share — a modest year-over-year increase, but a sequential decline from previous quarters.

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Palo Alto Networks has a strong track record of meeting or exceeding expectations, having done so in 16 of the last 17 quarters, according to Benzinga Pro data. Given this history, the market will be watching closely to see if the company can continue this trend.

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Beyond the immediate results, the company’s guidance for fiscal 2025 will be a focal point. Analysts are expecting full-year revenue guidance to reach $9.09bn. In the past, Palo Alto has provided comprehensive outlooks, including projections for billings, revenue, net income per share, and free cash flow margins — metrics that will be scrutinised for signs of the company’s future performance.

This earnings report also comes on the heels of a public relations issue for Palo Alto Networks. The company recently faced backlash over what has been described as “sexist” behaviour at a corporate event. The controversy erupted after a photo went viral, showing two women with company-branded lampshades on their heads. The incident sparked widespread criticism, prompting an apology from the CEO, who labelled the situation as “unacceptable.”

In the previous quarter, Palo Alto Networks reported revenue of $1.985bn, surpassing estimates of $1.967bn, and earnings of $1.32 per share, beating expectations of $1.25 per share.

“We have remained disciplined in our execution while investing in go-to-market and innovation. We delivered consistent, profitable growth yet again in Q3 and look forward to executing against our strategic goals and financial targets as we close out the year,” Palo Alto CFO Dipak Golechha said at the time.

Antofagasta (ANTO.L) — Reports first half results on Tuesday 20 August

Financial markets are experiencing a turbulent period. Stock markets are swinging wildly, government bonds are rallying, and currency markets are displaying erratic behaviour.

Amidst this volatility, copper, a key industrial metal, has fallen below $9,000 per tonne for the first time in nearly six months — a development that may offer a telling signal about the global economic outlook.

Typically, a strong copper price is viewed as a positive indicator of global economic health. Known as “Doctor Copper” for its ability to diagnose the state of the economy, the metal’s wide range of industrial uses — from infrastructure to automotive manufacturing — makes it a barometer for economic activity.

In the corporate sector, all eyes are on FTSE 100 (^FTSE) member Antofagasta, a near-pure play on copper, which is set to release its first-half results on Tuesday.

The Chilean miner’s shares have recently slipped, reflecting the weakness in copper prices and a mixed trading update in July. Investors and analysts will focus on five key metrics in the upcoming report, according to investment director Russ Mould, head of financial analysis, Danni Hewson, investment analyst, and Dan Coatsworth, all of AJ Bell.

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• Copper output: Antofagasta’s copper production is expected to range between 670,000 and 710,000 tonnes for 2024, an increase from 2023’s 660,600 tonnes. However, the company’s July update suggested production might hit the lower end of this range, with cash costs remaining flat at $1.60 per pound.

• Costs: Last year, net cash costs were steady at $1.60 per pound, with an initial forecast of a modest rise to $1.65 in 2024. This has been revised to $1.70 due to lower ore grades at the Centinela and Los Pelambres sites — equivalent to $3,750 per tonne, still below current copper prices.

• Profit: Analysts predict a 25% increase in pre-tax earnings for 2024, reaching $2.5bn, up from $765m in the first half of last year. EBITDA, Antofagasta’s preferred profit measure, was $1.3bn in the first half of 2023, with expectations for a year-on-year increase across 2024.

• Capital expenditure: The company’s capex reached $2.2bn in 2023, with a forecasted rise to $2.7bn for 2024, driven by investments at Centinela and Los Pelambres.

• Dividend: Antofagasta’s total dividend payment fell from 59.7 US cents in 2022 to 36 cents in 2023. Analysts expect a slight further decrease to 34 cents this year, partly due to increased capital expenditure. Last year, the company declared an interim dividend of 11.7 cents.

Analog Devices (ADI) — Reports third quarter results on Wednesday 21 August

Silicon chip maker Analog Devices has long been regarded as a valuable barometer of economic activity in the US and globally.

With its specialisation in analogue, mixed-signal processing, and power management chips, the company serves over 125,000 customers across diverse sectors, offering more than 75,000 products. Just over half of its sales are driven by industrial markets, a quarter by the automotive sector, with the remainder coming from communications and consumer applications.

Given this broad exposure, the recent decline in Analog Devices’ share price, along with the broader Philadelphia Semiconductor Index (SOX), takes on heightened significance, says AJ Bell. Both the company’s stock and the SOX had been soaring until July, but have since flirted with bear market territory, Mould and Hewson say. This downturn may simply be a correction following a strong rally, or it could reflect deeper concerns about global economic momentum.

Analysts are forecasting a 5% sequential increase in sales to $2.3bn, a key figure that will be closely scrutinised. During the second-quarter earnings call, management projected around 10% sequential growth in the consumer segment, mid-single-digit gains in industrial, and slower growth in communications and automotive.

Any guidance for the final quarter of the fiscal year will also be critical. Consensus estimates suggest another 5% quarter-on-quarter sales increase between August and October to $2.4bn, although this would still represent a 13% year-on-year decline. Renewed weakness in US manufacturing purchasing managers’ indices (PMIs) could pose a challenge to achieving this target.

Attention will also focus on the operating margin, where chief executive and chair Vincent Roche and CFO Richard Puccio have guided the market to expect a 40% margin at the midpoint for the third quarter.

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With a projected tax rate of 11% to 13%, the company has guided to an expected earnings per share (EPS) of $1.50, plus or minus $0.10. Investors will be keenly interested in any commentary regarding the final quarter, where the consensus estimate stands at $1.60 — still significantly below the figure for the same period last year.

For the full fiscal year ending in October 2024, Analog Devices is expected to generate revenues of $9.3bn and an EPS of $6.24, down from $12.3bn and $10.09 in 2023. However, analysts are forecasting a 15% revenue increase in fiscal 2025 to $10.7bn, which is expected to drive a 25% rebound in EPS to $7.98. It may, however, be too early for management to provide a confident outlook for the next fiscal year.

One indicator of management’s confidence in the future will be capital expenditure, which fell by a third year-on-year to $188m in the second quarter. For the full year, analysts are predicting a significant reduction in spending to just over $700m, down from $1.3bn in fiscal 2022.

Urban Outfitters (URBN) — Reports quarterly earnings on Wednesday 21 August

Urban Outfitters is set to announce its earnings for the quarter ending July 2024 on 21 August, with the market anticipating a year-over-year decline in earnings despite an increase in revenues.

The company is expected to report quarterly earnings of $0.98 per share, marking a 10.9% decline from the same period last year, according to Zachs Research. Meanwhile, revenues are forecasted to rise by 5.2% year-over-year to $1.34bn.

Should Urban Outfitters exceed these key expectations, the stock might experience an upward movement. Conversely, if the company falls short of these estimates, a decline in its share price could follow, the analysts at Zachs Research said.

Given the close scrutiny of this earnings report, investors will be keen to gauge the likelihood of a positive earnings surprise. Such a result could signal stronger-than-expected performance in a challenging retail environment, potentially offering a boost to the stock in the short term.

However, with the anticipated earnings decline, the company’s ability to manage costs and drive sales growth will be under the spotlight as analysts and investors assess Urban Outfitters’ outlook for the remainder of the year.

Beyond the immediate reaction to the earnings figures, the sustainability of any price movement and future earnings forecasts will largely depend on the insights provided by management during the earnings call. Their discussion of current business conditions, including consumer demand and operational challenges, will be crucial in shaping investor sentiment.

Other companies reporting next week include:

Monday 19 August

Thungela Resources (TGA.L)

Estée Lauder (EL)

Tuesday 20 August

Wood Group (WG.L)

Oxford Instruments (OXIG.L)

Tribal (TRB.L)

Anexo (ANX.L)

Geely Automotive (80175.HK)

Coloplast (COLO-B.CO)

Lowe’s (LOW)

Toll Brothers (TOL)

Coty (COTY)

Nordstrom (JWN)

Wednesday 21 August

Mobico (MCG.L)

Costain (COST.L)

China Telecom (601728.SS)

Xiaomi (1810.HK)

Agilent (A)

Snowflake (SNOW)

Zoom Video Communications (ZM)

Thursday 22 August

Macfarlane (MACF.L)

Hays (HAS.L)

Ping An Insurance (601318.SS)

AIA (1299.HK)

Baidu (BIDU)

Swiss Re (SREN.SW)

Dollar Tree (DLTR)

Workday (WDAY)

Bilibili (BILI)

Peloton (PTON)

Friday 23 August

Meituan (3690.HK)

You can read Yahoo Finance’s full calendar here.

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