Very Different Earnings Expectations For Facebook And Alibaba

• One FANG stock and another internet giant are on deck to report quarterly results this week.
• Wall Street expectations are very different for these two companies.
• However, both handily beat earnings expectations in the previous quarter.

Though most of the Dow Jones Industrial Average companies have already reported, the third-quarter earnings reporting season rolls on. Among the highlights this week will be the latest quarterly numbers from Facebook Inc FB and Alibaba Group Holding Ltd BABA. But the analysts' expectations for these two internet giants are very different.

The Wall Street consensus forecast calls for earnings and revenue at the so-called Amazon of China to have tumbled from last year for the period when its share price broke above $100 for the first time since January 2015. Meanwhile, top and bottom line results from the social media titan will be strong, if the analysts are correct. This in a quarter when its market capitalization first topped that of ExxonMobil.

Alibaba

When Alibaba shares its fiscal second-quarter results, the Wall Street forecast is that its earnings per share will come in at $0.69 per share and $5 billion in predicted revenue. This ecommerce giant did handily best the EPS estimate in the prior quarter, though the latest estimate has slipped by a penny in the past 30 days.

The forecast from 157 Estimize respondents sees EPS from the Hangzhou-based company coming in at $0.74. The consensus revenue estimate for the three months that ended in September is $5.2 billion. However, Estimize, like Wall Street, underestimated Alibaba's earnings in the previous quarter, and it underestimated revenue in the previous three periods.

Facebook

Wall Street's consensus forecast for Facebook is for EPS to have climbed more than 41 percent from the same period of last year to $0.97, though that would be the same as the EPS (a sizable beat) posted back in the second quarter. The 427 Estimize respondents are more optimistic, with an estimate of $1.03 per share for the period that ended in September.

Like Wall Street, Estimize has underestimated Facebook's revenue in recent quarters, and this time the respondents are looking for $7 billion. That would be around 54 percent higher than in the year-ago period. Wall Street is a bit more conservative with its consensus forecast of $6.9 billion. The Estimize forecasts for the top and bottom lines would be the highest results in the past eight quarters.

Alibaba is scheduled to report its latest results before the opening bell on Wednesday, followed by Facebook after trading concludes on the same day.

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