Christmas Week's Earnings Repertoire

Last week was marked by Fed's decision Wednesday to accelerate the end of quantitative easing and to pencil in three interest-rate increases for next year. Fed Chairman Jerome Powell also warned that high inflationary rates will persist.

Recent earnings results from FedEx, which is often regarded as a gauge of global economic activity, suggest spending and business activity are improving. During this shortened week, we will see if the so-eagerly awaited "Santa Claus Rally" will finally emerge, along with earnings reports from Micron Technology Inc MU, Nike Inc NKE, and Blackberry Limited BB.

Micron Needs to Show Confidence in Future Prospects of Its Business

On Monday after the close, Wall Street expects Micron to report it earned $2.11 per share and generated $7.67 billion in sales.  The stock fell 10% year to date, widely underperforming both the tech sector as well as the 24% rise in the S&P 500 index as investors still didn't form their opinion on demand prospects of memory chips. More precisely, NAND and DRAM chips are used for smartphones, power cloud computing, AI, and 5G. Therefore, management's 2022 guidance is perhaps even more important than the reported results as investors want to see they are confident about the future of the memory chip business.

Supply Chain Challenges Cannot Really Hurt Nike

After the close, Wall Street expects the sports apparel king to report it earned 63 cents per share and generates $11.25 billion in sales during its fiscal second quarter. Despite its shares falling more than 5% over the last month, Nike's operational excellence is indisputable. As its peers, it is dealing with supply chain disruptions with lower inventories that result in fewer promotions and increased e-commerce adoption. Most importantly, the demand for its products is as strong as ever with the pandemic only strengthening the consumers' wellness trend. The sports apparel retailer only needs to continue doing what it has been doing over the past several quarters and show why it is one of the best-performing brands in its sector, always ahead of others as it already applied for patents to get into the metaverse and bought into NFTs.

Blackberry is in Desperate Need for Some Good News

On Tuesday after the close, Wall Street expects to see a loss of 7 cents per share with $177.25 million in sales, a worsened image compared to last year's comparable quarter when the company earned 2 cents per share on revenue of $224 million. Lack of execution and management's poor capability to generate cash that the company desperately needs have resulted in frustrated investors as shares fell 32% over the last half of a year.

The company's largest business, the Enterprise Software Services segment, is struggling for a while now, as is its QNX business. During the latest reported quarter, the company saw its licensing and IP revenues plummet as much as almost 90% YoY, with $175 million in revenue that rose only $1 million from the previous quarter. The company's transition to becoming a software and services specialist doesn't seem to be on track. However, things could turn in its favor with increasing demand for cybersecurity and the reviving auto industry which would boost its QNX business. But, investors will want to see proof of improvement on these fronts, along with better fundamentals.

Markets will be closed on Friday as Christmas Day falls on Saturday.

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