3 Earnings Reports To Watch This Week

Last week was the second straight weekly drop following all-time highs reached during the first days of September. Both the Dow Jones Industrial Average and the S&P 500 shed more than 2%, while the tech-heavy NASDAQ had its worst week since March as it fell 4.1%.

Even Big Tech tanked. Facebook Inc FB and Amazon.com Inc AMZN each lost more than 5%. Apple Inc AAPL and Netflix NFLX slid even more, each falling around 6%, while Alphabet Inc GOOGL GOOG and Microsoft Corporation MSFT were both down more than 4%.

But the biggest drop was in Tesla Inc TSLA whose stock plunged 10.9% after it was announced the company would not be included in the S&P 500. One of Tesla's biggest competitors, Nikola NKLA also was front and center, as the company announced a partnership with General Motors GM and two days later was the subject of a short report from Hindenburg Research, who accused the company of fraud.

Nikola claims the accusations are false and misleading and announced Monday it will be cooperating with SEC to set the record straight.

Looking ahead to this week, a few popular stocks will announce earnings results over the next few trading days. Analysts are expecting good news from Adobe Systems ADBE, FedEx Corporation FDX, and Progressive Corp PGR.

Adobe- How Will Work From Home Benefit Them?

Just like other software providers that benefited from more people working from home, the digital media tool specialist has enjoyed a great demand boost during the pandemic. During its fiscal Q2 that ended in May, revenues expanded 14%, and another 11% increase is expected to be reported on Tuesday.

Moreover, investors will be keeping an eye on recurring subscription revenue, which recently accounted for over 90% of its total sales base. Another major financial trend to keep an eye on is operating income, which increased from $750 million to $1 billion in one year. Besides its market-thumping performance in 2020, all eyes are on the company's outlook for the fourth quarter. Adobe has been forecasting a slight growth acceleration quarter to quarter.

FedEx- Is The Package Delivery Giant Ready For The Holiday Season?

Also on Tuesday, investors will be looking for some good news from the package delivery giant. FedEx shares have managed to outperform the market since its last report, as soaring residential-delivery demand has managed to offset the dramatic drop in commercial deliveries during the first days of the pandemic. Its rival, UPS UPS has also benefited from the consumer stampede towards e-commerce. Now, the question is where the company has room to raise prices, which would be the easiest way to improve operating margins and ensure robust shareholder returns. Both transporters are gearing up for the peak holiday season and the expected annual increase in package volume this year.

Progressive – Did Sales Growth Persevere?

On Thursday morning, Progressive's auto-focused insurance business is expected to have benefited from a sharp drop in driving hours and travel time in the early phase of the pandemic. These unexpected lockdown-related trends contributed to reduced payouts and expenses during the spring. Moreover, during this time premiums continued to grow. Now, after the July's 10% boost in net premiums, the question is whether there was a reversal of these trends as the economic recovery picked up in the quarter that covered August. Declining expenses are not as likely to have persevered, so all hope lies in robust sales growth. It remains to be seen if the company's improving earnings profile is headed to become a dependable dividend provider.

Outlook

Markets are struggling in an effort to find an equilibrium. By the looks of it, the near future will be shaped by uncertainties that are bound to result in more struggle between buyers and sellers. But, if 2020 can be defined in one sentence, it would be to expect the unexpected. The above stocks could be the source of this week's positivity.

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