Key Earnings Reports to Watch as Trump Returns to the White House

While the market will undoubtedly focus on former President Donald Trump’s return to the White House, the upcoming week also marks a critical point in the earnings season, with several major companies scheduled to report. Investors will be keen to understand the potential impact of Trump’s policies, particularly concerning trade tariffs and tax cuts, alongside assessing the financial performance of these key players.

This week offers a dual narrative: the political landscape and its potential economic ramifications, and the ongoing earnings season providing insights into corporate health and future prospects. Let’s delve into the key companies set to report this week and what to expect from their announcements.

Netflix (NFLX) – Q4 Earnings (Tuesday, January 21st)

Netflix is scheduled to report its fourth-quarter earnings after the market closes on Tuesday. Analysts predict earnings per share of $4.21 on revenue of $10.1 billion, representing a 15% year-over-year increase. The company’s 2025 forecast will be under scrutiny, particularly after a recent shareholder letter highlighted key upcoming content, including Squid Game Season 2, a potential Jake Paul vs. Mike Tyson boxing match, and live NFL games.

Market observers will be watching for signs of a share price rebound after a weak start to the year. AJ Bell analysts note that rising US Treasury yields and high expectations, with the stock trading at approximately 35 times consensus earnings estimates for 2025, have contributed to recent share price weakness. However, strong cash flow, estimated at $8.5 billion in net debt, allows Netflix to invest heavily in content and technology, potentially solidifying its competitive position and facilitating share buybacks. In the first quarter alone, Netflix repurchased $1.7 billion of its stock, bringing the 2024 total to $5.3 billion with one quarter remaining. This compares to a total of $6 billion in share buybacks in 2023.

United Airlines (UAL) – Q4 Earnings (Wednesday, January 22nd)

United Airlines’ fourth-quarter earnings, due Wednesday, are highly anticipated after the company exceeded expectations in Q3, leading to a surge in airline stocks. In October, United reported adjusted earnings of $3.33 per share, surpassing the Bloomberg consensus estimate of $3.07, and operating revenue of $14.84 billion, exceeding the Wall Street estimate of $14.72 billion. A $1.5 billion share buyback announcement further bolstered investor confidence.

Industry experts suggest that strong travel demand and operational efficiency have contributed to United’s success. Loyalty programs are also playing a crucial role in enhancing competitiveness against low-cost carriers. Furthermore, United’s existing fleet size and capital expenditure strategy mitigate potential disruptions from Boeing’s production challenges. Investors will be looking for continued strong performance in the fourth quarter.

Burberry (BRBY.L) – Q3 Trading Update (Friday, January 24th)

Burberry will release its third-quarter trading update on Friday, amidst a challenging environment for luxury brands. The sector has faced headwinds from rising living costs and an economic slowdown in China, impacting consumer spending. Burberry’s first-half results reflected this trend, with a 22% decline in sales to £1.09 billion and an adjusted operating loss of £41 million.

However, November saw the unveiling of a turnaround plan under newly appointed CEO Jonathan Akeroyd. Analysts are keen to assess the plan’s progress and any signs of recovery. Focus will also be on inventory levels, which stood at £596 million at the end of September 2024, up from £526 million the previous year. High inventory levels raise concerns about potential discounting and further pressure on margins. Commentary on the crucial festive trading period and the overall macroeconomic outlook will be closely watched.

EasyJet (EZJ.L) – Q1 Results (Wednesday, January 22nd)

EasyJet is set to announce its first-quarter results on Wednesday, following a strong finish to its 2024 fiscal year. The company reported a 34% increase in annual headline profit before tax, reaching £610 million, and a record profit for its EasyJet holidays business. A dividend increase to 12.1p per share, more than double the previous year’s payout, further signaled confidence.

For 2025, EasyJet projected reduced winter losses, significant first-quarter improvement, a 3% capacity growth, and a 25% increase in EasyJet holidays customers. Analysts anticipate updates on these projections and insights into the impact of lower fuel costs on margins. The performance of the package holiday segment and the leadership transition to new CEO Johan Lundgren will also be key areas of interest.

JD Wetherspoon (JDW.L) – Q2 Trading Update (Wednesday, January 22nd)

JD Wetherspoon’s second-quarter trading update, expected on Wednesday, will be released against a backdrop of rising costs for UK businesses following the autumn budget. Increased minimum wage and national insurance contributions are putting pressure on the hospitality sector. Chairman Tim Martin previously warned of substantial cost inflation and the likelihood of price increases across the industry.

Despite these challenges, the company reported nearly 6% like-for-like sales growth in the first quarter and expressed confidence in a reasonable outcome for the year. Investors will be looking for evidence of continued momentum during the holiday season and updates on the company’s expansion plans, focusing on high-footfall locations. Performance of new sites and the overall impact of rising costs will be crucial factors to watch.

Conclusion: A Week of Dual Focus

This week presents a unique scenario for investors, demanding attention to both political developments and corporate earnings. Trump’s return to the White House introduces uncertainty regarding future policies and their economic consequences. Simultaneously, earnings reports from major companies like Netflix, United Airlines, and Burberry provide crucial insights into specific sectors and the broader economic landscape. Careful analysis of both narratives will be essential for informed investment decisions. For more comprehensive earnings calendar information, visit Yahoo Finance.