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5 Tech Earnings to Watch This Week (MSFT, NFLX, YHOO, IBM, INTC)

By U.S. News & World Report

The first-quarter earnings season, which started last week with the big banks, gets into full swing this week, led in part by a host of blue-chip tech companies.

And the tech sector certainly is hoping it will fare as well as the major financials did last week.

The Standard & Poor’s 500 index’s companies are broadly expected to have a miserable first-quarter earnings season, with corporate earnings set to fall 7 percent from a year ago. The two sectors expected to lead that drive into the ground are financials and technology, at losses of 7 percent and 5 percent, respectively. However, while the banks did mostly report declines, three of the “Big Four” managed bottom-line beats, leading to a couple of booming days for the sector.

[Read: 8 Tips to Create Income From Rental Property.]

These five stocks report this week and can only hope for similar results:

International Business Machines Corp. (ticker: IBM). The name of the game at IBM is “shrinking” — as in shrinking revenues, shrinking earnings and shrinking headcount. IBM is expected to report a first-quarter earnings drop of 28 percent on revenues that are expected to slide 7 percent, which would extend IBM’s streak of sales declines to 16 consecutive quarters. And that fall in profits is what’s expected to fuel the company’s disappointing 2016 outlook; last quarter, IBM’s announcement that it expected operating earnings of $13.50 per share was well shy of the consensus estimate of $15.

IBM’s weapon for fighting off its sluggishness? Layoffs — and lots of ’em. IBM has reportedly shed roughly as many people (70,000) as it hired last year, according to Business Insider, and the losses are continuing this year, with the company last month continuing a round of “massive” layoffs.

Investors looking for actual avenues of growth, rather than IBM just cutting its way to success, should be focused on IBM’s analytics and software-as-a-service businesses, among others, which are increasingly becoming a bigger part of the company’s story. According to CEO Ginny Rometty, last year, “our strategic imperatives of cloud, analytics, mobile, social and security grew 26 percent to $29 billion and now represent 35 percent of our total revenue.”

IBM reports earnings after the closing bell Monday.

Netflix (NFLX). While Netflix is set to announce a slight decline in earnings for the first quarter, the real story is the expected 25 percent boost to revenues thanks to the company’s massive international expansion efforts.

International growth impressed analysts during Netflix’s fourth quarter, and the company’s global push was expected to help tack on an additional 6 million total subscribers during Q1. That seemed all the more likely in early January, when the company announced it launched in 130 new countries, bringing its country count to more than 190. In fact, a Goldman Sachs analyst sees NFLX topping that 6 million figure, with an expected 4.4 million international adds and 1.8 domestically.

Netflix also has pushed the pedal on original programming, with a Morgan Stanley survey saying the company is the “original programming front-runner,” at 29 percent of the vote, leading HBO, which declined drastically to 18 percent. Netflix has ramped up original content spending as an alternative to rising costs for acquiring content elsewhere, but the company also believes viewers will watch original content for longer and more often. So, look for more news on this front — but also about where costs for original programming are headed.

[Read: Do Actively Managed Funds Really Pay Off for Investors?]

Netflix did make headlines recently about existing customers’ high-definition rates being hiked to $9.99 per month to meet new-subscriber pricing, but that won’t take effect until May, and thus it won’t be a factor in this quarter’s earnings. Netflix reports earnings after the closing bell on Monday.

Intel Corp. (INTC). In 2015, Intel’s core unit saw its computer chip business slump 8 percent from the previous year, thanks in large part to a decline in overall PC sales, which was pegged at -8 percent to -10.6 percent. Well, that weak PC trend isn’t going anywhere; Gartner says PC shipments declined 9.6 percent in this year’s first quarter, marking the sixth consecutive quarter that the metric has fallen.

That’s the bad news.

The good news, though, is that Intel is expected to report plenty of good news in Q1 regardless. Profits are expected to improve 17 percent on an 8 percent uptick in revenues, thanks in part by continued growth in its data center business, as well as the add-on business from its 2015 purchase of Altera.

But the biggest thing that anyone following Intel will want to pay attention to is INTC’s new reporting structure, which will involve the following operating segments: client computing group, data center group, Internet of Things group, Intel security group, new technology group, non-volatile memory solutions group and programmable solutions group. Intel reports earnings after the market’s closing bell Tuesday.

Yahoo! (YHOO). Yahoo is certainly a big tech stock, and it’s certainly reporting earnings this week, but profits will hardly be the primary focus of this particular announcement.

For the record, Yahoo projected some truly hideous numbers for the current quarter, including operating income that could range from a $50 million loss to a $30 million gain. Analysts believe adjusted earnings will tumble from 15 cents per share in the year-ago period to 7 cents — an increasingly common result that has put CEO Marissa Mayer’s feet to the fire. Her merger and acquisition track record in particular has been called into question, as the company wrote down more than $1 billion in goodwill related to Mayer acquisitions.

[See: 7 Ways to Tell if a Stock Is a Good Price.]

Mergers will be the hot topic of this quarter’s report — but this time, people will be looking for news about Yahoo not as the predator, but the prey.

The lineup of potential suitors is almost comically large. Among those believed to have interest — whether it’s for a total buyout of Yahoo, or just pieces of the business — are Alphabet (GOOG, GOOGL), Microsoft Corp. (MSFT), Verizon Communications (VZ), Time (TIME), KKR & Co. (KKR) and the Daily Mail. If anything is likely to move shares on Wednesday morning, it will be news on this front.

Yahoo reports earnings after the closing bell Tuesday.

Microsoft Corp. Microsoft’s expectations for the quarter aren’t much to be jazzed about, with analysts predicting MSFT stock will see earnings at 5 percent on less than 2 percent revenue growth. Much like Intel, Microsoft can thank a shrinking PC market for its tepid estimates.

One factor that could help Microsoft hurdle over estimates is a suddenly weak U.S. dollar. The U.S. Dollar index declined roughly 5 percent during the first quarter, which is good news for multinationals like Microsoft, which derives more than half of its revenues from outside the U.S. A weaker dollar not only helps make Microsoft’s products a little cheaper in foreign countries, but it also is favorable for currency conversion back into dollars when the company reports its revenues.

Also watch for continued strong results in Microsoft’s cloud offerings … though maybe not as strong as Azure’s 127 percent revenue boom last quarter.

Microsoft reports earnings after the closing bell Thursday.

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5 Tech Earnings to Watch This Week (MSFT, NFLX, YHOO, IBM, INTC) originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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