Companies Reporting: Diageo, Microsoft, Amazon

Here’s our regular look at the FTSE 350 and a selection of other companies reporting from 29 July – 2 August 2024.

• When will Microsoft’s AI copilot rollout start to yield results?
• Diageo hoping to serve up a strong finish to the year
• Cloud growth in focus for Amazon

Microsoft, Q4 results, Tuesday 30 July

Matt Britzman, senior equity analyst, Hargreaves Lansdown: Microsoft NASDAQ:MSFT is set to deliver fourth-quarter results next week. Investors will be hoping to see another strong showing from the cloud business, Azure. Analysts are looking for top line growth of 19.5% from Azure, which looks very achievable. Back in April, management said cloud-AI demand was outstripping supply. Despite a mammoth effort to build out compute, that supply/demand imbalance is likely to help underpin Azure growth for some time yet.

There is, of course, more to Microsoft than cloud. Eyes will be on how some of the software business lines are performing given the SaaS (software as a service) market has been softer of late. The rollout of tools, like copilot, is underway, but large-scale adoption will likely take some time.

• What we learned from last week’s Big Tech earnings marathon

Diageo, full year results, Tuesday 30 July

Aarin Chiekrie, equity analyst, Hargreaves Lansdown: Diageo LON:DGE served up an underwhelming set of results back in January, as the group measured a small revenue decline in the first half. Performance was held back by a weak showing in its Latin America and Caribbean region, where sales dropped 23% as customers consumed less and switched to cheaper alternatives. Because this region’s one of the group’s higher-margin markets, it meant group operating profits fell more than 5% in the first half. An improvement in conditions here will be key to improving investor sentiment.

In next week’s results, analysts expect to hear that trading across Diageo’s other regions has fared better. Strong brands like Guinness, Tanqueray and Don Julio Tequila should let the group push through price hikes and help offset most of the impact of weaker volumes. Despite this, markets are still expecting to see revenue and operating profits fall 1% and 5% respectively.

Amazon, Q2 results, Thursday 1 August

Matt Britzman: As ever, all eyes will be on cloud growth at AWS when Amazon NASDAQ:AMZN reports second quarter results. At the group level, net sales are expected to grow 7-11% year-on-year and reach $144-149bn. For AWS specifically, investors will want to see that the reacceleration of growth over the first quarter wasn’t a one-off. AWS has a leading market position in everything data-related, so it should be well-placed to capture a huge chunk of the demand coming from the AI wave.

There was also a strong showing from both the e-commerce and advertising segments over the first quarter, something investors will be keen to see continue. But markets were a little unhappy with the second-quarter profit guidance of $10-14bn, anything toward the top end of that range would be well received.

• What we learned from last week’s Big Tech earnings marathon

This article has been brought to you in association with Hargreaves Lansdown. All opinions expressed in this article are from the analysts and do not necessarily represent the opinions of The Armchair Trader.

FTSE 100, FTSE 250 and selected other companies scheduled to report