What to Watch this Week: Electric Cars, Earnings and Eccentrics
There's never a dull moment on Wall Street. Let's go over some of the items that will help shape the week that lies ahead.
1. Game Off: Diehard gamers will be crunching numbers instead of virtual opponents as the country's two largest video game makers report their latest quarterly results.
It's been a rough three years for the industry, as software sales have been sluggish despite cheaper console and handheld prices. For the first time in ages, video game retailer GameStop (GME) plans to close more stores than it opens this year.
It shouldn't come as a surprise to find that Activision Blizzard (ATVI) and Electronic Arts (EA) are expected to post lower quarterly profits than they did a year ago.
Activision Blizzard may be hopeful that next week's release of Diablo III will turn things around. If that doesn't pan out, the world's leading video game maker just announced Nov. 13 as its release date for Call of Duty: Black Ops 2.
2. Static for Satellite TV?: You may not have noticed it while you were hunting under the couch cushions for the remote control, but we're experiencing a revolution in the way that we consume video.
The popularity of streaming sites -- on PCs, smartphones, and tablets -- is booming. Traditional cable and satellite television providers are trying to keep subscribers entertained, but it's going to be a challenge to keep folks paying top dollar for a catalog of channels that go largely unwatched.
The two biggest providers of satellite television, DISH Network (DISH) and market leader DirecTV (DTV), are reporting this week..
DISH has struggled in recent years, even as it positions its cost-effective service. DirecTV, on the other hand, has made the most of its exclusive deal with the NFL to offer complete league coverage through its NFL Sunday Ticket package.
DirecTV has also successfully attracted millions of satellite TV customers in Latin America. The divergence between the two companies isn't lost on Wall Street. Analysts see DirecTV growing its profitability, while DISH Network is expected to post lower earnings this time around.
3. Burton and Depp, Together Again: The big movie opening this week is Dark Shadows, reuniting Johnny Depp with eccentric director Tim Burton.
The reboot of the old television show isn't likely to overtake Marvel's The Avengers in ticket sales this week. However, the growing number of potential blockbusters bodes well for multiplex operators that had a horrendous 2011 in terms of ticket sales.
4. Electric Cars Are Just Getting Started: It's been a rough year for environmental activists who figured there was a conspiracy to keep electric cars off the road.
They're here. Where are the buyers?
The Leaf and Volt haven't exactly sold in impressive numbers, and the Volt factory has even had occasional factory closure holidays so supply doesn't exceed uninspiring demand.
All of this could change pretty quickly, of course. Other automakers have plug-in models ready to hit showrooms this year. The recent spike in gasoline prices is a great form of free advertisement for electric vehicles.
It's under this backdrop that Tesla Motors (TSLA) pulls up for its quarterly checkup.
The American maker of upscale electric cars attracted the wrong kind of headlines when some of its car batteries stopped working. This is a pretty big deal since the batteries required for electric cars weigh more than a ton and cost thousands of dollars to replace.
Tesla's currently losing money, and more of the same is likely when it reports on Wednesday. The reason to get excited about Tesla is that the rollout of the company's Model S sedan is now just weeks away. Unlike its expensive original Roadster, the Model S is now priced in five digits instead of six.
5. Price the Friendly Skies: Trip Advisor (TRIP) and Expedia (EXPE) posted blowout quarterly results last week, and this will naturally lead investors to expect a strong report out of priceline.com (PCLN) on Wednesday.
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The "name your own price" portal probably was looking at a strong quarter anyway. Priceline has routinely been growing faster than its travel website peers, and Wall Street's looking for a profit of $3.94 a share -- well ahead of the $2.66 a share it rang up a year earlier.
There may be concerns of the travel industry slipping if the global economy retreats. Europe is still a hot mess. However, Priceline was able to ascend even when the recession was at its bleakest.
Buckle up, investors.
Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of GameStop. The Fool owns shares of and has written calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Activision Blizzard, Tesla Motors, and priceline.com; writing covered calls on GameStop; and creating a synthetic long position in Activision Blizzard.