5 Things to Watch This Week: Pop, Streams, Mickey Mouse, Wireless, and DVDs
There's never a dull moment on Wall Street, especially now that the market is hitting multiyear highs. Let's go over some of the news that will help shape the week that lies ahead.
1. Cola wars: Pop goes the world this week as both Coca-Cola (KO) and PepsiCo (PEP) crack open their quarterly results.
Coke comes first -- and not just in market share -- with its report tomorrow. The Pepsi pourer follows two days later.
It's not just about carbonated fizz for either company. Both have broadened their portfolios over the years to include energy drinks, juices, and premium water. PepsiCo also owns Frito-Lay, the salty snack leader that saw a fair deal of play during Sunday's Super Bowl.
Analysts see both companies posting improved profitability.
2. Netflix brushes up on its Norwegian: Netflix (NFLX) officially dives into original programming this week with the debut of Lilyhammer.
The show stars Steven Van Zandt as a mobster sent to Norway as part of the witness protection program. The trailer looks promising.
Netflix is taking a fresh tack with this streaming show. Instead of stringing viewers along for the next couple of months with the first season's eight episodes, Netflix is making them all available right away.
"Netflix's brand for TV shows is really about binge viewing," CEO Reed Hastings explained during last month's conference call. "It's the ability to just get hooked and watch episode after episode. It's addictive. It's exciting. It's different."
Indeed. Logically one would think that it may be in Netflix's best interest to stretch this out over eight weeks, allowing viral momentum to build for the series. However, Netflix doesn't believe that folks will sign up -- hit all eight shows quickly -- and cancel the streaming service.
"We're not particularly focused on a single show for driving retention," Hastings said. "It's the expectation of more and more shows that really drives retention."
3. Mouse ears: Are you invested in a Mickey Mouse company? Disney (DIS) checks in with its fiscal first-quarter results Tuesday.
Disney's a steadier producer than you may think. Sure, its theme parks are susceptible to soft economies. If a movie bombs at the corner multiplex -- the way that Mars Needs Moms did last year -- the media giant will feel the pinch.
However, the steady trickle of cable revenue from its Disney Channel and ESPN juggernaut help smooth out some of the volatility elsewhere. Wall Street is banking on a profit of $0.71 a share out of the house of mouse, just ahead of the $0.68 a share it posted a year earlier.
4. Sprinting to the finish line: Which of the three largest wireless carriers is still offering unlimited data plans? Which of the three largest wireless carriers hasn't turned a quarterly profit in years? The answer's the same to both questions: Sprint Nextel (S).
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Sprint reports on Thursday, and it's no surprise to see analysts bracing for a widening deficit. The company has struggled to post a profit before, and it's not going to get any easier now with the low margins that accompany the iPhone given the meaty subsidization.
However, we need Sprint around to keep the other wireless giants honest. As long as Sprint is out there offering unlimited data plans on new accounts, there will be a limit on how much Verizon Wireless and AT&T (T) can charge for their smartphone plans.
5. Disc jockeys: One of the more intriguing quarterly reports this week will be Coinstar's (CSTR) results tomorrow.
Coinstar operates its namesake machines, which offer gift cards in exchange for your loose change, but its bigger business over the past couple of years has been its Redbox kiosks.
If you're not a Redbox customer, you've probably still seen them. Coinstar populates the entrances of busy stores with these automated kiosks that offer DVD rentals for just $1.20 a night.
Netflix lost more than 2 million DVD plan subscribers in the fourth quarter, and it will be interesting to see whether many of them switched to Redbox or Blockbuster for their DVD rental needs, or if they simply moved on from optical disc consumption.
After several years of growth, Wall Street sees Coinstar's profitability actually slipping a bit in tomorrow's report.
If this movie has a happy ending, Coinstar better serve it up soon.
Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article, except for Netflix and Disney. The Motley Fool owns shares of Coca-Cola and PepsiCo. Motley Fool newsletter services have recommended buying shares of Netflix, PepsiCo, Coca-Cola, and Walt Disney. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo.
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