5 Things to Watch: Tea, DVRs, 3-D, Watches, and Tiny Cameras
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. Tea for more than just two: Hot coffee-bean water has taken off. Now it's time to see if brewed tea leaves can be just as popular.
Starbucks (SBUX) pioneered the stateside movement for premium coffee. A cup of Joe wasn't just something that cost pocket change at a diner. It became a drink that could be improved upon as a fashionably upscale beverage served in a European-style coffeehouse.
Now it's time for tea to shine.
Teavana (TEA) has been opening up its aromatic shops in high-end malls around the country, offering 100 different varieties of exotic loose teas in colorful canisters. The retailer also sells artisanal tea-making gear and actual servings of high-end tea, but its bread-and-butter business is selling its tea leaves to encourage a tea-sipping culture that seems to have lost its way during the java revolution.
Teavana went public at $17 last year, and that's pretty much where it finds itself now as it gears up for its quarterly report Wednesday. Analysts see a healthy profit, but investors will be equally interested in store-level sales and any update to the company's expansion plans.
2. Zapping ads and taking names: There aren't a lot of people that truly enjoy sitting through television commercials. Sure, the ads get plenty of attention during the Super Bowl when companies unveil big-budget spots, but the sponsored segments are typically simply tolerated as the price we have to pay for enjoying free TV.
DISH Network (DISH) turned heads earlier this month when it introduced a premium-priced DVR that zaps ads altogether. Instead of visually fast-forwarding through ad breaks on recorded shows the way VCR and TiVo (TIVO) owners have for years, DISH's new box jumps right over them.
The major networks obviously didn't like the move. Fox, NBC, and CBS are all suing the country's second-largest satellite television provider, according to Hollywood Reporter.
It will be a compelling legal squabble, but keep an eye on TiVo. The company that pioneered the movement with the digital video recorder reports Wednesday. Analysts see a modest deficit for the quarter, but you can be sure that at least one analyst will ask about DISH's new box during the call.
3. Not a pretty picture: TiVo was an early arrival in a booming niche, but hasn't been able to enjoy the current popularity of DVRs -- outside of its patent-licensing deals -- given the cutthroat nature of the market.
Well, the same thing can be said about OmniVision (OVTI). The maker of image sensors seemed to be in the driver's seat of a booming industry when smartphones, laptops, and tablets began offering decent-quality cameras in their products.
Things were great at OmniVision for a couple of years, but now -- when smartphones and tablets are as popular as they've ever been -- the company is struggling. When OmniVision reports on Thursday Wall Street is ready for a better-than-20% drop in revenue. They also see the company earning just a third as much as it did during the same quarter a year earlier.
4. Time out: After watching shares of trendy watchmaker Fossil (FOSL) crumble earlier this month after posting disappointing financial results, investors could've been nervous heading into Thursday's report out of high-end watch specialist Movado (MOV).
Thankfully, Movado put investors at ease a couple of days ago. It announced preliminary results ahead of an analyst conference, letting the market know that sales climbed by a better-than-expected 15% and that operating margins widened nicely. The stock raced higher on the news.
I guess you can call that a -- wait for it -- timely update.
5. Now in 3-D: RealD (RLD) is another company getting ready to report. RealD is the country's leading outfitter of 3-D systems for movie theaters around the country. After a disastrous 2011 for multiplex operators, exhibitors are enjoying a very strong 2012 and selling marked-up 3-D versions of action and kids movies is a big part of that.
Pass the popcorn, please.
Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Fossil, Movado Group, and Starbucks. Motley Fool newsletter services have recommended buying shares of Fossil and Starbucks. Motley Fool newsletter services have recommended writing covered calls on Starbucks and shorting Fossil.