5 Things to Watch This Week: Disney, Pandora, Taxes, Staples, and Facebook
From the country's leading social networking website introducing a new site redesign to the leading digital music service explaining why it's capping usage, there will be plenty of news waiting to break in the coming days. Let's go over some of the items that will help shape the week that lies ahead on Wall Street.
1. Feeding the News Feed: Facebook (FB) is a company that never stands still, and on Thursday it's hosting a media event to introduce changes to the way it handles the popular news feed.
Just as Facebook held a press event earlier this year to explain its new Social Graph feature, the leading social networking website operator wouldn't be troubling tech bloggers and stock analysts with an invitation to something if it wasn't a potential game changer.
Investors will wonder if the enhanced news feed will offer easier monetization, though Facebook's more than 1 billion active users will just want to know if the new platform will improve the usability experience.
2. That Was Easy: The merger of Office Depot (ODP) and OfficeMax (OMX) turned heads two weeks ago, but how does the industry leading office supplies retailer feel about the deal?
The market may find out this week as Staples (SPLS) steps up on Wednesday with its quarterly results.
The superstore chain has struggled with uninspiring Corporate America growth and an even uglier entrepreneurial mood in Europe, but it's likely to view the combination of two lesser players as a good thing.
Sure, the combination will make the merged company stronger. However, having one less rival chain out there should translate into fewer price wars for Staples. In the end, that's the real victory here.
3. It's a Taxing Dilemma: The tax filing season is under way, and H&R Block (HRB) lives for this time of year.
The country's leading tax preparer will post its latest quarterly results on Thursday, and the market will be hanging on its every word when it offers a glimpse on the current quarter.
H&R Block actually loses money during the other three quarters combined. It is the current quarter -- the fiscal fourth quarter that concludes at the end of April -- that features the meaty April 15 filing deadline.
This tax filing season got off to a bumpy start -- delayed by a couple of weeks in January as a result of the fiscal cliff standoff. Some forms aren't even being made available until this month.
Confusion and uncertainty usually work out well for H&R Block. Tax code changes and obstacles are the things that get folks to pay up for a professionally prepared return. We'll see if H&R Block can take advantage.
4. Disney Doesn't Want Quiet on the Set: It's a big week for Disney's (DIS) studio business. "Wreck-It Ralph" -- the popular animated feature film about characters in a video game -- hits DVD, Blu-ray and digital download markets on Tuesday. The film fared well at the box office last year, so it should be popular at the retail level.
On the big screen, Disney takes a big budget gamble with "Oz The Great and Powerful." The movie builds on "The Wizard of Oz," featuring a star-studded cast. Sam Raimi is directing, so a lot of people that wouldn't normally see this movie may still be interested given Raimi's past successes.
The two big releases this week are more important than you think. Sure, Disney's a media giant, but of the family entertainment behemoth's five divisions, Disney's studio was the only one to post declines in revenue and operating profits last quarter.
Disney hopes that it's building a yellow-bricked road paved of gold with these two events.
5. Cracking Open the Pandora Box: Digital music has been a booming business, but it hasn't been very lucrative for the leading streaming service.
Pandora Media (P) has had pockets of profitability, but analysts see another year of losses this new fiscal year.
The music discovery service is hoping to change its fate by turning more of its freeloaders into paying subscribers. Pandora announced last week that it will cap usage of its free ad-supported service to 40 hours a month. Music buffs will have to pay a small fee at that point.
Pandora reports on Thursday. Analysts actually see a profit this quarter, but after a sequential dip in active listeners during the month of January and last week's move to limit free access the market will have plenty of questions for Pandora.
Motley Fool contributor Rick Aristotle Munarriz owns shares of Walt Disney. The Motley Fool recommends Facebook and Walt Disney. The Motley Fool owns shares of Facebook, Staples, and Walt Disney. Try any of our newsletter services free for 30 days.
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