When Snap Inc. last reported revenue, the main concerns were the re-editing of Snapchat and a diminishing user base.
Oh, what innocent time.
During the first month of 2019, Snapchat caught up
SNAP, + 0.29%
experienced two controversial leadership disputes that raised questions about the stability of the young app company. The new professional finance manager – Tim Stone, who was poached from Amazon.com Inc. – suddenly left the company, and Bloomberg News later reported that he left after trying to bypass CEO Evan Spiegel by going to the board and asking for more power and a higher salary.
Stone introduced financial forecasts on Snap and generally reinforced the company's opinion on Wall Street. It took Snap two weeks just to mention a temporary replacement at the CFO, which it finally did last week by putting over accountant Lara Sweet into the role temporarily.
Just three days after Stone announced his departure, the leader of Snap's human resources department and Global Security Director left the scandal. According to The Wall Street Journal, Security Manager Francis Racioppi claimed a six figure contractor with whom he had a romantic relationship and terminated the contract after they broke up. Racioppi boss, HR manager Jason Halbert ̵[ads1]1; who had already been a source of controversy – was also pushed out for the incident, according to the journal's sources.
These events broke concerns about Snap's ability to build a strong leadership team around Spiegel back into the light. When Snap reports fourth quarter earnings on Tuesday afternoon, Spiegel will stage the conference call and be able to cope with these doubts, defend his manager of Snap and get a doozy of a conference call.
Then again he could just stick to Android app updates and how Snap will continue to make more money out of a smaller user base.
"The management's turnover has collected all the latest headlines for Snap, but we" do not expect much comment on the latest departures, "wrote Nomura Instinet analysts in a preview." We expect the company to focus on Android redesigned, something which, in our opinion, is one of the most important issues facing the company, and we expect that there will be plenty of comments on the newer ad formats, such as Pixel. "
What to expect?
Earnings: Analysts in On average, Snap expects to report a loss of 19 cents per share, an improvement from a loss of 28 cents per share a year ago, according to FactSet, after adjustments, analysts expect a loss of 7 cents per share. estimates by analysts, fund managers and academics predict a loss of 7 cents per share.
When Snap announced Stone's resignation, it revealed that executives "expect to report revenue and adjusted Ebitda results that are slightly favorable to the top of our previously reported quarterly guidance areas for each. "The company said in the latest earnings report that it expected an Ebitda loss of $ 75 million to $ 100 million.
Revenue: On average, analysts expect revenue of $ 377 million, according to FactSet, after reporting $ 286 million for One year ago, Snap guided revenues of $ 355 million to $ 380 million, contributing estimates estimated to amount to $ 376.2 million on average
Stock Movement: Despite downgrades and concerns after Stone's resignation, Snap has had a strong month in profit, with a gain of 16.5% over the last month, from Monday's close as the S&P 500 index
SPX, + 0.68%
received 7.6%. Nevertheless, the stock is down at 49.5% over the past year and well off the original public offer price of $ 17 per share.
Which analysts say
The Nomura preview noted that the social media level Facebook Inc.