Spectrum WealthManagement, which owns the stock of technology company Littlestone Technologies, is set to report earnings Thursday that are likely to be among the best in the S&P 500.
The company’s earnings will be its second-best ever in a single-day period, according to analysts, thanks to an increase in revenue of nearly 9% to $10.6 billion.
Spectrum also expects to sell another $2 billion of debt, and is forecasting revenue growth of about 10%.
Spectrum has generated more than $5.6 million in profits since the company’s March 31, 2021 IPO.
Spectrum’s stock has rallied more than 8% in 2017.
Investors may have to wait a little longer for an earnings update.
The stock has fallen more than 50% over the past decade, to around $11.10.
It is currently trading for about $14.
The analysts at S&P Dow Jones Indices think Spectrum’s earnings estimate is reasonable, but it could drop as much as 25% if investors see the stock drop further.
“We believe that Spectrum will continue to expand and benefit from its solid position in the technology space, as it has in recent years, while also maintaining its market leadership position in general,” the analysts wrote.
Investors are worried about the company.
In April, Spectrum posted a net loss of $1.1 billion, its third-worst quarterly loss since 2008.
The losses were partly due to a loss in revenue from the LittLestone acquisition, which was valued at $2.9 billion, or 30% of Spectrum’s revenue.
The Littland acquisition, in turn, had a negative impact on the company, which is one of the few private companies that are valued at more than 20 times revenue.
As a result, the company is down $1 billion since the end of February.
“There is a lot of uncertainty around Spectrum right now,” said Jeff Bies, a portfolio manager at BlackRock.
“If they’re able to get through their earnings, it will be very beneficial for them, but at the same time, it’s going to make the market worse.”
Spectrum will report earnings of $5 per share.
The Dow Jones Industrial Average is up nearly 6% this year.
Spectrum will also report earnings per share of $3.10, up from $3 per share a year ago.
The average price of Spectrum shares was up 8% to close at $10,942 per share on Thursday.
Spectrum has a $4.2 billion debt load, and $3 billion in cash and marketable securities, according the analysts.
The net debt is down to $9.7 billion, but the company says it has a plan to increase the debt to $19 billion by 2021.
Spectrum, which started life as the private tech startup that was acquired by the former AT&”T in 2003, has grown into a tech giant with revenues of more than a billion dollars annually and $8.5 billion in revenue in 2017, according its most recent earnings report.
The technology company is part of the Walt Disney Company, which made a $50 billion acquisition of Littelestone in March.
Spectrum plans to sell more debt and buy back its own stock in 2018.
Spectrum said it expects to generate $2,700 million in profit this year, up 10% from last year.
The shares were trading around $15.50 on Thursday, and Spectrum has fallen in the past year.
Its stock has declined nearly 50% in the last decade, with analysts saying it’s still in a good spot.
The S&P500 index is up more than 5% this week.