About 14% of the S&P 500 companies have reported their June quarter earnings and the blended earnings growth rate for the companies constituting the broader index remains healthy. The coming week will see the official start of the tech reporting season, which could potentially decide the fate of the market, which has seen a steep pullback in the recent week.
The Week That Was: The tech earnings season had a modest start last week with the earnings report from chip-equipment maker ASML Holding N.V. ASML. The stock slumped about 16%, dragged by its weak third-quarter outlook and geopolitical concerns surrounding the China chip ban. Netflix, Inc.’s NFLX guidance disappointed investors, but with sell-side analysts raving over the results, the stock did not get hammered.
Investors cheered earnings reports from the remaining big banks, namely Bank of America Corporation BAC, Morgan Stanley MS and Goldman Sachs Group, Inc. GS. A rebound in investment banking business and strong trading revenue helped the banks shore up their topline.
Of these companies, 80% reported earnings per share above estimates compared to the five-year average of 77%, said FactSet in its latest earnings insight report. The average upside is about 5.5%, which, however, is below the five-year average of 8.6%.
See Also: Best Tech Stocks Right Now
Earnings Trend: The blended earnings growth rate for the S&P 500 companies for the second quarter is currently estimated at 9.7%, up from 9.1% in the previous week, FactSet noted. If the estimate is hit, the actual growth rate for the quarter will mark the highest year-over-year rate reported since the fourth quarter of 2021, it added. The second quarter will also likely mark the fourth consecutive quarter of growth.
Eight of the qq S&P 500 sectors are expected to report year-over-year earnings growth, with four, namely communication services, healthcare, IT, and financials, likely reporting double-digit earnings growth. On the other hand, three sectors will likely report earnings declines, led by the materials sector.
The Week Ahead: The unfolding week will see earnings reports from 138 S&P 500 companies, including seven Dow 30 components, Factset report said. The earnings slate for the week includes companies from the telecom, auto, steel, chip, homebuilding, defense, airline and tech industries.
Tesla, Inc. TSLA and Alphabet, Inc. GOOGL GOOG are among the closely watched copmanies, given their heavy weightings in the S&P 500 and the Nasdaq indices. Tesla is widely expected to report a sharp year-over-year decline in its earnings per share from 91 cents to 62 cents, while revenue may have seen a much more modest 0.80% decline to $24.73 billion. The greater impact on the bottom line comes from the price cuts that Elon Musk‘s company has relied on to push volume in a challenging demand environment.
Analysts and fund managers are optimistic after the company reported a deliveries beat for the quarter. They also expect an inflection in the second-half of the year.
Alphabet’s earnings are important because it is the first among the AI-levered mega-cap companies to release its quarterly results, which might set the tempo for the earnings from the rest in the space.
The stock market took a hit last week as major indices retreated from their record highs.The Invesco QQQ Trust QQQ, an index that tracks the performance of the Nasdaq 100 Index, ended Friday’s session down 0.89% to $475.24, according to Benzinga Pro data. The ETF is trading off its record close of $502.96 reached on July 10. The SPDR S&P 500 ETF Trust SPY fell 0.66% on Friday before closing at $548.99.
Notable among the companies reporting this week are:
Monday
Before market open:
- Verizon Communications Inc. VZ
After close:
- Agilysys, Inc. AGYS
- Cleveland-Cliffs Inc. CLF
- Nucor Corporation NUE
- NXP Semiconductors N.V. NXPI
Tuesday
Before market open:
- Coca-Cola Company KO
- Freeport-McMoRan Inc. FCX
- GATX Corporation GATX
- GE Aerospace GE
- General Motors Company GM
- Kimberly-Clark Corporation KMB
- Lockheed Martin Corporation LMT
- Philip Morris International Inc. PM
- PulteGroup, Inc. PHM
- Quest Diagnostics Incorporated DGX
- Spotify Technology S.A. SPOT
- United Parcel Service, Inc. UPS
After close:
- Alphabet
- Capital One Financial Corporation COF
- Chubb Limited CB
- Mattel, Inc. MAT
- Packaging Corporation of America PKG
- Seagate Technology Holdings plc STX
- Tesla
- Texas Instruments, Inc. TXN
- Visa Inc. V
Wednesday
Before market open:
- AT&T Inc. T
- Check Point Software Technologies Ltd. CHKP
- Boston Scientific Corporation BSX
- CME Group Inc. CME
- General Dynamics Corporation GD
- Old Dominion Freight Line, Inc. ODFL
- GE Vernova Inc. GEV
- Thermo Fisher Scientific Inc. TMO
After close:
- Chipotle Mexican Grill, Inc. CMG
- Edwards Lifesciences Corporation EW
- Ford Motor Co. F
- International Business Machines Corporation IBM
- Knight-Swift Transportation Holdings Inc. KNX
- Las Vegas Sands Corp. LVS
- Meritage Homes Corporation MTH
- Whirlpool Corporation WHR
- ServiceNow, Inc. NOW ORLY
- O’Reilly Automotive, Inc. ORLY
Thursday
Before market open:
- AbbVie Inc. ABBV
- American Airlines Group Inc. AAL
- AstraZeneca PLC AZN
- Comcast Corporation CMCSA
- Dow Inc. DOW
- Hasbro, Inc. HAS
- Honeywell International Inc. HON
- Sanofi SNY
- Southwest Airlines Co. LUV
- STMicroelectronics N.V. STM
- Union Pacific Corporation UNP
- Xerox Holdings Corporation XRX
After close:
- SkyWest, Inc. SKYW
- Juniper Networks, Inc. JNPR
- Deckers Outdoor Corporation DECK
- Boyd Gaming Corporation BYD
- BJ’s Restaurants, Inc. BJRI
- VeriSign, Inc. VRSN
Friday
Before market open:
- 3M Company MMM
- Barnes Group Inc. B
- Bristol-Myers Squibb Company BMY
- Newell Brands Inc. NWL
- Colgate-Palmolive Company CL
- Charter Communications, Inc. CHTR
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