The past week’s earnings were bordering on the negative, impacting trader sentiment, and the focus now shifts to the unfolding week that would see the release of a slew of tech earnings reports.
The Week That Was: Tesla, Inc. TSLA, Intel, Inc. INTC, and Texas Instruments, Inc. TXN were among the high-profile disappointments of the past week. The Elon Musk-led company’s quarterly report underlined the fundamental challenges of the electric vehicle industry. Weak forward guidance from Intel and TI underlined the chip industry’s woes as most end markets, except AI servers, experienced softness.
On the other hand, Netflix, Inc. NFLX warmed the Street with its strong net paid subscriber additions and outlook.
So far, about 25% of the S&P 500 companies have reported earnings, according to financial data analytics company Factset. Of those that have reported, 69% have reported positive earnings per share surprises and 68% reported positive revenue surprises.
The blended earnings of S&P 500 companies are expected to decline by 1.4% in the fourth quarter, FactSet said, as it updated the numbers following the past week’s earnings. This is an improvement from the previous week’s 1.7% drop in forecast.
S&P 500 companies issuing negative earnings per share guidance for the first quarter outnumbered those issuing positive guidance by a 14:9 tally. That said, analysts see an inflection in earnings growth in the first quarter, with the momentum building over the year. The Street models earnings growth of 4.6% in the first quarter, 9.4% for the second quarter, and 11.6% for the full year.
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Looking Ahead: A tech-heavy week awaits traders as earnings from many high-profile names are on tap. The week will see earnings reports from 106 S&P 500 companies, including six Dow components, Factset said.
Microsoft Corp.’s MSFT will be the key earnings and call this week, with Apple, Inc. AAPL taking a backseat to the software giant, said Wedbush analyst Daniel Ives. “The launch of Copilot success and early adoption of AI will have all the eyes of the Street globally tuned in with popcorn in hand,” he said.
The analyst sees the Satya Nadella-led company’s earnings to be the key barometer for AI spending. He expects Microsoft to beat the Street guidance of $61 billion in revenue and earnings per share of $2.77, with Azure growth the most important metric.
Microsoft is among the five Magnificent Seven companies to report earnings this week, with Tesla’s report already and Nvidia Corp. NVDA not reporting until Feb. 21.
In aggregate, six “Mag 7” companies, excluding Tesla, are expected to report year-over-year earnings growth of 53.7% for the fourth quarter, FactSet said. If earnings from these companies were excluded, S&P 500 companies’ blended earnings would likely see a steeper 10.5% drop.
Investors may also keep an eye on energy earnings. Given the depressed prices of crude oil, the sector will likely report the biggest year-over-year earnings drop among the S&P 500 sectors, Factset said.
Key Earnings To Watch
Monday
- Premarket: SoFi Technologies, Inc. SOFI
- Aftermarket: Cleveland-Cliffs Inc. CLF, F5, Inc. FFIV, Nucor Corporation NUE, Sanmina Corporation SANM, Whirlpool Corporation WHR
Tuesday
- Premarket: General Motors Corp. GM, Pfizer, Inc. PFE, JetBlue Airways Corp. JBLU, United Parcel Service, Inc. UPS
- Aftermarket: Advanced Micro Devices, Inc. AMD, Alphabet, Inc. GOOGL GOOG, Electronic Arts Inc. EA, Juniper Networks, Inc. JNPR, Microsoft, Mondelez International, Inc. MDLZ, Skyworks Solutions, Inc. SWKS, Starbucks Corp. SBUX, Unum Group UNM.
Wednesday
- Premarket: Boston Scientific Corporation BSX, Brinker International, Inc. EAT, GSK plc GSK, Mastercard Incorporated MA, Nasdaq, Inc. NDAQ, Novartis AG NVS, Old Dominion Freight Line, Inc. ODFL, Rockwell Automation, Inc. ROK Teva Pharmaceutical Industries Limited TEVA, Thermo Fisher Scientific Inc. TMO, Boeing Co. BA
- Aftermarket: Kulicke and Soffa Industries, Inc. KLIC, MetLife, Inc. MET, Qorvo, Inc. QRVO, C.H. Robinson Worldwide, Inc. CHRW, Wolfspeed, Inc. WOLF, Qualcomm, Inc. QCOM
Thursday
- Premarket: Altria Group, Inc. MO, Barrick Gold Corporation GOLD, Cardinal Health, Inc. CAH, Ferrari N.V. RACE, Honeywell International, Inc. HON, Merck & Co., Inc. MRK, Royal Caribbean Cruises Ltd. RCL, Sanofi SNY, Sirius XM Holdings Inc. SIRI
- Aftermarket: Amazon, Inc. AMZN, Meta Platforms, Inc. META, Atlassian Corporation TEAM, Beazer Homes USA, Inc. BZH, Clorox Company CLX
Friday
- Premarket: AbbVie, Inc. ABBV, Chevron Corp. CVX, Exxon Mobil Corp. XOM, Bristol-Myers Squibb Co. BMY, Regeneron Pharmaceuticals, Inc. REGN, Restaurant Brands International Inc. QSR, Cigna Group CI
The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund that tracks the S&P 500 Index edged up 0.03% to $487.54 in premarket trading on Monday, according to Benzinga Pro data.
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