Earnings (General News) 02 (Oct 16 - Dec 25)

[winston]

The squeeze is on for profits at big companies.

After enjoying a strong run where they could keep raising prices to boost their profits, companies are now stuck in a vise.

On one end, revenue is under pressure as the global economy remains fragile. On the other, companies are having to pay higher wages for workers, among other costs.

Caught in the middle are corporate profit margins, which measure how much in profit companies make on each $1 of revenue.

Source: AP

[behappyalways]

US Q2, 2023 Earnings by the Numbers from
https://twitter.com/AyeshaTariq/status/ ... 5294935348

[behappyalways]

Earnings

Out of 116 companies issuing earnings guidance, 74 is negative while 42 is positive.

https://twitter.com/AyeshaTariq/status/ ... 7882671453

[winston]

Earnings Projections

From FactSet’s latest Earnings Insight last Friday:

For Q1 2024, analysts are projecting earnings growth of 8.6% and revenue growth of 4.7%.

For Q2 2024, analysts are projecting earnings growth of 12.1% and revenue growth of 5.5%.

For CY 2024, analysts are projecting earnings growth of 12.2% and revenue growth of 5.6%.

For context, YCharts reports that the average S&P earnings growth rate is 9.03%.

Source: Investor Place

[winston]

3Q Earnings

The earnings outlook for the S&P 500 for the third quarter is less negative relative to recent quarters.

The percentage of companies issuing negative earnings guidance is equal to the 10-year average.

Overall, the index is expected to report a year-over-year decline in earnings in the third quarter for the fourth straight quarter. However, the estimated decrease in earnings for the third quarter would be the smallest decline during this four-quarter streak.

Clearly, we shouldn’t be looking for fantastic earnings growth over the next several weeks based on this forecast. So, there appears to be no improvements for the ERP in the near future.

However, the analysts highlighted by FactSet forecast the S&P will see 12.2% earnings growth next year.

Regular Digest readers know that we’ve been skeptical of this projection based on the waning health of the U.S. consumer. But we hope our skepticism is unwarranted and we’re proved wrong. It would give the S&P its best chance at a sustained rally.

But let’s be clear: Without that earnings growth, stocks offer investors zero risk-adjusted advantage over bonds for a medium-term outlook.

Source: Investor Place

[behappyalways]

BERNSTEIN: “.. For the 29% of S&P 500 companies that have reported third quarter results so far, earnings are up +11% .. but without the contributions of the ‘Magnificent 7’ stocks, index EPS growth would drop to -8.6% ..” $SPX
https://twitter.com/carlquintanilla/sta ... 1705246004

[behappyalways]

This is the fastest set of earnings forecast downgrades since December of 2022
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"The Pessimistic Tone On Conference Calls Is Striking": US Stocks Are Facing Falling Profit Forecasts
https://www.zerohedge.com/markets/pessi ... -forecasts

[behappyalways]

Profit warnings so far are concentrated in the Consumer Discretionary sector.
https://twitter.com/dlacalle_IA/status/ ... 5489948089


Warnings On "Weak Demand" Are Piling Up This Earnings Season
https://www.zerohedge.com/markets/warni ... ngs-season

[winston]

Not bad at all.

With 92% of S&P 500 companies having reported Q3 earnings, year-over-year growth stands at 4.1%, the first time we’ve seen growth in a year.

Analysts predicted a 0.3% decline on Sept. 30.

The bad news is that the outlook for Q4 S&P 500 earnings growth has fallen to 3.2% from 8% at the end of September.

Source: The Street

[behappyalways]

$SPX Earnings are tracking a 4% beat so far for Quarter 3. The biggest contributors were $AMZN and $MSFT
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