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

[behappyalways]

There are a few positives... but the chart seems to be largely skewed towards the negative
https://x.com/AyeshaTariq/status/1905712056894193835

[behappyalways]

Mag 7 stocks generate 49% of revenue overseas. That could hurt a bit given the retaliatory measures that are likely to be coming...
https://x.com/Mayhem4Markets/status/1908197353380597895

[winston]

1Q Earnings

For the first quarter, analysts now see earnings growth of 6.7% for S&P 500 companies, down from about 11.1% in early November when Trump was elected.

For all of 2025, they see profits rising 9.4%, compared with a projection of 12.5% at the beginning of the year.

Source: Bloomberg

[winston]

Wall Street has a far bigger problem: Earnings quality

Earnings quality is a serious issue considering the stock market entered 2025 at its third-priciest valuation when back-tested 154 years.

The S&P 500’s Shiller price-to-earnings (P/E) Ratio, which you may also see referred to as the cyclically adjusted P/E Ratio (CAPE Ratio), almost hit 39 in December 2024.

For context, the average Shiller P/E Ratio since January 1871 is 17.23.

Source: Daily Trade Alert

https://dailytradealert.com/2025/05/01/ ... r-problem/

[winston]

1Q Results

According to FactSet, 72% of S&P 500 companies have released quarterly results.

Of those, 76% have exceeded analysts’ earnings expectations.

The average earnings surprise is 8.6% and the S&P 500 is expected to achieve 12.8% earnings growth for the quarter.

Source: Investor Place

[winston]

US corporate profits decrease sharply in first quarter

Profits from current production with inventory valuation and capital consumption adjustments dropped US$118.1 billion (HK$921.18 billion) last quarter.

Profits surged US$204.7 billion in the October-December quarter.

Companies ranging from airlines, retailers to motor vehicle manufacturers have either withdrawn or refrained from giving financial guidance for 2025,

Source: The Standard

https://www.thestandard.com.hk/wealth-a ... le/303616/

[behappyalways]

Earnings growth is expected to be positive in 9 of 11 S&P 500 sectors year-over-year, led by tech and communications. Interestingly health care is also expected to have index-beating growth, yet has been underperforming. Is there an opportunity in that?
https://x.com/Mayhem4Markets/status/1929178206977798412

[winston]

Earnings showing ‘uncertainty’ – that’s the only sure thing for investors

And the feeling of shifting sands underfoot is rising as the courts challenge Donald Trump’s sweeping global tariffs

by Matthew Griffin

Corporate executives and Wall Street analysts are deeply concerned about the “uncertainty” sparked by President Donald Trump’s combative trade plans.

Since the beginning of April, the words “uncertain”, “uncertainty” and “uncertainties” have been used about 3,100 times during companies’ earnings calls and other events.

More than 80 per cent of executives said they expected a recession within the next year and a half.

Source: Bloomberg

https://www.businesstimes.com.sg/wealth ... -investors

[behappyalways]

Bloomberg says companies are eating the tariff costs, which means we may need to prepare for some margin compression in the next earnings season from companies that are importing products to resell here.
https://x.com/Mayhem4Markets/status/1933215834756817206

[behappyalways]

10 companies are responsible for 30% of all earnings.
https://x.com/zerohedge/status/1938080708645302749