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

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Companies are warning that earnings results are going to be brutal

Source: CNBC

https://www.cnbc.com/2019/07/01/compani ... rutal.html

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1H Earnings

We entered the earnings season with market expectations of a 3% decline in year-over-year in earnings.

With about a fifth of the companies now reported, close to 80% have surprised positively on earnings, on an earnings growth rate of about 7%.

Source: Forbes

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US: 2Q Earnings

As of last Friday, almost half of all S&P 500 companies have reported earnings.

Of the 221 S&P 500 companies reporting through last Friday, 170 (77%) have surprised investors with better-than-expected results.

Of the S&P companies that have reported so far, average earnings are up 0.7% from a year earlier.

That said, we're still on track for negative earnings after all companies report.

However, given some of the positive surprises that have come in, analysts are revising forecasts, calling for a 2.6% earnings contraction, which is an improvement over the 3% contraction previously anticipated.

Companies with significant exposure to overseas revenues are feeling more pain than U.S.-centric stocks.

The other headwind that many S&P 500 companies are still facing is the strong U.S. dollar. The U.S. dollar's strength continues to hinder many multinational companies.

For Q3, current estimates are for another earnings decline of -1.9%, coupled with revenue growth of just 3.2%.

In Q4, we're expected to swing back into growth mode, with earnings anticipated to come in at 4.9% and revenues climbing back to 4%.

But what's more interesting and exciting is what's expected to come in 2020. Q1 earnings growth is pegged at 9.2%, followed by 12.6% expected growth from Q2 next year.

So, it appears if we can weather some shorter-term weakness, we're headed back into growth mode as the markets approach Christmas and beyond.

Source: Investor Place

[winston]

US: 2Q Earnings

As of last Friday, almost half of all S&P 500 companies have reported earnings.

Of the 221 S&P 500 companies reporting through last Friday, 170 (77%) have surprised investors with better-than-expected results.

Of the S&P companies that have reported so far, average earnings are up 0.7% from a year earlier.

That said, we're still on track for negative earnings after all companies report.

However, given some of the positive surprises that have come in, analysts are revising forecasts, calling for a 2.6% earnings contraction, which is an improvement over the 3% contraction previously anticipated.

Companies with significant exposure to overseas revenues are feeling more pain than U.S.-centric stocks.

The other headwind that many S&P 500 companies are still facing is the strong U.S. dollar. The U.S. dollar's strength continues to hinder many multinational companies.

For Q3, current estimates are for another earnings decline of -1.9%, coupled with revenue growth of just 3.2%.

In Q4, we're expected to swing back into growth mode, with earnings anticipated to come in at 4.9% and revenues climbing back to 4%.

But what's more interesting and exciting is what's expected to come in 2020. Q1 earnings growth is pegged at 9.2%, followed by 12.6% expected growth from Q2 next year.

So, it appears if we can weather some shorter-term weakness, we're headed back into growth mode as the markets approach Christmas and beyond.

Source: Investor Place

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2020 Earnings

Matthew Miskin, co-chief investment strategist at John Hancock Investment Management, says he has spotted a big blind spot.

“The biggest risk we see right now is the expectations of earnings growth that is being baked in by the Street for the S&P 500 for 2020, which is remarkably high,” Miskin told MarketWatch in an interview earlier this week.

How high? Wall Street analysts are expecting 10.5% earnings growth in 2020 for the S&P, he says, adding that we’d “need to see a significant change in the macro backdrop to achieve that type of earnings growth.”

And that’s as 2019 is only expected to produce earnings growth of 1%, after a pretty flat couple of quarters so far this year.

Expectations for a ramp-up of earnings in the third quarter and blowout gains in the fourth quarter are also dubious, he says.

Having said that, he does prefer U.S. stocks—technology, health care and companies that represent the things and services consumers can’t do without, the staples.

As we move into that 2020 election year, he thinks investors are blind to another sector that could benefit from fiscal stimulus plans or discussions. Think utilities, pipelines, electrical grids—global infrastructure plays, which are underrepresented in investor portfolios, he says.

“It’s what people need versus what they want. If you saw an economic slowdown, people are still going to need their water, they’re still going to need to turn on the lights…they’re still probably going to be on their cellphone,” said Miskin.

In other words, these are the last things consumers will spend money on, making for another solid defensive play if the global economy is headed for tough times.

“If governments start to spend more on it, it could be a growth asset class,” he adds.

Source: Market Watch

https://www.marketwatch.com/story/inves ... yptr=yahoo

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3Q Earnings

Wall Street is looking for earnings to contract 3.8% from the same period a year ago.

Source: Forbes

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3Q Earnings

Estimates had already been ratcheted down to fit the recession narrative that had been going around. That view has since been lowered even more.

The street is looking for a 4.6% year-over-year decline in S&P 500 earnings in the third quarter.

So, we came into earnings season with the table set for positive surprises.

And we're getting it. About eight out of ten companies have beat earnings estimates so far, showing year-over-year growth, not contraction. But it's still early.

Source: Forbes

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US: Q3 Earnings Surprise

Already, about one-third of all S&P 500 companies have reported their third-quarter earnings – and an impressive 81% have beaten expectations.

Analysts now look for earnings to be down only 4.1% from last year, which is better than where estimates stood just a week ago.

I look for earnings to start picking up in the fourth quarter, and then really ramp up in 2020.

If the U.S. gets a trade deal done with China, I am confident that corporate earnings will take off. However, even if we remain status quo, expectations are for record earnings next year.

And when company profits are at historic highs… stock prices are typically at historic highs, too.

Source: Investor Place

[behappyalways]

Opinion: Two struggling industries could demolish tech’s earnings season
https://www.marketwatch.com/story/two-s ... =home-page

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Update: US 3Q Earnings

The latest: 76% of S&P 500 companies have beat earnings-per-share forecasts, while 61% have beat predictions on revenue, according to FactSet.

Third-quarter earnings are still poised to decline 2.7%, the largest year-over-year drop since the middle of 2016, per FactSet. But that's much better than the 4.1% drop that had been penciled in one month ago.

"Earnings in the US are surprising strongly on the upside," Mislav Matejka, head of global and European equity strategy at JPMorgan, wrote in a note to clients on Friday.

Investors also appear to be more forgiving. "Despite some notable profit warnings, stocks that are missing estimates are not being penalized as severely as in the past quarters," Matejka said.

The reason for the pickup is twofold, Nick Raich, CEO of The Earnings Scout, told me.

Typically, 75% to 80% of S&P 500 companies beat expectations in any given quarter, since companies favor conservative estimates and analysts follow suit, he said.

This quarter, corporate earnings are also benefiting from Federal Reserve stimulus. A third consecutive interest rate cut, made official last week, also didn't hurt.

Trouble ahead: Meanwhile, the outlook for the fourth quarter is dimming. Year-over-year earnings — which one month ago were expected to grow by 2.4% — are now forecast to dip by 0.4%, according to FactSet.

Source: CNN