Goldman, Morgan Stanley, Alcoa On Tap This Week As Q4 Earnings Picks Up Pace: Fund Manager Tells Why 2024

The fourth-quarter reporting season kicked off with earnings releases from major banks last Friday, delivering less-than-optimistic news and casting a shadow on profit growth prospects.

The Season So Far: As of now, 6% of S&P 500 companies have reported earnings. According to FactSet’s latest weekly Earnings Insight report, 76% of them reported positive earnings surprises, and 55% reported revenue exceeding estimates.

JPMorgan Chase & Co. (NYSE:JPM) reported a revenue beat but faced earnings pressure due to costs linked to regional bank bailouts. Despite reaching a record annual revenue in 2023, Bank of America Corp. (NYSE:BAC) missed revenue expectations.

UnitedHealth Group, Inc. (NYSE:UNH) experienced a share pullback due to concerns over higher medical costs, and Delta Air Lines, Inc. (NYSE:DAL) witnessed a significant drop on Friday following disappointing guidance.

Earnings Drop Looms? Projections indicate a potential negative 0.1% blended year-over-year earnings growth for S&P 500 companies, marking a potential negative profit growth for the fourth time in the past five quarters, according to FactSet. Four S&P 500 companies have issued below-consensus earnings per share guidance, while three anticipate results above consensus.

Fund manager Louis Navellier sees the forward outlook as more important than the December-quarter earnings. “Guidance for ’24 will be much more important than 4Q23 results with current valuations counting on double-digit earnings growth and multiple cuts by the Fed,” he said.

While noting that the stock market has got off to a negative start this year, he said, “All it will take is a couple of days of positive earnings results and guidance to get back on track.”

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Key Earnings To Watch This Week:

Tuesday: Goldman Sachs Group, Inc. (NYSE:GS), Morgan Stanley (NYSE:MS) and PNC Financial Services Group, Inc. (NYSE:PNC) are scheduled to report ahead of the market open. Goldman is expected to report nearly flat bottom-line results and a modest revenue drop, while Morgan Stanley’s top as well as bottom line are expected to decline on a year-over-year basis. Higher interest rates may have propped up the net interest income of banks, and after a lull, deal-making, initial public offering, corporate advisory activities, etc. picked up pace in the fourth quarter. Interactive Brokers Group, Inc. (NASDAQ:IBKR) and Progress Software Corp. (NASDAQ:PRGS) are due after the market closes.
Wednesday: Charles Schwab Corp. (NYSE:SCHW) and US Bancorp. (NYSE:USB) are expected to report before the market opens. Alcoa, Inc. (NYSE:AA), Discover Financial Services (NYSE:DFS), and energy pipeline transportation company Kinder Morgan (NYSE:KMI) will report after the market closes.
Thursday: Among those reporting before the market opens are industrial distribution company Fastenal Co. (NASDAQ:FAST) as well as regional banks First Horizon Corp. (FHN), and KeyCorp. (NYSE:KEY), M&T Bank Corp. (NYSE:NTB) and Northern Trust Corp. (NASDAQ:NTRS). Those reporting after the close are road transportation company J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) and specialty chemicals company PPG Industries, Inc. (NYSE:PPG).
Friday: Another slew of regional banks, including Comerica, Inc. (NYSE:CMA), Fifth Third Bancorp. (NASDAQ:FITB), Regions Financial Corp. (NYSE:RF), and State Street Corp. (NYSE:STT) are due to report ahead of the market opening. Also reporting on Friday are oilfield services company SLB Limited (NYSE:SLB) and insurer Travelers Companies, Inc. (NYSE:TRV).