Can Market Sustain Upward Momentum In Tech-Heavy Earnings Week? Apple, Amazon, AMD, Alphabet, Ford Among Key Quarterly Reports To Watch

Zinger Key Points
  • Corporate profit growth has been one of the key drivers of the market in recent years.
  • As companies navigate a tough external climate, the market may not receive much support from this catalyst at least near term.

With a full week of earnings behind us, it’s time to take stock of the fourth-quarter reporting season so far. Overall, the news flow has been mixed, although tech earnings have grossly disappointed.

Some of the big tech names that fell short are Intel Corp. INTC and Texas Instruments, Inc. TXN. Chip-equipment manufacturers KLA Corp. KLAC and Lam Research, Inc. LCRX issued sub-par guidance, portending more pain ahead for the semiconductor industry and the broader tech sector.

On the other hand, Tesla, Inc.’s TSLA earnings came as a welcome relief, triggering a strong two-day rally in the stock.

Expectations Drop Further: Blended earnings of S&P 500 companies are expected to dip 5%, steeper than the 4.6% decline forecast in the week ended Jan. 20th, estimates by financial data provider FactSet showed.

This would mark the first decline since the third quarter of 2020 when S&P 500 earnings fell 5.7%.

Out of the 29% of the S&P 500 companies that have reported earnings so far, 69% have posted better-than-expected bottom-line results and a more modest 60% reported better-than-expected revenue. The average upside percentage for companies reporting earnings beats is 1.5%, below the one-year average of 4.5% and the five-year average of 8.6%.

Looking ahead to the future, analysts expect earnings to decline in the first half of the year before turning positive in the second half, FactSet said. The first and second quarters of 2023 are expected to see earnings declines of 3.7% and 10.3%, respectively. Growth would rebound sharply in the second half, resulting in a positive 3.4% growth for the full year.

The S&P 500 has gained a little over 6% year-to-date. Whether the market can sustain the rally depends on the earnings news flow, especially the forward commentary and the Fed decision scheduled to be announced Wednesday.

Major companies reporting earnings in the week of Jan. 30 are:

Monday

1. NXP Semiconductors N.V. NXPI (after the market close)

EPS Estimate: $3.60 Vs. $3.20 Year-Ago
Revenue Estimate: $3.3 billion Vs. $3.04 billion Last Year

2. Whirlpool Corp. WHR (after the market close)

EPS Estimate: $3.25 Vs. $6.14 Year-Ago
Revenue Estimate: $5.09 billion Vs. $5.82 billion Last Year

GE Healthcare Technologies, Inc. GEHC, which has been spun-off from General Electric, Inc. GE, is scheduled to report ahead of the market open.

See also: Best Ways To Trade Penny Stocks

Tuesday

1. Caterpillar, Inc. CAT (before the market open)

EPS Estimate: $4.02 Vs. $2.69 Year-Ago
Revenue Estimate: $16.11 billion Vs. $13.8 billion Last Year

2. Exxon Mobil, Inc. XOM (before the market open)

EPS Estimate: $3.31 Vs. $2.05 Year-Ago
Revenue Estimate: $94.67 billion Vs. $84.97 billion Last Year

3. General Motors Corp. GM (before the market open)

EPS Estimate: $1.69 Vs. $1.35 Year-Ago
Revenue Estimate: $40.65 billion Vs. $33.58 billion Last Year

4. McDonald’s Inc. MCD (before the market open)

EPS Estimate: $2.45 Vs. $2.23 Year-Ago
Revenue Estimate: $5.67 billion Vs. $6.01 billion Last Year

5. Pfizer, Inc. PFE (before the market open)

EPS Estimate: $1.06 Vs. $1.08 Year-Ago
Revenue Estimate: $24.47 billion Vs. $23.84 billion Last Year

6. Spotify Technology SA SPOT

EPS Estimate: (-$1.39) Vs. (-$0.23) Year-Ago
Revenue Estimate: $3.44 billion Vs. $2.74 billion Last Year

7. United Parcel Service, Inc. UPS (before the market open)

EPS Estimate: $3.59, Flat With Year-Ago
Revenue Estimate: $28.09 billion Vs. $27.77 billion Last Year

8. Advanced Micro Devices, Inc. AMD (after the close)

EPS Estimate: $0.67 Vs. $0.92 Last Year
Revenue Estimate: $5.5 billion Vs. $4.83 billion Last Year

9. Snap, Inc. SNAP (after the close)

EPS Estimate: $0.11 Vs. $0.22 Last Year
Revenue Estimate: $1.3 billion, nearly flat with Last Year

10. Amgen, Inc. AMGN (after the close)

EPS Estimate: $4.08 Vs. $4.36 Last Year
Revenue Estimate: $6.76 billion Vs. $6.85 billion Last Year

Electronics Arts, Inc. EA and Western Digital Corp. WDC are among the other notable names reporting after the market close.

Four Dow components, namely Caterpillar, McDonald’s, Pfizer and Amgen are scheduled to report their quarterly reports on Tuesday. The industrials sector saw the second-biggest earnings growth among companies reporting last week, helped by strong performances by Boeing BA and airlines. Caterpillar and GM could help keep the sector’s strength intact this week.

Exxon’s results will follow peer Chevron Corp. CVX, which reported record full-year profits last week. Its fourth-quarter earnings per share missed estimates, but revenue topped expectations.

AMD’s results could also stir anxiety among investors following rival Intel’s fourth-quarter miss. Snap is coming off a string of weak quarterly performances, and it remains to be seen if the Snapchat parent has turned the corner.

Wednesday

1. Humana, Inc. HUM (before the market open)

EPS Estimate: $1.46 Vs. $1.24 Year-Ago
Revenue Estimate: $22.50 billion Vs. $21.20 billion Last Year

2. Novartis, Inc. NVS (before the market open)

EPS Estimate: $1.43 Vs. $1.40 Year-Ago
Revenue Estimate: $13.13 billion Vs. $13.23 billion Last Year

3. Meta Platforms, Inc. META (after the close)

EPS Estimate: $2.21 Vs. $3.67 Last Year
Revenue Estimate: $31.49 billion Vs. $33.67 billion Last Year

4. eBay, Inc. EBAY (after the close)

EPS Estimate: $1.06 Vs. $1.05 Last Year
Revenue Estimate: $2.46 billion Vs. $2.61 billion Last Year

Boston Scientific, Corp. (NYSE BSX), T-Mobile US, Inc. TMUS and Qorvo, Inc. QRVO are among the other noteworthy companies reporting on Wednesday.

Thursday

1. ConocoPhillips COP (before the market open)

EPS Estimate: $2.82 Vs. $2.27 Last Year
Revenue Estimate: $18.03 billion Vs. $15.96 billion Last Year

2. Cardinal Health, Inc. CAH (before the market open)

EPS Estimate: $1.14 Vs. $1.27 Last Year
Revenue Estimate: $50.61 billion Vs. $45.46 billion Last Year

3. Alibaba Group Holding Limited BABA (before the market open)

EPS Estimate: $2.40 Vs. $2.59 Last Year
Revenue Estimate: $36.26 billion Vs. $33.71 billion Last Year

4. Apple, Inc. AAPL (after the close)

EPS Estimate: $1.94 Vs. $2.10 Last Year
Revenue Estimate: $121.67 billion Vs. $123.94 billion Last Year

5. Amazon, Inc. AMZN (after the close)

EPS Estimate: $0.17 Vs. $1.39 Last Year
Revenue Estimate: $145.37 billion Vs. $137.41 billion Last Year

6. Qualcomm, Inc. QCOM (after the close)

EPS Estimate: $2.35 Vs. $3.23 Last Year
Revenue Estimate: $9.60 billion Vs. $10.70 billion Last Year

7. Ford Motor Company F (after the close)

EPS Estimate: $0.62 Vs. $0.26 Last Year
Revenue Estimate: $40.37 billion Vs. $35.26 billion Last Year

8. Alphabet, Inc. GOOGL GOOG (after the close)

EPS Estimate: $1.19 Vs. $1.53 Last Year
Revenue Estimate: $76.16 billion Vs. $75.33 billion Last Year

Big pharma companies Bristol-Myers Squibb Co. BMY, Merck & Co., Inc. MRK and Eli Lilly & Co. LLY are all scheduled to report their fourth-quarter results ahead of the market open. Beazer Homes USA, Inc. BZH and Gilead, Inc. GILD are among those reporting after the close.

Apple’s earnings and CEO Tim Cook’s commentary could provide cues about the outlook for the tech sector. Given the tough demand and supply-side situation that prevailed in Apple’s fiscal year first quarter, investors will likely be keen to hear how the tech giant weathered the crises.

Amazon does not evince much confidence, given its core e-commerce business may have suffered from a slowdown in consumer spending. The company has seen its growth taper from the COVID-19 boom years. Microsoft, Inc.’s MSFT quarterly results that showed softening cloud growth triggered fears concerning a similar predicament at Amazon’s AWS Cloud business. AWS is among the high-margin businesses of the company, and any drastic slowdown could impact the profitability of the e-commerce giant.

Friday

1. Regeneron Pharmaceuticals, Inc. REGN (before the market open)

EPS Estimate: $10.11 Vs. $21.32 Year-Ago
Revenue Estimate: $3.14 billion Vs. $4.95 billion Last Year

2. Cigna, Inc. CI (before the market open)

EPS Estimate: $4.86 Vs. $4.77 Year-Ago
Revenue Estimate: $45.71 billion Vs. $45.68 billion Last Year

3. Sanofi SNY (before the market open)

EPS Estimate: $0.90 Vs. $0.79 Year-Ago
Revenue Estimate: $12.01 billion Vs. $11.42 billion Last Year

Read next: Fed Must Do 2 Things To Maintain S&P 500 Rally Or 'No Way That Stocks Are Going to Make It': Jeremy Siegel

Photo: RosieTulips on flickr

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