The big banks gave the Q1 earnings season a decent start, but the picture outside the Finance sector isn’t as reassuring. We knew that growth will be difficult following the massive revisions to estimates in the run up to the start of the Q1 earnings season. But despite those sharp revisions to estimates ahead of this reporting cycle, companies are struggling to beat revenue estimates.
At this stage in the Q1 reporting cycle, the ratio of companies beating revenue estimates is the lowest that we have seen in the recent past. The headwinds aren’t new – the strong U.S. dollar, global growth issues and Energy sector weakness – we heard about all of them in the Q4 earnings season as well
More on the aggregate earnings picture emerging from the already-released Q1 results a little later, but let’s briefly touch on the Finance sector’s results. The Finance sector’s better showing is largely a function of improvement in some business lines (investment banking, trading), some gains in loan portfolios and better cost controls. The overall interest rate backdrop for the group remains challenging and is expected to remain so given the widely held expectation that the Fed is in no hurry to start the monetary policy normalization process.
(For more details on the Finance sector’s performance this earnings season, please click here).
We have a super-busy reporting docket this week, with more than 500 companies reporting results, including 140 S&P 500 companies. This week’s reporting docket represents a blend of operators from different sectors, ranging from ‘growthy’ names like Facebook (FB) to smokestacks like Dow Chemicals (DOW) and plenty of others in the middle. By the end of this week, we will have seen results from 40% of the S&P 500 members and will have a pretty good idea about this reporting cycle.
The key earnings reports this week include
- Monday – Of the 18 S&P 500 members reporting results today, Morgan Stanley (MS – Analyst Report) and Halliburton (HAL – Analyst Report) will report in the morning, while IBM (IBM) will report after the close.
- Tuesday –Of the more than 30 S&P 500 companies reporting results today, the notable ones are Verizon (VZ – Analyst Report) and DuPont (DD) in the morning while Yahoo (YHOO – Analyst Report) will report after the close.
- Wednesday – The notable companies among the 31 S&P 500 members reporting today include Boeing (BA) and McDonald’s (MCD – Analyst Report) before the market’s open, while Facebook (FB) and AT&T (T – Analyst Report) will report after the close.
- Thursday – Today is the busiest reporting day of the Q1 earnings season thus far, with more than 50 S&P 500 members reporting results. The notable reports today include Caterpillar (CAT), General Motors (GM – Analyst Report) and Proctor & Gamble (PG – Analyst Report) in the morning while Google (GOOGL – Analyst Report), Amazon (AMZN) and Microsoft (MSFT – Analyst Report) will report after the close.
- Friday –Chemicals maker LyondelBasell (LYB – Analyst Report) and State Street (STT – Analyst Report) are some of the key companies reporting results today, all in the morning.
