Back to top

Image: Bigstock

Disney, Coca-Cola, Uber, Twitter and Boeing are part of Zacks Earnings Preview

Read MoreHide Full Article

For Immediate Release

Chicago, IL – February 8, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes The Walt Disney Company (DIS - Free Report) , The Coca-Cola Company (KO - Free Report) , Uber Technologies, Inc. (UBER - Free Report) , Twitter, Inc. and The Boeing Company (BA - Free Report) .

Q4 Earnings Growth Turns Positive

Earnings growth was expected to resume in the first quarter of 2021 after the pandemic-driven declines of 2020. But positive growth has arrived a little earlier, with earnings in the ongoing Q4 earnings season now modestly above the year-earlier period.

To give you a sense of how much the Q4 growth pace has changed in recent weeks and how good the reporting cycle has been, keep in mind that as recently as mid-December 2020, the consensus estimate was for a decline of -11.2%.

Earnings Season Scorecard (as of Friday, February 5th)

The Q4 earnings season has now crossed the half-way mark, with results from 292 S&P 500 members or 58.4% of the index's total membership out already. Please note that these 292 index members collectively account for 75.6% of the index's total market capitalization. As such, the results out already represent a true cross section of the index as a whole and of the overall earnings picture.

We have another busy reporting line-up this week, with more than 450 companies on deck to report Q4 results, including 82 S&P 500 members. This week's reporters range from legacy blue chips like Disney, Coke and others to up-and-coming bellwethers like Uber, Twitter and others.

Total Q4 earnings (or aggregate net income) for these 292 companies are up +4.9% from the same period last year on+2.4% higher revenues, with 80.5% beating EPS estimates and 79.5% beating revenue estimates.

Not only are a historically high proportion of the reporting companies beating consensus EPS and revenue estimates, but they are also providing positive and reassuring guidance that is helping sustain the positive revisions trend that has been in place since July 2020.

We expect this favorable trend to strengthen and accelerate as we move into the second half of the Q4 earnings season this week, with more than 450 companies on deck to report results, including 82 S&P members.

A number of sectors standout in coming out with impressive results, with Technology and Finance particularly notable. Results from the Construction and Basic Materials sectors are also very strong.

For the Technology sector, we now have Q4 results from 83.7% of the sector's total market cap in the index. Total earnings for these Tech companies are up +22.3% from the same period last year on +14.2% higher revenues, with 90.7% beating EPS estimates and 86% beating revenue estimates.

The Overall Earnings Picture

Looking at Q4 as a whole, combining the actual results from 292 index members with estimates for the still-to-come companies, total earnings are now expected to up +2.2% on +2.5% higher revenues. This positive growth follows three-straight quarters of declines for S&P 500 earnings.

Sectors with the weakest growth remain the same ones that struggled in the first three quarters of the year, including Transportation (-91.7% earnings decline), Energy (-94.1%), and Consumer Discretionary (-72.5%). Q4 earnings for the Aerospace sector now are expected to be down -138.4%, largely reflecting Boeing's weak quarterly release.

On the positive side, Q4 earnings are expected to be up +142.9% at Autos, +38.3% at Construction, +22.1% at Basic Materials, +17.6% at Finance, +19.6% at Technology, +13.9% at Medical and +10.4% at the Retail sector.

Excluding Finance's help, Q4 earnings for the rest of the S&P 500 index would be down -1.8%, instead of +2.2%. Q4 Earnings decline -4.6% rate, instead of up +2.2% once Technology's strong showing is excluded.

Growth is expected to resume this year, with full-year 2021 earnings for the S&P 500 index currently expected to be up +27% relative to 2020 estimates.

Estimates for 2021 have been steadily going up over the last six months. But we strongly feel that there is significant room for further positive revisions as the overall macro backdrop stabilizes and gets clearer, particularly in the second half of the year.

For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> Tech Sector Shows Its Enormous Earnings Power

+1,500% Growth: One of 2021's Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks' top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things's exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>

Join us on Facebook:  https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact
Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

 

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Published in