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Zacks Earnings Trends Highlights: Microsoft, Apple and Alphabet

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For Immediate Release

Chicago, IL – February 10, 2022 – Zacks Director of Research Sheraz Mian says, "Despite the well-known headwinds of cost pressures and logistical bottlenecks, an above-average proportion of companies have been able to beat EPS and revenue estimates."

Taking Stock of the Earnings Picture Amid Market Rebound

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

The picture emerging from the Q4 earnings season is one of continued strength and momentum. Despite the well-known headwinds of cost pressures and logistical bottlenecks, an above-average proportion of companies have been able to beat estimates.

In fact, the proportion of companies beating consensus revenue estimates is actually tracking above what we had seen in the preceding earnings season from this same group of companies, with the earnings beats nearly the same.

On the guidance front, while a few notable operators stand out for providing a weak outlook, most companies have been able to offer reassuring, if not altogether positive, guidance. This is helping stabilize the revisions trend that had started going modestly negative in 2021 Q4. We are seeing this favorable development with estimates for the current period (2022 Q1) as well as full-year 2022.

The stock market setup appears to have been particularly favorable for the 2021 Q4 earnings season. We feel that market participants will be pleasantly surprised to see impressive results after watching those stocks experience significant weakness in recent days on Fed-related worries. We have seen this favorable setup in play with the strong Microsoft (MSFT - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) results helping those mega-cap stocks show big rebounds.

Looking at Q4 as a whole, total earnings for the quarter are expected to be up +30.6% from the same period last year on +14.7% higher revenues. The growth pace decelerates significantly in the following periods.

We remain positive in our earnings outlook, as we see the overall growth picture steadily improving, as Omicron’s effects start easing and the near-term logistical issues get addressed.

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