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AutoZone, Costco and Uber, Airbnb, Expedia, Booking are part of Zacks Earnings Preview
Read MoreHide Full Article
For Immediate Release
Chicago, IL – August 1, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Uber (UBER - Free Report) , Airbnb (ABNB - Free Report) , Expedia (EXPE - Free Report) , Booking (BKNG - Free Report) .
Apple, Amazon and Big Tech Again Showcase Earnings Power
Amazon's quarterly release made up for the preceding period's disappointment. The report not only checks all the appropriate boxes for Q2, but it sent a clear all-is-well signal about Q3 as well.
This became doubly important for the market to see after what we heard from Walmart a few days back. Reading the Amazon release almost feels like they operate in a parallel universe where logistical challenges don't exist and customers aren't pressured by inflation.
Among the Big 5 Tech players, Amazon, Apple and Microsoft really stood out for the resilience and stability of their business. No company is completely immune from cyclical forces and we saw some of that with advertising spending trends in the Alphabet and Meta quarterly reports. But even after conceding that point, it is hard not to be impressed with the strength of the Apple, Amazon and Microsoft numbers.
Apple made $18.45 billion in earnings on $83 billion in revenues in Q2. Earnings were down -10.6% from the year-earlier level as a result of all-around higher expenses, China troubles, cyclical weakness in product categories like Mac and iPad and currency translation issues. But Apple was nevertheless able to provide reassuring guidance for the September period even though all of these headwinds will still be very much with us.
As a contrast to Apple and what it had to deal with, we also saw Exxon come out with $16 billion in earnings on $115.7 billion in revenues. Exxon is the quintessential old-economy operator that is currently enjoying a very favorable commodity-price environment.
Apple brought in $18.4 billion in a seasonally weak quarter; it had earned $25 billion in 2022 Q1 and $34.6 billion in 2021 Q4. Even the 'cyclically exposed' Alphabet brought in $16 billion in earnings in Q2.
On an unrelated note, we generally see the likes of Exxon as having 'more money than god' when the boundless riches are actually with these Tech titans.
Total Q2 earnings for the 'Big 5 Tech' players are down -20% from the same period last year on +6.8% higher revenues and a 585 basis-points (bps) compression in net margins. Q2 net margins are down for each of the 5 Tech leaders, with the biggest declines at Meta and Alphabet at -1255 and -851 bps, respectively.
Beyond the big 5 Tech players, total Q2 earnings for the Technology sector as a whole are expected to be down -8.4% from the same period last year on +2.4% higher revenues.
This big picture view of the 'Big 5' players as well as the sector as a whole shows a decelerating growth trend. That said, unlike this 'quarterly view,' the annual picture shows a lot more stability.
For those of you out there on the 'recession watch,' please note that the sector's 2022 earnings growth rate has come down from +2.7% from three months back. Growth estimates for 2023 have come down +13.1% over the same time period.
Q2 Earnings Season Scorecard
Through Friday, July 29th, we have seen Q2 results from 279 S&P 500 members or 55.8% of the index's total membership. Total earnings for these companies are up +4.7% on +14.1% higher revenues, with 75.6% beating EPS estimates and 65.6% beating revenue estimates.
The Finance sector has been a big drag on the 'headline' year-over-year growth rate for the companies that have reported already. Q2 earnings growth for the Finance sector companies that have reported already are down -23.5% from the same period last year.
Excluding this Finance sector drag, Q2 earnings growth for the rest of the index improves to +13.8%.
The EPS and revenue beats percentages are still tracking on the low side relative to historical periods, as you can see above.
This Week's Docket
We will have another very jam-packed reporting docket this week, with almost 1,300 companies on deck to report quarterly results, including 151 S&P 500 members. We have a host of reporters from the Energy, Tech, Consumer Staples and Discretionary sectors this week.
I will be keeping an eye on the evolving guidance picture, with a particular focus on the broader 'travel' space, with results from Uber, Airbnb, Expedia, Booking and others coming out this week.
By this time next week, we will have seen Q2 results from 86% of the S&P 500 members.
The Current Earnings Backdrop
The +5.7% earnings growth expected in 2022 Q2 is solely due to strong gains in the Energy sector. On an ex-Energy basis, Q2 earnings growth drops to a decline of -4.2%.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>A Stable Earnings Picture Despite Many Headwinds
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
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/performancefor information about the performance numbers displayed in this press release.
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AutoZone, Costco and Uber, Airbnb, Expedia, Booking are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – August 1, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Uber (UBER - Free Report) , Airbnb (ABNB - Free Report) , Expedia (EXPE - Free Report) , Booking (BKNG - Free Report) .
Apple, Amazon and Big Tech Again Showcase Earnings Power
Amazon's quarterly release made up for the preceding period's disappointment. The report not only checks all the appropriate boxes for Q2, but it sent a clear all-is-well signal about Q3 as well.
This became doubly important for the market to see after what we heard from Walmart a few days back. Reading the Amazon release almost feels like they operate in a parallel universe where logistical challenges don't exist and customers aren't pressured by inflation.
Among the Big 5 Tech players, Amazon, Apple and Microsoft really stood out for the resilience and stability of their business. No company is completely immune from cyclical forces and we saw some of that with advertising spending trends in the Alphabet and Meta quarterly reports. But even after conceding that point, it is hard not to be impressed with the strength of the Apple, Amazon and Microsoft numbers.
Apple made $18.45 billion in earnings on $83 billion in revenues in Q2. Earnings were down -10.6% from the year-earlier level as a result of all-around higher expenses, China troubles, cyclical weakness in product categories like Mac and iPad and currency translation issues. But Apple was nevertheless able to provide reassuring guidance for the September period even though all of these headwinds will still be very much with us.
As a contrast to Apple and what it had to deal with, we also saw Exxon come out with $16 billion in earnings on $115.7 billion in revenues. Exxon is the quintessential old-economy operator that is currently enjoying a very favorable commodity-price environment.
Apple brought in $18.4 billion in a seasonally weak quarter; it had earned $25 billion in 2022 Q1 and $34.6 billion in 2021 Q4. Even the 'cyclically exposed' Alphabet brought in $16 billion in earnings in Q2.
On an unrelated note, we generally see the likes of Exxon as having 'more money than god' when the boundless riches are actually with these Tech titans.
Total Q2 earnings for the 'Big 5 Tech' players are down -20% from the same period last year on +6.8% higher revenues and a 585 basis-points (bps) compression in net margins. Q2 net margins are down for each of the 5 Tech leaders, with the biggest declines at Meta and Alphabet at -1255 and -851 bps, respectively.
Beyond the big 5 Tech players, total Q2 earnings for the Technology sector as a whole are expected to be down -8.4% from the same period last year on +2.4% higher revenues.
This big picture view of the 'Big 5' players as well as the sector as a whole shows a decelerating growth trend. That said, unlike this 'quarterly view,' the annual picture shows a lot more stability.
For those of you out there on the 'recession watch,' please note that the sector's 2022 earnings growth rate has come down from +2.7% from three months back. Growth estimates for 2023 have come down +13.1% over the same time period.
Q2 Earnings Season Scorecard
Through Friday, July 29th, we have seen Q2 results from 279 S&P 500 members or 55.8% of the index's total membership. Total earnings for these companies are up +4.7% on +14.1% higher revenues, with 75.6% beating EPS estimates and 65.6% beating revenue estimates.
The Finance sector has been a big drag on the 'headline' year-over-year growth rate for the companies that have reported already. Q2 earnings growth for the Finance sector companies that have reported already are down -23.5% from the same period last year.
Excluding this Finance sector drag, Q2 earnings growth for the rest of the index improves to +13.8%.
The EPS and revenue beats percentages are still tracking on the low side relative to historical periods, as you can see above.
This Week's Docket
We will have another very jam-packed reporting docket this week, with almost 1,300 companies on deck to report quarterly results, including 151 S&P 500 members. We have a host of reporters from the Energy, Tech, Consumer Staples and Discretionary sectors this week.
I will be keeping an eye on the evolving guidance picture, with a particular focus on the broader 'travel' space, with results from Uber, Airbnb, Expedia, Booking and others coming out this week.
By this time next week, we will have seen Q2 results from 86% of the S&P 500 members.
The Current Earnings Backdrop
The +5.7% earnings growth expected in 2022 Q2 is solely due to strong gains in the Energy sector. On an ex-Energy basis, Q2 earnings growth drops to a decline of -4.2%.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>A Stable Earnings Picture Despite Many Headwinds
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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/performancefor information about the performance numbers displayed in this press release.