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Kroger, C3.ai and DocuSign are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – September 9, 2023 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Kroger (KR - Free Report) , C3.ai (AI - Free Report) and DocuSign (DOCU - Free Report) .
Handicapping Q3 Earnings: What to Expect
It isn't news anymore that the overall earnings picture has unfolded much more positively and favorably than many thought possible just a few quarters back. The biggest contributing factor to this positive earnings surprise has been the resilience of the U.S. economy despite the Fed's extraordinary tightening cycle.
While a segment of the market is still of the 'recession-is-coming' view, the market as a whole appears to have taken its collective cue from the continuous run of steady and reassuring economic readings and come around to the soft-landing view of the ground reality.
Regular readers of our earnings commentary are aware of the stabilization in the aggregate earnings estimate revisions trend since the start of 2023 Q2, which followed the roughly year-long negative revisions trend.
Since early April 2023, earnings estimates for full-year 2023 have declined by -0.34% for the S&P 500 index as a whole, with declining estimates for 9 of the 16 Zacks sectors, particularly the Energy sector, offsetting notable gains with other sectors.
Estimates for the Energy sector have been consistently under pressure, with the aggregate 2023 earnings estimates for the sector getting cut by -11.4% since the start of April 2023. If not for this negative Energy sector revisions trend, aggregate earnings estimates for the remaining 15 Zacks sectors would have risen by +0.7% in that period.
Sectors enjoying positive estimate revisions in this time period include Tech, Construction, Autos, Consumer Discretionary, Industrial Products, Retail, and Consumer Discretionary.
We are seeing a similar revisions trend at play concerning estimates for 2023 Q3, whose advanced results will start coming out in the coming days.
The expectation currently is for S&P 500 earnings to decline by -1.5% in Q3 from the same period last year on +0.7% higher revenues. This would follow the -7.3% decline on +0.2% higher revenues in 2023 Q2.
2023 Q3 is expected to be the last period of declining earnings for the index, with positive growth resuming from 2023 Q4 onwards. In fact, had it not been for the Energy sector drag, earnings growth in 2023 Q3 would actually be positive.
Excluding the Energy sector, however, net margins would be modestly up from the year-earlier period.
This Week's Notable Earnings Releases
We have a relatively light reporting docket this week, with Kroger as the only S&P 500 member expected to report results. Kroger will be reporting results before the market's open on Friday, September 8th. Kroger shares lost ground in May and have lagged the broader market since then.
Other notable companies reporting this week include C3.ai and DocuSign. C3.ai shares are off their recent high but still remain outstanding performers this year, up +179.3% in the year-to-date period. AI shares were down following the last quarterly release on May 31st and have drifted lower since then. But it will be interesting to see if it can return to its earlier positive trajectory following its report after the market's close on Wednesday, September 6th.
DocuSign, which reports after the market's close on Thursday, September 7th, was a Covid darling but has struggled in the post-pandemic period. The stock is down about -7% this year, but it is actually down more than -60% from its Covid peak in the middle of 2021.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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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Kroger, C3.ai and DocuSign are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – September 9, 2023 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Kroger (KR - Free Report) , C3.ai (AI - Free Report) and DocuSign (DOCU - Free Report) .
Handicapping Q3 Earnings: What to Expect
It isn't news anymore that the overall earnings picture has unfolded much more positively and favorably than many thought possible just a few quarters back. The biggest contributing factor to this positive earnings surprise has been the resilience of the U.S. economy despite the Fed's extraordinary tightening cycle.
While a segment of the market is still of the 'recession-is-coming' view, the market as a whole appears to have taken its collective cue from the continuous run of steady and reassuring economic readings and come around to the soft-landing view of the ground reality.
Regular readers of our earnings commentary are aware of the stabilization in the aggregate earnings estimate revisions trend since the start of 2023 Q2, which followed the roughly year-long negative revisions trend.
Since early April 2023, earnings estimates for full-year 2023 have declined by -0.34% for the S&P 500 index as a whole, with declining estimates for 9 of the 16 Zacks sectors, particularly the Energy sector, offsetting notable gains with other sectors.
Estimates for the Energy sector have been consistently under pressure, with the aggregate 2023 earnings estimates for the sector getting cut by -11.4% since the start of April 2023. If not for this negative Energy sector revisions trend, aggregate earnings estimates for the remaining 15 Zacks sectors would have risen by +0.7% in that period.
Sectors enjoying positive estimate revisions in this time period include Tech, Construction, Autos, Consumer Discretionary, Industrial Products, Retail, and Consumer Discretionary.
We are seeing a similar revisions trend at play concerning estimates for 2023 Q3, whose advanced results will start coming out in the coming days.
The expectation currently is for S&P 500 earnings to decline by -1.5% in Q3 from the same period last year on +0.7% higher revenues. This would follow the -7.3% decline on +0.2% higher revenues in 2023 Q2.
2023 Q3 is expected to be the last period of declining earnings for the index, with positive growth resuming from 2023 Q4 onwards. In fact, had it not been for the Energy sector drag, earnings growth in 2023 Q3 would actually be positive.
Excluding the Energy sector, however, net margins would be modestly up from the year-earlier period.
This Week's Notable Earnings Releases
We have a relatively light reporting docket this week, with Kroger as the only S&P 500 member expected to report results. Kroger will be reporting results before the market's open on Friday, September 8th. Kroger shares lost ground in May and have lagged the broader market since then.
Other notable companies reporting this week include C3.ai and DocuSign. C3.ai shares are off their recent high but still remain outstanding performers this year, up +179.3% in the year-to-date period. AI shares were down following the last quarterly release on May 31st and have drifted lower since then. But it will be interesting to see if it can return to its earlier positive trajectory following its report after the market's close on Wednesday, September 6th.
DocuSign, which reports after the market's close on Thursday, September 7th, was a Covid darling but has struggled in the post-pandemic period. The stock is down about -7% this year, but it is actually down more than -60% from its Covid peak in the middle of 2021.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Breaking Down the Construction and Housing Earnings Picture
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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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.