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Q1 Earnings Reports Kick Off This Week

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Monday, April 10, 2017

We start this latest week in the markets with a shortened 4 days of trading sessions, with this Friday the Good Friday holiday ahead of Easter Sunday. Combine this with Q1 earnings reports expected and the aftermath of the Trump administration’s cruise missile strike on a Syrian air strip, and we have the makings for a lot of news progress in not a lot of days.

Last week ended with a disappointing headline number of new jobs created in the month of March, according to the latest BLS non-farm payroll survey. The Retail sector shredding 30K jobs in the month and poorer weather from the previous month were the thumbs on the negative scales. But internals were strong, resulting in a 4.5% unemployment rate, the lowest in 10 years — before the scorched-earth Great Recession re-set the employment table.

Later this week, instead of parsing out new earnings reports from the big banks, they’re all happening on Thursday morning: JPMorgan (JPM - Free Report) , Citigroup (C - Free Report) , Wells Fargo (WFC - Free Report) and PNC Financial Services (PNC - Free Report) will release Q1 figures before the bell, constituting a large amount of S&P 500 market cap overall, signaling whether Q1 earnings season overall has strength or questions regarding it. For a comprehensive report on Q1 earnings season, please check out Zacks Director of Research Sheraz Mian’s latest Earnings Preview here: Can Banks Get Their Mojo Back?

Other important companies report earnings this week, as well, including Delta Air Lines (DAL - Free Report) and industrial products maker Fastenal (FAST - Free Report) on Wednesday afternoon. Delta has recently endured a headache regarding flight cancellations (120) and delayed ones (180) recently. Zacks Rank #3 (Hold)-rated Delta just met bottom-line expectations for Q4, and have a 2.2% average earnings surprise over the last 4 quarters.

For Wells Fargo, even with its recent account scandal, is up 21% since election day, and we now see a report released on the company’s sales practices, including a $75 million “claw-back” of compensation for Wells Fargo executives, including $28 million from former CEO Strumpf. Wells Fargo is also a Zacks Rank #3 currently, with an average positive earnings surprise over the last 4 quarters of 1%.

Finally, AT&T (T - Free Report) makes headlines this morning with its $1.6 billion all-stock buyout of Straight Path Communications . This amounts to $95.63 per share, and a whopping 204% implied premium from Friday’s closing share price of STRP. This is being read as a strong play for 5G spectrum for AT&T, and STRP shares are +155% ahead of this morning’s opening bell.

Mark Vickery
Senior Editor

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