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Alphabet, Disney, Snap, General Motors and Spotify are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – February 4, 2018 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Alphabet (GOOGL - Free Report) , Disney (DIS - Free Report) , Snap (SNAP - Free Report) , General Motors (GM - Free Report) and Spotify (SPOT - Free Report) .
Q4 Earnings Picture Better than Feared
The market has justifiably taken a sigh of relief about the picture emerging from the Q4 earnings season. Not that the earnings picture is great, but rather that it is not as bad as many in the market had feared ahead of the start of this earnings season.
Plenty of reports are still to come, with this week alone bringing in more than 500 earnings releases, including 98 from S&P 500 members. But with results from 235 S&P 500 members already out, the trends established already will most likely carry through the rest of this reporting cycle.
We will share the current scorecard and what’s on deck this week a little later, but let’s first point out the key trends that we have seen from the Q4 results through Friday, February 1st.
First, growth is decelerating. This isn’t a surprise, as we knew already that Q4 growth would be materially below the pace set in the first three quarters of the year.
Total earnings for the 113 index members that have reported are up +13.7% from the same period last year on +6.7% higher revenues. Earnings and revenue growth for the same cohort of companies had been +23.5% and +9.8% in the preceding earnings season, respectively.
The growth pace is on track to decelerate even further in the current and coming quarters, as we will show a little later.
Second, companies appear to be struggling to beat consensus EPS estimates.
For the 235 index members that have reported results already, 66.8% are beating EPS estimates and only 63.4% are beating revenue estimates. For the same cohort of companies, the proportion of positive EPS and revenue surprises was 77.9% and 62.1% in the Q3 earnings season, respectively.
The lag on this front earlier on was more notable on the revenues side, with revenue beats tracking below historical periods. But as you can see above, EPS beats are even more notably tracking below historical periods. The fact is that the Q4 EPS beats percentage is the lowest in more than 3 years.
With Q4 positive surprises this hard to come by, one would reasonably assume that perhaps estimates had been too high. We know that wasn’t the case as estimates for the quarter had fallen the most of any other recent periods.
Third, estimates for 2019 Q1 and full-year 2019 are coming down in a major way, with the Q1 growth rate now in negative territory.
The negative revisions to 2019 Q1 estimates are along the same lines that we saw ahead of the start of the Q4 earnings season as well. Estimates for full-year 2019 have been coming down as well.
Estimates were effectively unchanged during the September quarter, but they have been on a consistent downtrend since early October. Many in the market suspect that estimates have further to drop before stabilizing.
Key Earnings Reports This Week
We have more than 500 companies coming out with quarterly reports this week, including 98 S&P 500 members.
Monday, February 4th: Google’s parent Alphabet will be the more prominent of the 13 S&P 500 members reporting results on Monday. With two-thirds of the Tech sector’s market capitalization in the S&P 500 index having already reported Q4 results, the Alphabet release will be the last major earnings report for this space. The search giant is expected to have earned $11.08 in earnings per share on $31.28 billion in revenues, up +14.2% and +20.9% from the same period last year, respectively. The stock was up following the last two earnings reports and has been an active participant in the post-Christmas rally.
Tuesday, February 5th: We have 25 index members reporting results on Tuesday, of which 12 will come out before the market’s open and the rest after the market’s close. There is no shortage of big-name reporters today, but Disney will be the day’s highlight as it comes out with results after the market’s close. In addition to actual results, the earnings call will likely include updates on the company’s pending purchase of 21st Century Fox.
Another notable company reporting after the market’s close on Tuesday is Snap, with the struggling social-media player expected to have lost 8 cents per share on $376.6 million in revenues, up +38.5% and +31.8% from the year-earlier period, respectively. The stock was down following each of the last three quarterly releases and has been a big time laggard, likely providing for an easy set up for a positive surprise.
Wednesday, February 6th: We have 19 S&P 500 members reporting results on Wednesday, with General Motors and Spotify in the morning and Chipotle Mexican Grill (CMG) after the market’s close as the major reporters.
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.
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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Alphabet, Disney, Snap, General Motors and Spotify are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – February 4, 2018 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Alphabet (GOOGL - Free Report) , Disney (DIS - Free Report) , Snap (SNAP - Free Report) , General Motors (GM - Free Report) and Spotify (SPOT - Free Report) .
Q4 Earnings Picture Better than Feared
The market has justifiably taken a sigh of relief about the picture emerging from the Q4 earnings season. Not that the earnings picture is great, but rather that it is not as bad as many in the market had feared ahead of the start of this earnings season.
Plenty of reports are still to come, with this week alone bringing in more than 500 earnings releases, including 98 from S&P 500 members. But with results from 235 S&P 500 members already out, the trends established already will most likely carry through the rest of this reporting cycle.
We will share the current scorecard and what’s on deck this week a little later, but let’s first point out the key trends that we have seen from the Q4 results through Friday, February 1st.
First, growth is decelerating. This isn’t a surprise, as we knew already that Q4 growth would be materially below the pace set in the first three quarters of the year.
Total earnings for the 113 index members that have reported are up +13.7% from the same period last year on +6.7% higher revenues. Earnings and revenue growth for the same cohort of companies had been +23.5% and +9.8% in the preceding earnings season, respectively.
The growth pace is on track to decelerate even further in the current and coming quarters, as we will show a little later.
Second, companies appear to be struggling to beat consensus EPS estimates.
For the 235 index members that have reported results already, 66.8% are beating EPS estimates and only 63.4% are beating revenue estimates. For the same cohort of companies, the proportion of positive EPS and revenue surprises was 77.9% and 62.1% in the Q3 earnings season, respectively.
The lag on this front earlier on was more notable on the revenues side, with revenue beats tracking below historical periods. But as you can see above, EPS beats are even more notably tracking below historical periods. The fact is that the Q4 EPS beats percentage is the lowest in more than 3 years.
With Q4 positive surprises this hard to come by, one would reasonably assume that perhaps estimates had been too high. We know that wasn’t the case as estimates for the quarter had fallen the most of any other recent periods.
Third, estimates for 2019 Q1 and full-year 2019 are coming down in a major way, with the Q1 growth rate now in negative territory.
The negative revisions to 2019 Q1 estimates are along the same lines that we saw ahead of the start of the Q4 earnings season as well. Estimates for full-year 2019 have been coming down as well.
Estimates were effectively unchanged during the September quarter, but they have been on a consistent downtrend since early October. Many in the market suspect that estimates have further to drop before stabilizing.
Key Earnings Reports This Week
We have more than 500 companies coming out with quarterly reports this week, including 98 S&P 500 members.
Monday, February 4th: Google’s parent Alphabet will be the more prominent of the 13 S&P 500 members reporting results on Monday. With two-thirds of the Tech sector’s market capitalization in the S&P 500 index having already reported Q4 results, the Alphabet release will be the last major earnings report for this space. The search giant is expected to have earned $11.08 in earnings per share on $31.28 billion in revenues, up +14.2% and +20.9% from the same period last year, respectively. The stock was up following the last two earnings reports and has been an active participant in the post-Christmas rally.
Tuesday, February 5th: We have 25 index members reporting results on Tuesday, of which 12 will come out before the market’s open and the rest after the market’s close. There is no shortage of big-name reporters today, but Disney will be the day’s highlight as it comes out with results after the market’s close. In addition to actual results, the earnings call will likely include updates on the company’s pending purchase of 21st Century Fox.
Another notable company reporting after the market’s close on Tuesday is Snap, with the struggling social-media player expected to have lost 8 cents per share on $376.6 million in revenues, up +38.5% and +31.8% from the year-earlier period, respectively. The stock was down following each of the last three quarterly releases and has been a big time laggard, likely providing for an easy set up for a positive surprise.
Wednesday, February 6th: We have 19 S&P 500 members reporting results on Wednesday, with General Motors and Spotify in the morning and Chipotle Mexican Grill (CMG) after the market’s close as the major reporters.
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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.
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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.