The earnings season is off to a brisk start with about 81 S&P 500 companies reporting this week. About 53 S&P 500 members have already released their results till Jan 19. Total earnings for these companies are up 11.7% year over year on 7.5% higher revenues, with 81.1% beating earnings estimates and 75.5% surpassing top-line expectations. Based on the hitherto observed pattern, the fourth quarter is anticipated to register modest double-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall earnings for all the S&P 500 are expected to be up 10.3% on 7.1% growth in revenues. This represents an improved growth projection from the previous quarter driven by a corporate tax overhaul and relatively healthy job data, which in turn boosted corporate earnings, stoked investments and trickled down to employees in some instances. Experts widely believe that earnings growth is likely to improve steadily in 2018 and beyond.
The Conglomerates sector appears to be a drag on the overall earnings. For the sector, earnings are expected to decline 16.6% year over year while sales are touted to rise 2.9% due to a likely disappointing performance by one of the leading players in the industry.
Let’s take a sneak peek at two major Conglomerate stocks scheduled to report fourth-quarter earnings tomorrow to see how things are shaping up for the upcoming results.
General Electric Company (GE - Free Report) is scheduled to report results before the opening bell. The company is likely to report lower industrial segment profit in the quarter owing to higher operating costs and $6.2 billion charges from the legacy insurance business. This has severely impaired CEO John Flannery’s plans to script a turnaround in the company, with 2018 being termed as a “reset year”. Flannery had earlier disclosed his plans to focus on just three core segments — power, aviation and health-care equipment — and gradually exit all other businesses to plug the downtrend. The company is now seriously contemplating to spin off its operations to maximize shareholder returns. (Read more: Will Lower Industrial Segment Profit Hurt GE's Q4 Earnings?)
In the fourth quarter, the company’s earnings are expected to fall 39% year over year on 4.3% lower revenues. For the impending quarter, the company has an Earnings ESP of 0.00%, and Zacks Rank #5 (Strong Sell), making an earnings surprise prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Technologies Corporation is scheduled to report results before the opening bell as well. The company is likely to report higher revenues in the impending quarter owing to a favorable macroeconomic environment. Revenues are largely affected by spending in the U.S. military and commercial aviation industries. An increase in demand for the company’s products in these industries is likely to favorably impact its financial performance in the quarter. The strong aftermarket business that sells spare parts and offers related services to keep the primary products running is also likely to record a healthy growth momentum with uptick in the economy. Furthermore, continued focus on four key priorities to fuel its growth momentum, namely flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation is likely to translate to improved performance in the quarter. We remain inconclusive on earnings beat prediction this quarter as it has an ESP of 0.00% and a Zacks Rank #2. (Read more: What to Expect From United Technologies' Q4 Earnings?)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The earnings season is off to a brisk start with about 81 S&P 500 companies reporting this week. About 53 S&P 500 members have already released their results till Jan 19. Total earnings for these companies are up 11.7% year over year on 7.5% higher revenues, with 81.1% beating earnings estimates and 75.5% surpassing top-line expectations. Based on the hitherto observed pattern, the fourth quarter is anticipated to register modest double-digit percentage earnings growth on a year-over-year basis.
Per the latest Earnings Preview, overall earnings for all the S&P 500 are expected to be up 10.3% on 7.1% growth in revenues. This represents an improved growth projection from the previous quarter driven by a corporate tax overhaul and relatively healthy job data, which in turn boosted corporate earnings, stoked investments and trickled down to employees in some instances. Experts widely believe that earnings growth is likely to improve steadily in 2018 and beyond.
The Conglomerates sector appears to be a drag on the overall earnings. For the sector, earnings are expected to decline 16.6% year over year while sales are touted to rise 2.9% due to a likely disappointing performance by one of the leading players in the industry.
Let’s take a sneak peek at two major Conglomerate stocks scheduled to report fourth-quarter earnings tomorrow to see how things are shaping up for the upcoming results.
General Electric Company (GE - Free Report) is scheduled to report results before the opening bell. The company is likely to report lower industrial segment profit in the quarter owing to higher operating costs and $6.2 billion charges from the legacy insurance business. This has severely impaired CEO John Flannery’s plans to script a turnaround in the company, with 2018 being termed as a “reset year”. Flannery had earlier disclosed his plans to focus on just three core segments — power, aviation and health-care equipment — and gradually exit all other businesses to plug the downtrend. The company is now seriously contemplating to spin off its operations to maximize shareholder returns. (Read more: Will Lower Industrial Segment Profit Hurt GE's Q4 Earnings?)
In the fourth quarter, the company’s earnings are expected to fall 39% year over year on 4.3% lower revenues. For the impending quarter, the company has an Earnings ESP of 0.00%, and Zacks Rank #5 (Strong Sell), making an earnings surprise prediction uncertain. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
United Technologies Corporation is scheduled to report results before the opening bell as well. The company is likely to report higher revenues in the impending quarter owing to a favorable macroeconomic environment. Revenues are largely affected by spending in the U.S. military and commercial aviation industries. An increase in demand for the company’s products in these industries is likely to favorably impact its financial performance in the quarter. The strong aftermarket business that sells spare parts and offers related services to keep the primary products running is also likely to record a healthy growth momentum with uptick in the economy. Furthermore, continued focus on four key priorities to fuel its growth momentum, namely flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation is likely to translate to improved performance in the quarter. We remain inconclusive on earnings beat prediction this quarter as it has an ESP of 0.00% and a Zacks Rank #2. (Read more: What to Expect From United Technologies' Q4 Earnings?)
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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