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Disney, eBay and Tyson Foods are part of Zacks Earnings Preview
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For Immediate Release
Chicago, IL – August 9, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes The Walt Disney Company (DIS - Free Report) , eBay Inc. (EBAY - Free Report) and Tyson Foods, Inc. (TSN - Free Report) .
The 3 Most Notable Features of Q2 Earnings Season
Regular readers of our earnings discussions know that we have been very impressed with the all-around strength and momentum of the Q2 earnings season. That said, the three features we dive into here really standout to us as we move into the final phase of this reporting cycle.
On the reporting docket this week (week of August 9th), we will have results from more than 650 companies, including 13 S&P 500 members. The more prominent companies reporting results this week include Disney, eBay, Tyson Foods and others. By the end of this week, we will have seen Q2 results from 457 S&P 500 members or 91.4% of the index’s total membership.
The first notable feature of the Q2 earnings season is the impressive momentum on the revenue side, both in terms of growth rate as well as the beats percentages.
For the 444 S&P 500 companies that had reported Q2 results through Friday, August 6th, earnings and revenues were up +105.1% and +27.4%, respectively. The proportion of these companies beating consensus EPS and revenue estimates came in at 87.4% and 86.9%, respectively. The proportion of these 444 companies beating both EPS and revenue estimates, the so-called ‘blended’ beats percentage, is at 80%.
These are impressive numbers any way you look at them, but the momentum on the revenue side is particularly notable.
The second notable feature of the Q2 earnings season is the magnitude of corporate profitability. The Q2 earnings growth rate has undoubtedly benefited from easy comparisons to the year-earlier period which was hit hard by the pandemic-related lockdowns. But it isn’t only easy comparisons, corporate profitability really is very high even though a number of sectors still have some ways to go before getting back to pre-Covid profitability levels.
Q2 earnings are on track to reach a new all-time quarterly record, surpassing the record set last quarter (Q1 FY21).
The third notable feature of the Q2 earnings season pertains to the revisions trend for third quarter earnings estimates. Total S&P 500 earnings in Q3 are expected to be up +26.3% on +13.2% higher revenues.
Please note the while the revisions trend remains positive, in line with the trend we have been seeing since last Summer, the magnitude of upward revisions is on the lower side relative to what we had seen in the preceding quarter’s comparable period. Perhaps it is nothing more than some cautiousness in the face of the Delta variant, but is something we will be closely monitoring.
What is Expected for Q2 & Beyond?
Looking at Q2 on a blended basis, combining the results that have come out with estimates for the still-to-come companies, total earnings for the S&P 500 index are currently expected to be up +91.8% from the same period last year on +24.2% higher revenues, with the growth rate steadily going up as companies come out with better-than-expected results. This would follow the +49.9% earnings growth on +10.3% higher revenues in 2021 Q1.
A big part of the unusually strong earnings growth expected in the Q2 earnings season is due to easy comparisons to last year’s Covid-hit period. But as we have been consistently pointing out, not all of the growth is a result of easy comparisons. In fact, Q2 earnings are on track to be up +29.9% from the pre-Covid 2019 Q2 period and are on track to reach a new all-time quarterly record.
2021 earnings and revenues are expected to be up +40.6% and +11.6%, respectively, which follows the Covid-driven decline of -13.1% in 2020.
Please note the strong earnings growth expected in each of the next two years. This suggests that the market isn’t looking for a one-off rebound this year, but rather an enduring growth cycle that continues over the next couple of years.
To the extent that this growth outlook can improve as we move into the back half of 2021 will determine whether the overall earnings picture is getting better or leveling off.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>What’s Happening on the Earnings Front
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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Disney, eBay and Tyson Foods are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – August 9, 2021 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes The Walt Disney Company (DIS - Free Report) , eBay Inc. (EBAY - Free Report) and Tyson Foods, Inc. (TSN - Free Report) .
The 3 Most Notable Features of Q2 Earnings Season
Regular readers of our earnings discussions know that we have been very impressed with the all-around strength and momentum of the Q2 earnings season. That said, the three features we dive into here really standout to us as we move into the final phase of this reporting cycle.
On the reporting docket this week (week of August 9th), we will have results from more than 650 companies, including 13 S&P 500 members. The more prominent companies reporting results this week include Disney, eBay, Tyson Foods and others. By the end of this week, we will have seen Q2 results from 457 S&P 500 members or 91.4% of the index’s total membership.
The first notable feature of the Q2 earnings season is the impressive momentum on the revenue side, both in terms of growth rate as well as the beats percentages.
For the 444 S&P 500 companies that had reported Q2 results through Friday, August 6th, earnings and revenues were up +105.1% and +27.4%, respectively. The proportion of these companies beating consensus EPS and revenue estimates came in at 87.4% and 86.9%, respectively. The proportion of these 444 companies beating both EPS and revenue estimates, the so-called ‘blended’ beats percentage, is at 80%.
These are impressive numbers any way you look at them, but the momentum on the revenue side is particularly notable.
The second notable feature of the Q2 earnings season is the magnitude of corporate profitability. The Q2 earnings growth rate has undoubtedly benefited from easy comparisons to the year-earlier period which was hit hard by the pandemic-related lockdowns. But it isn’t only easy comparisons, corporate profitability really is very high even though a number of sectors still have some ways to go before getting back to pre-Covid profitability levels.
Q2 earnings are on track to reach a new all-time quarterly record, surpassing the record set last quarter (Q1 FY21).
The third notable feature of the Q2 earnings season pertains to the revisions trend for third quarter earnings estimates. Total S&P 500 earnings in Q3 are expected to be up +26.3% on +13.2% higher revenues.
Please note the while the revisions trend remains positive, in line with the trend we have been seeing since last Summer, the magnitude of upward revisions is on the lower side relative to what we had seen in the preceding quarter’s comparable period. Perhaps it is nothing more than some cautiousness in the face of the Delta variant, but is something we will be closely monitoring.
What is Expected for Q2 & Beyond?
Looking at Q2 on a blended basis, combining the results that have come out with estimates for the still-to-come companies, total earnings for the S&P 500 index are currently expected to be up +91.8% from the same period last year on +24.2% higher revenues, with the growth rate steadily going up as companies come out with better-than-expected results. This would follow the +49.9% earnings growth on +10.3% higher revenues in 2021 Q1.
A big part of the unusually strong earnings growth expected in the Q2 earnings season is due to easy comparisons to last year’s Covid-hit period. But as we have been consistently pointing out, not all of the growth is a result of easy comparisons. In fact, Q2 earnings are on track to be up +29.9% from the pre-Covid 2019 Q2 period and are on track to reach a new all-time quarterly record.
2021 earnings and revenues are expected to be up +40.6% and +11.6%, respectively, which follows the Covid-driven decline of -13.1% in 2020.
Please note the strong earnings growth expected in each of the next two years. This suggests that the market isn’t looking for a one-off rebound this year, but rather an enduring growth cycle that continues over the next couple of years.
To the extent that this growth outlook can improve as we move into the back half of 2021 will determine whether the overall earnings picture is getting better or leveling off.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>What’s Happening on the Earnings Front
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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 https://www.zacks.com/performance for information about the performance numbers displayed in this press release.