Back to top

Image: Shutterstock

Zacks Earnings Trends Highlights: Hilton Worldwide, Las Vegas Sands, Southwest and General Electric

Read MoreHide Full Article

For Immediate Release

Chicago, IL – March 31, 2022 – Director of Research Sheraz Mian says, "Total S&P 500 earnings for the first quarter of 2022 are expected to be up +3.5% from the same period last year on +10.0% higher revenues. Earnings growth for the quarter would be modestly in negative territory on an ex-Energy basis."

Keeping Track of the Earnings Revision Trend

Note: The following is an excerpt from this week's Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>

Here are the key points:

  • Earnings growth was all along expected to decelerate in the current and coming periods on account of normalization and tough comparisons. But now macroeconomic headwinds are adding to the moderating growth outlook.
  • Total S&P 500 earnings for the first quarter of 2022 are expected to be up +3.5% from the same period last year on +10.0% higher revenues. Earnings growth for the quarter would be modestly in negative territory on an ex-Energy basis.

The overall earnings picture has been very strong lately, with the growth rates and the absolute dollar totals at very high levels. The growth pace decelerates significantly in the coming periods.

Looking at the revisions trend in the aggregate, estimates are still going up, though only modestly so. There are plenty of cross currents once we look at the revisions trend at the granular level, with rising estimates in a few sectors offsetting estimate cuts in others.

In fact, estimates have been going down for 9 of the 16 Zacks sectors since the start of the year, with the biggest declines in the Consumer Discretionary, Utilities, Transportation, and Conglomerates sectors. Offsetting these negative estimate revisions to full-year 2022 estimates, are rising estimates for the Energy, Construction and Autos sectors.

Hilton Worldwide (HLT - Free Report) and Las Vegas Sands (LVS - Free Report) are examples of Consumer Discretionary operators that have suffered estimate cuts lately. Examples from other sectors on the negative revisions side include Southwest (LUV - Free Report) in the Transportation sector and General Electric (GE - Free Report) in the Conglomerates sector.

Energy sector estimates had been going up as a result of rising oil prices, even before the Ukraine situation and we can see this within all of the major players in the sector. Estimates in the Construction and Auto sectors have been going up lately as well.

There is a rising degree of uncertainty about the outlook, being driven by a lack of macroeconomy visibility. The Ukraine situation appears to be exacerbating pre-existing supply-chain issues, which combined with its impact on oil prices, is weighing on the inflation situation in hard-to-predict ways. The evolving earnings revisions trend will reflect this macro backdrop.

Why Haven't You Looked at Zacks' Top Stocks?

Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.

See Stocks Free >>

Follow us on Twitter:  https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/

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.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

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.