Earnings season charges ahead – What to know in markets Tuesday
Investors on Tuesday will continue parsing through an onslaught of earnings results in search of signals for the directions of future growth in the corporate world.
More than 30% of companies in the S&P 500 report results this week. Tuesday’s docket of earnings announcements encompass a broad range of sectors, from industrial heavyweight United Technologies to consumer goods companies including Coca-Cola and Procter & Gamble, plus social media platforms Twitter and Snap.
Here’s what Wall Street expects to see on the the top- and bottom-lines for some of Tuesday’s major company results, based on data compiled by Bloomberg:
Coca-Cola (KO): Adjusted EPS 46 cents, revenue $7.9 billion
eBay (EBAY): Adjusted EPS 63 cents, revenue $2.58 billion
Procter & Gamble (PG): Adjusted EPS $1.03, revenue $16.36 billion
Snap (SNAP): Adjusted loss per share 12 cents, revenue $307 million
Twitter (TWTR): Adjusted EPS 15 cents, revenue $775 million
Texas Instruments (TXN): Adjusted EPS $1.15, revenue $3.48 billion
United Technologies (UTX): Adjusted EPS $1.71, revenue $17.99 billion
These companies report results amid signs throughout the first quarter pointing to strength in consumer spending, which could translate to solid results amid firms whose products or services directly or indirectly rely on the robustness of consumers’ wallets.
Retail sales jumped in March to the quickest pace since the end of 2017, while consumer confidence leapt in February before tempering somewhat in March. Jamie Dimon, CEO of JPMorgan Chase and Co., wrote in a widely read letter to shareholders earlier this month that “consumer and business confidence remains strong,” and “the consumer balance sheet and credit are in rather good shape.”
Likewise, industrial conglomerate and Dow component United Technologies reports quarterly results Tuesday amid a rebound in U.S. factory activity data versus the end of last year, with the Institute of Supply Management’s most recent reading on the manufacturing sector exceeding expectations for March.
Other industrial sector components have largely posted strong results for the reported quarter, with peer Honeywell (HON) last week raising full-year guidance and beating first-quarter profit estimates due to stronger demand in its aerospace unit.
Companies reporting first-quarter results face a low bar for bottom-line expectations as investors anticipate a year-over-year decline in earnings after last year’s profit-boosting corporate tax cut. Other concerns driving these predictions had been the specter of a slowdown in the broader economy and ongoing trade tensions with China.
Heading into first-quarter reports, consensus on Wall Street was to see a first-quarter decline in earnings of 4.1% over last year in aggregate among S&P 500 companies, along with a 1.8% decline in EPS growth, according to Jonathan Golub, chief equity strategist at Credit Suisse.
Against a backdrop of already deflated expectations, companies reporting worse-than-expected results for the first quarter have been penalized more harshly by investors than companies reporting beats, according to a Bank of America Merrill Lynch analysis. As of Monday, companies that missed consensus estimates for EPS and sales have underperformed the S&P 500 by 3 percentage points on average the next day. On the other hand, companies that beat expectations outperformed by just 1.2 percentage points the next day.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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