First-quarter corporate earnings are in full swing this week as a number of the largest U.S. banks and the leading streaming company are set to report. More than 35 S&P 500 firms are available to release their latest quarterly results, including Goldman Sachs, Bank of America and Morgan Stanley. Netflix is waiting within the starting blocks. The reporting period got off to a difficult start on Friday. JPMorgan Chase reported better-than-expected results, but concerns about net interest income pressured the stock. So far, about 30 S&P 500 names have released first-quarter numbers. Of those, 80% exceeded expectations, FactSet data shows. Take a have a look at CNBC Pro’s breakdown of expectations for a few of this week’s biggest stories. All times are eastern. On Monday, Goldman Sachs will announce results before the bell, followed by a conference call at 9:30 a.m. Last quarter: GS reported fourth-quarter revenue that beat analysts’ expectations because of better-than-expected asset management results. This quarter: Analysts expect Goldman to report a slight increase in revenue in comparison with the identical period last yr, in keeping with LSEG. What CNBC is watching: The investment bank’s stock comes into the quarterly report after consecutive weekly losses. Can Q1 numbers get Goldman back on the right track? JMP Securities analyst Devin Ryan noted earlier this month that he preferred Goldman Sachs to rival Morgan Stanley, citing a more attractive valuation. “This assessment is not negative for Morgan Stanley’s business model, but rather an indication that valuation was already reflecting a more normalized return profile, while Goldman Sachs’ valuation was temporarily mispriced in anticipation of inevitable normalization,” Ryan said. What History Shows: According to Bespoke Investment Group, Goldman Sachs beats earnings estimates 85% of the time. However, shares fell on three of the last five reporting days, including once by 6.4%. On Tuesday, Bank of America will report its results before the opening bell. A phone call with management is scheduled for 8:30 a.m. Last quarter: BAC shares fell after the bank reported a decline in fourth-quarter profit. This quarter: The Charlotte-based banking giant is predicted to post an almost 20% drop in profit year-over-year, in keeping with LSEG. What CNBC is watching: Bank of America shares have struggled these days, losing 5.6% this month as investors reassessed their rate of interest cut expectations. In early April, UBS downgraded BofA to “neutral” from “buy,” noting that while the bank theoretically makes extra money with higher rates of interest, it has “concerns about the economy and its state.” [held-to-maturity bond] The portfolio could resurface and have a greater negative impact on market metrics.” What history shows: According to Bespoke, BofA beats earnings estimates 79% of the time. The stock averaged a 0.7% decline on the earnings day, but posted gains after nine of the last 10 releases. UnitedHealth is predicted to report earnings premarket, followed by a conference call at 8:45 a.m. Last quarter: UNH reported higher earnings and revenue, but shares fell greater than 3% this quarter LSEG data shows the corporate is predicted to post modest year-over-year gains and revenue: The health insurer needs to begin its Q1 report A 16% drop in profits on account of the fallout from a cyberattack and a smaller-than-expected increase in Medicare Advantage premiums are putting pressure on the Dow Jones Industrial Average member. Can the corporate’s report spark a comeback? What history shows: Since the start of 2018, UnitedHealth has missed earnings expectations only twice. The stock also performed well on the balance sheet date previously and rose by a mean of 0.8%. Morgan Stanley is predicted to report earnings before the open. An earnings conference call can be scheduled for 9:30 a.m. Last quarter: MS’s revenue beat expectations, however the CEO warned of impending geopolitical and economic risks. This quarter: Analysts surveyed by LSEG expect slight year-over-year declines in profits and sales. What CNBC is watching: Morgan Stanley suffered a setback last week, falling greater than 6%, after the Wall Street Journal reported that multiple regulators are investigating how the corporate’s wealth management division vets clients susceptible to money laundering. Investors will stay updated on how the bank will take care of the changing rate of interest environment. What history shows: According to Bespoke, the Wall Street bank recorded a mean profit of 0.8% on the balance sheet date. Additionally, the corporate beats earnings estimates 78% of the time. United Airlines is predicted to report profits after the market closes. A call is scheduled for 10:30 a.m. the next day. Last quarter: UAL expects to post a loss in the primary quarter on account of the grounding of Boeing 737 Max 9 aircraft. This quarter: According to LSEG, the airline’s revenue is predicted to have grown nearly 9% year-over-year. What CNBC airline reporter Leslie Josephs observes: Investors can be focused on how much United can grow in the approaching months and years. United is one in all the airlines affected by Boeing’s delayed deliveries. The airline attributes the delay to its decision to suspend pilot hiring this spring and provides pilots unpaid leave. There can be additional oversight from the Federal Aviation Administration over United’s recent mechanical problems, including a tire that fell off a 777 because it left San Francisco last month. In early April, United announced it will postpone two routes, pending the FAA’s safety review. United has canceled its investor day because it focuses on reviewing the FAA’s safety protocol. What history shows: United has beaten profit expectations for six quarters in a row, Bespoke data shows. In 4 of those cases, the stock also recorded strong gains. Netflix will report earnings after the market closes on Thursday. A gathering with management is scheduled for 4:45 p.m. Last quarter: NFLX rose 10% because of strong subscriber growth and better-than-expected revenue. This quarter: The dominant U.S. streaming platform is predicted to post greater than 50% year-over-year profit growth, in keeping with LSEG. What CNBC is watching: Netflix shares have been on a tear this yr, rising greater than 27%. Oppenheimer analyst Jason Helfstein noted that momentum may proceed in first-quarter results. He expects strong ad-supported subscriptions and said: “Paid sharing will take longer than initially thought, with only 20% of the 100 million opportunity captured so far.” What history shows: According to Bespoke, Netflix beats earnings estimates 80% of the time . On the balance sheet date, shares rose a mean of only 0.1%, but after the publication of the last two reports they recorded double-digit increases. On Friday, Procter & Gamble will report earnings before the close, followed by a conference call at 8:30 a.m. Last quarter: PG reported earnings that beat expectations as price increases gave the corporate a lift. This quarter: Ivory soap and Crest toothpaste maker is predicted to post modest profit and revenue growth from the identical period last yr, in keeping with LSEG. What CNBC is watching: Procter’s results may very well be mixed, in keeping with Morgan Stanley analyst Dara Mohsenian. In an April 7 note, he said organic sales growth may very well be weak, but added that gross margins may very well be strong. “We stay [overweight] In the long term, with PG continuing to gain market share with strong implementation, despite weaker development [organic sales growth] on the near-term weakness of the beauty category in China and the category’s slowing growth in developed markets as prices decline, as well as an improvement [organic sales growth] “FY25 trends as PG rides through near-term China weakness and should benefit from reinvestment in FY24,” the analyst wrote. What History Shows: Bespoke data shows that Procter has beaten earnings estimates in each of the last four quarters, posting earnings-day gains of at least 2.6% in each of the last four quarters.
Tuesday, November 26, 2024
