We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Citigroup, JPMorgan, and Goldman Sachs are part of Zacks Earnings Preview
Read MoreHide Full Article
For Immediate Release
Chicago, IL – April 18, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Citigroup (C - Free Report) , JPMorgan (JPM - Free Report) , and Goldman Sachs (GS - Free Report) .
Making Sense of Bank Earnings Amid Market and Economic Uncertainty
The market's favorable reaction to Citigroup's quarterly earnings report is largely a function of low expectations, not operating outperformance relative to what we saw from JPMorgan. The market appears relieved that Citi's Russia exposure, while still much bigger than JPMorgan and its other Wall Street peers, is manageable and relatively smaller compared to initial worst-case scenarios.
Citi handily beat top- and bottom-line estimates, unlike JPMorgan which beat revenue estimates but missed on the bottom line.
Aside from Citi's Russia exposure, the rest of its results were in-line with the trends we saw in the JPMorgan report. Investment banking revenues were down big, though trading revenues dropped less than what the market had been expecting earlier. The lower-than-feared drop in trading revenues, particularly for fixed income instruments, has been true at Citi, JPMorgan, and Goldman Sachs.
Loan portfolios increased at both JPMorgan and Citi, with credit card loans up +7% at Citi and +15% at JPMorgan. The improving trend in loan demand offers favorable read-throughs for the regional banks that are on deck to report results next week.
First quarter earnings at JPMorgan and Citi were down -42.1% and -45.4%, respectively from the same period last year. In addition to the aforementioned weakness in the capital market business, this year-over-year earnings decline is primarily a function of loan loss reserves that are hit to profits this quarter but were a benefit in the year-earlier period.
For the Zacks Major Banks industry, which includes Citi and JPMorgan and accounts for roughly 40% of total Finance sector earnings, total Q1 earnings are on track to be down -32.9% from the same period last year on +0.6% higher revenues.
The weak growth outlook for this industry is a major reason why Q1 earnings for the Zacks Finance sector are expected to be down -16.1% from the same period last year on +2.7% higher revenues.
With respect to the sector's Q1 earnings season scorecard, we now have results from 24.1% of the sector's market capitalization in the S&P 500 index. Total earnings for these Finance sector companies are down -33.2% from the same period last year on -3.9% lower revenues, with 81.8% beating EPS estimates and 63.6% beating revenue estimates.
This is a weaker showing than we have seen from this group of banks in other recent periods, as you can see in the comparison charts below that show how Q1 EPS and revenue beats percentages stack up to other recent periods.
Next week will bring results from all the regional banks in addition to Bank of America. Trends in loan portfolios and the outlook for costs will likely determine how the market responds to those results.
The 2022 Q1 Earnings Season Scorecard
Including the aforementioned bank results, we now have Q1 results from 35 S&P 500 members. Total Q1 earnings for these companies are down -17.6% from the same period last year on +8.8% higher revenues, with 80% beating EPS and revenue estimates.
We get into the heart of the Q1 earnings season next week, with more than 150 companies reporting results, including 63 S&P 500 members. This week's line-up of reports provides a representative cross-section of all sectors, ranging from Johnson & Johnson and Procter & Gamble to IBM, Netflix, Haliburton, and all the major regional banks and brokers.
Looking at Q1 as a whole, with actuals for these 35 index members and estimates for the still-to-come companies, total earnings are expected to be up +4.3% on +10% higher revenues.
Excluding the -16.1% decline in Finance sector earnings, the growth rate for the index improves to +10.7%. On the other hand, the Energy sector has a very robust earnings profile at present, with the sector expected to bring in +209% more earnings than the year-earlier period on +38.2% higher revenues. Excluding the hefty Energy sector contribution, earnings for the remainder of the index would be down -1% on +8% higher revenues.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Mixed Start to the Q1 Earnings Season
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.
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/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Citigroup, JPMorgan, and Goldman Sachs are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – April 18, 2022 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Citigroup (C - Free Report) , JPMorgan (JPM - Free Report) , and Goldman Sachs (GS - Free Report) .
Making Sense of Bank Earnings Amid Market and Economic Uncertainty
The market's favorable reaction to Citigroup's quarterly earnings report is largely a function of low expectations, not operating outperformance relative to what we saw from JPMorgan. The market appears relieved that Citi's Russia exposure, while still much bigger than JPMorgan and its other Wall Street peers, is manageable and relatively smaller compared to initial worst-case scenarios.
Citi handily beat top- and bottom-line estimates, unlike JPMorgan which beat revenue estimates but missed on the bottom line.
Aside from Citi's Russia exposure, the rest of its results were in-line with the trends we saw in the JPMorgan report. Investment banking revenues were down big, though trading revenues dropped less than what the market had been expecting earlier. The lower-than-feared drop in trading revenues, particularly for fixed income instruments, has been true at Citi, JPMorgan, and Goldman Sachs.
Loan portfolios increased at both JPMorgan and Citi, with credit card loans up +7% at Citi and +15% at JPMorgan. The improving trend in loan demand offers favorable read-throughs for the regional banks that are on deck to report results next week.
First quarter earnings at JPMorgan and Citi were down -42.1% and -45.4%, respectively from the same period last year. In addition to the aforementioned weakness in the capital market business, this year-over-year earnings decline is primarily a function of loan loss reserves that are hit to profits this quarter but were a benefit in the year-earlier period.
For the Zacks Major Banks industry, which includes Citi and JPMorgan and accounts for roughly 40% of total Finance sector earnings, total Q1 earnings are on track to be down -32.9% from the same period last year on +0.6% higher revenues.
The weak growth outlook for this industry is a major reason why Q1 earnings for the Zacks Finance sector are expected to be down -16.1% from the same period last year on +2.7% higher revenues.
With respect to the sector's Q1 earnings season scorecard, we now have results from 24.1% of the sector's market capitalization in the S&P 500 index. Total earnings for these Finance sector companies are down -33.2% from the same period last year on -3.9% lower revenues, with 81.8% beating EPS estimates and 63.6% beating revenue estimates.
This is a weaker showing than we have seen from this group of banks in other recent periods, as you can see in the comparison charts below that show how Q1 EPS and revenue beats percentages stack up to other recent periods.
Next week will bring results from all the regional banks in addition to Bank of America. Trends in loan portfolios and the outlook for costs will likely determine how the market responds to those results.
The 2022 Q1 Earnings Season Scorecard
Including the aforementioned bank results, we now have Q1 results from 35 S&P 500 members. Total Q1 earnings for these companies are down -17.6% from the same period last year on +8.8% higher revenues, with 80% beating EPS and revenue estimates.
We get into the heart of the Q1 earnings season next week, with more than 150 companies reporting results, including 63 S&P 500 members. This week's line-up of reports provides a representative cross-section of all sectors, ranging from Johnson & Johnson and Procter & Gamble to IBM, Netflix, Haliburton, and all the major regional banks and brokers.
Looking at Q1 as a whole, with actuals for these 35 index members and estimates for the still-to-come companies, total earnings are expected to be up +4.3% on +10% higher revenues.
Excluding the -16.1% decline in Finance sector earnings, the growth rate for the index improves to +10.7%. On the other hand, the Energy sector has a very robust earnings profile at present, with the sector expected to bring in +209% more earnings than the year-earlier period on +38.2% higher revenues. Excluding the hefty Energy sector contribution, earnings for the remainder of the index would be down -1% on +8% higher revenues.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>> Mixed Start to the Q1 Earnings Season
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 >>
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/performancefor information about the performance numbers displayed in this press release.