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Zacks Earnings Trends Highlights: Apple, Microsoft, Amazon, Meta and Alphabet
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For Immediate Release
Chicago, IL – May 12, 2022 – Zacks Director of Research Sheraz Mian says "While the Q1 earnings season has been fairly good and reassuring in most respects, we have nevertheless been struck by major companies' inability to beat consensus estimates."
A Stable Earnings Picture Despite Market Selloff
Note: The following is an excerpt from this week'sEarnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
While the Q1 earnings season has been fairly good and reassuring in most respects, we have nevertheless been struck by major companies' inability to beat consensus estimates.
This issue was particularly notable for the Finance sector, where most of the major players missed estimates, though beats became more widespread as the Q1 reporting cycle matured. You can see this in the EPS and revenue beats percentages for the 454 S&P 500 members that have reported Q1 results already.
Rising costs and logistical bottlenecks have been weighing on margins, with Q1 net margins for the 454 index members that have reported down 58 basis points from the year-earlier period. Q1 net margins are below the year-earlier level for half of the 16 Zacks sectors, including the Technology sector.
For the Big 5 Technology players – Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , Meta and Alphabet (GOOGL - Free Report) – Q1 earnings declined -8.4% on +11.4% higher revenues. This implies 421 basis-point net margin compression for these Tech giants, with the biggest declines at Alphabet and Meta, followed by Amazon.
Looking at Q1 as a whole, total S&P 500 earnings are expected to be up +9.3% on +13.4% higher revenues. This is a significant deceleration from what we have been seeing in the preceding quarters.
There is a rising degree of uncertainty about the outlook, being driven by a lack of macroeconomic visibility in a backdrop of Fed monetary policy tightening.
The Ukraine situation is 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?
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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.
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.
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Zacks Earnings Trends Highlights: Apple, Microsoft, Amazon, Meta and Alphabet
For Immediate Release
Chicago, IL – May 12, 2022 – Zacks Director of Research Sheraz Mian says "While the Q1 earnings season has been fairly good and reassuring in most respects, we have nevertheless been struck by major companies' inability to beat consensus estimates."
A Stable Earnings Picture Despite Market Selloff
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>>>
While the Q1 earnings season has been fairly good and reassuring in most respects, we have nevertheless been struck by major companies' inability to beat consensus estimates.
This issue was particularly notable for the Finance sector, where most of the major players missed estimates, though beats became more widespread as the Q1 reporting cycle matured. You can see this in the EPS and revenue beats percentages for the 454 S&P 500 members that have reported Q1 results already.
Rising costs and logistical bottlenecks have been weighing on margins, with Q1 net margins for the 454 index members that have reported down 58 basis points from the year-earlier period. Q1 net margins are below the year-earlier level for half of the 16 Zacks sectors, including the Technology sector.
For the Big 5 Technology players – Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Amazon (AMZN - Free Report) , Meta and Alphabet (GOOGL - Free Report) – Q1 earnings declined -8.4% on +11.4% higher revenues. This implies 421 basis-point net margin compression for these Tech giants, with the biggest declines at Alphabet and Meta, followed by Amazon.
Looking at Q1 as a whole, total S&P 500 earnings are expected to be up +9.3% on +13.4% higher revenues. This is a significant deceleration from what we have been seeing in the preceding quarters.
There is a rising degree of uncertainty about the outlook, being driven by a lack of macroeconomic visibility in a backdrop of Fed monetary policy tightening.
The Ukraine situation is 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.
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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/performancefor information about the performance numbers displayed in this press release.