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Zacks Earnings Trends Highlights: Microsoft, Apple, Alphabet, Nvidia and Tesla
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For Immediate Release
Chicago, IL – October 19, 2023 – Zacks Director of Research Sheraz Mian says, "We are off to a positive start to the Q3 earnings season, with most companies not only beating estimates but also providing reassuring guidance for the coming periods."
Q3 Earnings Season Kicks Off Positively
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:
We are off to a positive start to the Q3 earnings season, with most companies not only beating estimates but also providing reassuring guidance for the coming periods.
For the 53 S&P 500 companies that have reported Q3 results, total earnings are up +6% from the same period last year on +6.6% higher revenues, with 84.9% beating EPS estimates and 67.9% beating revenue estimates.
At this stage in the reporting cycle, the EPS beats percentage of 84.9% is tracking above other recent periods and the 20-quarter average of 79.7% for this group of companies.
Looking at Q3 as a whole, total S&P 500 earnings are currently expected to be down -1.1% from the same period last year on +0.8% higher revenues, the 4th back-to-back quarter of declining earnings for the index.
We are off to a good start in the Q3 earnings season, though the focus at this early stage has been largely on the Finance sector. Most of the big banks came out with better-than-expected Q3 results and described ongoing business trends in relatively reassuring and favorable terms.
This has to count as a big positive for the group, given the all-around negative views on the sector.
Beyond the Finance sector, looking at Q3 expectations as a whole, total S&P 500 earnings are expected to be down -1.1% from the same period last year on +0.8% higher revenues.
One key sector whose earnings outlook has been steadily improving lately is the Technology sector, whose members will be coming out with Q3 results in the next few days. The sector has been operating in a constrained growth environment since 2021 Q4, but this is on track to change starting with the group’s Q3 results.
A significant source of growth for the group is the 7 mega-cap stocks, most of which are from the Tech sector. We call this group the ‘Big 7 Tech Players’, which includes Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) , Nvidia (NVDA - Free Report) , Tesla (TSLA - Free Report) and others.
Q3 earnings for this group of companies are expected to grow by +34.9% from the same period last year on +11.2% higher revenues.
The ‘Big 7 Tech Players’ are a big contributor to overall index earnings now and going forward. Excluding the earnings contribution from the ‘Big 7’, S&P 500 earnings for the rest of the index would be down -6.4% (down -1.1% otherwise).
Given the emerging consensus on the ‘soft-landing’ outlook for the economy, one can expect this favorable turn in the overall earnings picture to strengthen further as companies report Q3 results and share trends in underlying business.
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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/performance for information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Microsoft, Apple, Alphabet, Nvidia and Tesla
For Immediate Release
Chicago, IL – October 19, 2023 – Zacks Director of Research Sheraz Mian says, "We are off to a positive start to the Q3 earnings season, with most companies not only beating estimates but also providing reassuring guidance for the coming periods."
Q3 Earnings Season Kicks Off Positively
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:
We are off to a good start in the Q3 earnings season, though the focus at this early stage has been largely on the Finance sector. Most of the big banks came out with better-than-expected Q3 results and described ongoing business trends in relatively reassuring and favorable terms.
This has to count as a big positive for the group, given the all-around negative views on the sector.
Beyond the Finance sector, looking at Q3 expectations as a whole, total S&P 500 earnings are expected to be down -1.1% from the same period last year on +0.8% higher revenues.
One key sector whose earnings outlook has been steadily improving lately is the Technology sector, whose members will be coming out with Q3 results in the next few days. The sector has been operating in a constrained growth environment since 2021 Q4, but this is on track to change starting with the group’s Q3 results.
A significant source of growth for the group is the 7 mega-cap stocks, most of which are from the Tech sector. We call this group the ‘Big 7 Tech Players’, which includes Apple (AAPL - Free Report) , Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) , Nvidia (NVDA - Free Report) , Tesla (TSLA - Free Report) and others.
Q3 earnings for this group of companies are expected to grow by +34.9% from the same period last year on +11.2% higher revenues.
The ‘Big 7 Tech Players’ are a big contributor to overall index earnings now and going forward. Excluding the earnings contribution from the ‘Big 7’, S&P 500 earnings for the rest of the index would be down -6.4% (down -1.1% otherwise).
Given the emerging consensus on the ‘soft-landing’ outlook for the economy, one can expect this favorable turn in the overall earnings picture to strengthen further as companies report Q3 results and share trends in underlying business.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. 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/performance for information about the performance numbers displayed in this press release.