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Chicago, IL – September 3, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Nvidia (NVDA - Free Report) .
Looking Ahead to Q3 Earnings Season
Total Q3 earnings for the S&P 500 index are expected to be up +3.8% from the same period last year on +4.6% higher revenues. This would follow the +8.6% earnings growth for the index in the preceding period on +3.8% higher revenues.
Regular readers of our earnings commentary are familiar with our sanguine view on corporate profitability: the earnings picture isn't great, but it isn't bad either.
Our takeaway from the Q2 earnings season has been that the overall earnings picture was stable, with management teams generally providing a reassuring view of the economic ground reality. We have been flagging, however, the emergence of question marks over the earnings outlook, as the revisions trend appears to have reversed the positive and favorable move that we had been highlighting for the preceding two to three quarters.
This negative revisions trend is particularly notable regarding expectations for 2024 Q3, with earnings estimates for the period getting revised down much more than we had seen in other recent periods.
Not only is the magnitude of cuts to Q3 estimates bigger than what we saw in the comparable periods for the last three quarters, but it is also widespread and not concentrated in one or a few sectors. Of the 16 Zacks sectors, estimates have been revised down for 14 sectors, with the Transportation, Energy, Business Services, and Aerospace sectors suffering the biggest declines. The Tech and Finance sectors are the only ones whose estimates have modestly risen since the period began.
Notwithstanding the aforementioned negative revisions trend, the expectation is for an accelerating growth trend over the coming periods.
Please note that this year's +8% earnings growth improves to +9.6% on an ex-Energy basis.
Recapping the Q2 Earnings Season Scorecard
Please note that the Q2 earnings season isn't officially over yet, as we still have 6 S&P 500 members that have yet to report quarterly results as of Friday, August 30th. Five of these remaining six index members are on deck to report results this week, including Dollar Tree, Hormel Foods, Hewlett Packard Enterprises, Copart, and Broadcom.
For the 494 S&P 500 members that have reported Q2 results already through Friday, August 30th, total earnings are up +8.6% from the same period last year on +3.6% higher revenues, with 79.8% beating EPS estimates and only 60.1% able to beat revenue estimates.
As we have been pointing out, the very low Q2 revenue beats percentage has been an enduring feature of this reporting cycle. In fact, the Q2 revenue beats percentage of 60.1% was a new low for this group of index members over the preceding 20-quarter period (5 years).
The earnings focus lately has been on the Magnificent 7 member and semiconductor leader Nvidia, which came out with another beat-and-raise quarterly report on August 28th. Nvidia's Q2 earnings increased +157.4% from the same period last year on +122.4% higher revenues.
The market wasn't impressed with Nvidia's blockbuster results, as the company's guidance came up short of the whispered range. While the analyst community is broadly laudatory in their commentary on the release, the stock has lost some ground. However, the lack of market follow-through for Nvidia shares could very well be a reflection of the stock's impressive year-to-date gains rather than a comment on its outlook.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
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.
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Nvidia are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – September 3, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Nvidia (NVDA - Free Report) .
Looking Ahead to Q3 Earnings Season
Total Q3 earnings for the S&P 500 index are expected to be up +3.8% from the same period last year on +4.6% higher revenues. This would follow the +8.6% earnings growth for the index in the preceding period on +3.8% higher revenues.
Regular readers of our earnings commentary are familiar with our sanguine view on corporate profitability: the earnings picture isn't great, but it isn't bad either.
Our takeaway from the Q2 earnings season has been that the overall earnings picture was stable, with management teams generally providing a reassuring view of the economic ground reality. We have been flagging, however, the emergence of question marks over the earnings outlook, as the revisions trend appears to have reversed the positive and favorable move that we had been highlighting for the preceding two to three quarters.
This negative revisions trend is particularly notable regarding expectations for 2024 Q3, with earnings estimates for the period getting revised down much more than we had seen in other recent periods.
Not only is the magnitude of cuts to Q3 estimates bigger than what we saw in the comparable periods for the last three quarters, but it is also widespread and not concentrated in one or a few sectors. Of the 16 Zacks sectors, estimates have been revised down for 14 sectors, with the Transportation, Energy, Business Services, and Aerospace sectors suffering the biggest declines. The Tech and Finance sectors are the only ones whose estimates have modestly risen since the period began.
Notwithstanding the aforementioned negative revisions trend, the expectation is for an accelerating growth trend over the coming periods.
Please note that this year's +8% earnings growth improves to +9.6% on an ex-Energy basis.
Recapping the Q2 Earnings Season Scorecard
Please note that the Q2 earnings season isn't officially over yet, as we still have 6 S&P 500 members that have yet to report quarterly results as of Friday, August 30th. Five of these remaining six index members are on deck to report results this week, including Dollar Tree, Hormel Foods, Hewlett Packard Enterprises, Copart, and Broadcom.
For the 494 S&P 500 members that have reported Q2 results already through Friday, August 30th, total earnings are up +8.6% from the same period last year on +3.6% higher revenues, with 79.8% beating EPS estimates and only 60.1% able to beat revenue estimates.
As we have been pointing out, the very low Q2 revenue beats percentage has been an enduring feature of this reporting cycle. In fact, the Q2 revenue beats percentage of 60.1% was a new low for this group of index members over the preceding 20-quarter period (5 years).
The earnings focus lately has been on the Magnificent 7 member and semiconductor leader Nvidia, which came out with another beat-and-raise quarterly report on August 28th. Nvidia's Q2 earnings increased +157.4% from the same period last year on +122.4% higher revenues.
The market wasn't impressed with Nvidia's blockbuster results, as the company's guidance came up short of the whispered range. While the analyst community is broadly laudatory in their commentary on the release, the stock has lost some ground. However, the lack of market follow-through for Nvidia shares could very well be a reflection of the stock's impressive year-to-date gains rather than a comment on its outlook.
For a detailed look at the overall earnings picture, including expectations for the coming periods, please check out our weekly Earnings Trends report >>>>Q2 Earnings Reflect Positivity, But Q3 Estimates Decrease
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% 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/performancefor information about the performance numbers displayed in this press release.