This week will feature a slew of quarterly reports from some of the biggest names in the market. So far, the earnings season has been good, but the market has also shown an ability to drive stocks sharply lower on any signs of weakness or lower than expected guidance numbers.
Around 80% of the companies that have already reported have posted better than expected profits, but there have been many instances where the earnings beats were overlooked by even small revenue misses. This was the case with both Amazon (AMZN) and Alphabet (GOOGL) that posted big positive earnings surprises and growth but sold off sharply on small revenue misses.
Expect more of the same as we enter the second half of the earnings season. Wall Street is worried about the future impact of a trade war and rising interest rates, and with the market hitting record highs over the last month, traders are not tolerating any signs of weakness this earnings season.
Given the recent market volatility it is imperative to stay on top of the current earnings season, and here are five big name companies that are scheduled to release their quarterly numbers later this week.
Apple’s (AAPL) quarterly reports always capture Wall Street’s attention. As is always the case, analysts will pay close attention to the number of iPhones Apple shipped last quarter as the iPhone remains the company’s primary revenue stream. Apple reports its fiscal fourth-quarter numbers after the market close Thursday with the consensus calling for earnings of $2.78 per share, up from $2.07 during the same period last year. Apple has been strong in recent years, as the company has managed slowing iPhone sales with higher average prices on its devices. Apple tends to set conservative guidance figures, and has a strong history of better than expected results. The street is expecting another earnings beat this quarter, with a whisper number of $2.90 for the quarter. Expect earnings to be strong, but strong earnings will not be enough to push the stock higher if traders see any signs of weakness in iPhone sales ahead of the upcoming holiday season. AAPL trades at $217.17 with an average price target of $237.62.
Social media leader Facebook (FB) has been under a lot of pressure over the last three months following its last quarterly report. Last quarter the company posted slightly better than expected profits while sales were short of estimates. The stock sold off sharply on the sales miss, and has yet to find a solid level of support with shares currently near their 52-week low. Facebook came under pressure earlier in the year due to its data privacy scandal, and is currently under pressure as reports indicate fewer teens are using the service. Facebook has emerged as the only real competitor to Google in terms of online advertising, and it will need to put up a solid set of numbers to bring enthusiasm back into the stock. Facebook reports third-quarter numbers after the market close Tuesday with the consensus calling for earnings of $1.46 for the quarter. The market expects a small earnings beat with a whisper number of $1.49 for the quarter. FB trades at $145.31 with an average price target of $204.97.
Detroit automaker General Motors (GM) got a big boost ahead of its third-quarter report from reports that China was considering reducing its auto sales tax from 10% to 5%. As China remains the world’s largest auto market, the possibility of a tax cut in the nation drove GM and all major auto stocks higher. The jump in GM shares comes after a steady downward trend that started back in June, and Wall Street will need to see a strong set of quarterly numbers for GM shares to maintain their current momentum. Analysts forecast earnings of $1.26 for the quarter, while the street expects profits to disappoint with a whisper number of $1.19. The possible earnings miss has already been priced into the stock, so GM stock could stage a strong rally if the company is able to hit its estimate or miss by less than the whisper number suggests. GM is trading at $33.52 with an average price target of $47.45.
Oil prices have been strong in 2018, helping oil and gas giant Exxon Mobil (XOM) hit a new 52-week high as recently as early October. However, oil prices have eased over the last several weeks which has hurt oil and gas stocks which are trading lower due to falling oil prices as well as sympathy to weakness in the overall market. Brent crude has fallen the last couple of weeks but remains strong at $77.59 a barrel. Crude prices remain high enough to keep a bullish view on oil and gas stocks, and if Exxon is able to post strong quarterly numbers the stock should quickly erase most of its recent losses. Exxon reports third-quarter numbers before the market open November 2, with analysts forecasting earnings of $1.21 for the quarter, up from $0.93 during the same period last year. The street expects a small earnings beat with a whisper number of $1.25. XOM trades at $77.84 with an average price target of $92.64.
Restaurant chain operator Yum! Brands (YUM) will report its third-quarter numbers before the market open October 31. The consensus calls for earnings of $0.83 per share, but the street has a higher whisper number of $0.87 for the quarter. YUM has sold off in October with the overall market, but ahead of the market correction YUM was showing strength and trading at its 52-week high during the first half of the month. The selling has been in sympathy to the overall market, so a strong quarterly report will put the stock in a great position to make back its recent gains as the market starts to find its footing. YUM trades at $86.56 with an average price target of $90.73.