Overall, about a third of the S&P 500 and almost half of the Dow Jones Industrial Average are expected to release their quarterly updates during the week beginning Monday, according to FactSet.
Facebook parent Meta Platforms Inc., FB -2.11% Google owner Alphabet Inc. GOOG -4.26% and Twitter Inc. are expected to make gains next week. Industry conglomerates like General Electric Co. and 3M Co. are also expected to provide quarterly updates; Grocery heavyweights Mondelez International Inc. and McDonald’s Corp. MCD -1.99%; and other big names in manufacturing and pharmaceuticals.
The Apple Store at Singapore Airport. Analysts expect the iPhone maker to report slightly lower earnings.
Photo: Lauryn Ishak/Bloomberg News
Supply chain issues related to Covid-19 remain a concern and the Russian invasion of Ukraine is posing new obstacles for businesses. Investors want to see how companies are addressing these issues and how they are maneuvering in a macroeconomic environment of high inflation.
“Inflation is higher than we thought,” Scott Kirby, chief executive officer of United Airlines Holdings Inc., said Thursday. “We built high inflation over a year ago and thought we were conservative, but I think everyone was surprised at how high inflation was.”
Tech companies, which benefited during the pandemic as restrictions and public health concerns kept many Americans homebound, now face an evolving landscape as consumer spending shifts to personal goods and services.
Netflix Inc. has already called for caution by reporting that it has lost subscribers for the first time in more than 10 years and expects those losses to accelerate in the current quarter.
While other companies are reporting earnings for the recently concluded quarter, many are expected to point to the severe public health restrictions in Shanghai and elsewhere in China that have disrupted supply chains, said Brian Belski, chief investment strategist at BMO Capital Markets.
“Tech companies currently have a free pass because the sector is bottomed,” Mr Belski said, adding that CEOs will use supply chain issues related to China to lower expectations. “It doesn’t mean the revenue is going to suck. It just means this is their opportunity to really lower the bar and promise and exceed.”
So far, about 20% of S&P 500 companies have reported earnings for the recently ended quarter, according to FactSet. Earnings are on track to rise 6.6% year over year for the quarter based on actual results and estimates for companies that have yet to report, FactSet said. That would be the lowest earnings growth rate FactSet’s index has reported since the fourth quarter of 2020. Revenue for the most recent period is expected to increase 11.1% year over year, FactSet said.
Microsoft, which reports its third-quarter results on Tuesday afternoon, is expected to report a nearly 18% increase in revenue on the back of continued cloud growth, according to FactSet. Investors will also likely be looking for more insight into the company’s $75 billion deal to buy video game maker Activision Blizzard Inc., which is due to report its quarterly earnings on Monday.
Apple, which reports its second-quarter earnings on Thursday afternoon, is expected to report a slight decline in profit to $23.33 billion from the same period last year’s pandemic-related results, according to FactSet. Analysts are expecting Amazon, which is also scheduled to report on Thursday, to show its quarterly profit fell nearly 46% to $4.39 billion after the outbreak of a pandemic, FactSet estimates.
Meta, which reports first-quarter results on Wednesday, is expected to report a decline in quarterly profit to $7.17 billion as the company continues to invest in its Metaverse initiatives, according to FactSet. Analysts will hear more about the company’s Metaverse vision and reasons to reverse the stock’s 45 percent year-to-date decline.
Analysts expect Alphabet’s earnings to also fall slightly amid difficult year-over-year comparisons. Google’s parent company reports its earnings for the first quarter on Tuesday.
Twitter, the social media company currently reviewing a takeover bid from Tesla Inc. chief executive Elon Musk, is expected to announce first-quarter results on Thursday.
In addition to the technology, other large companies will also publish their results in the coming week. The Las Vegas Sands Corp. is expected to report on Wednesday afternoon and is likely to provide an insight into the state of travel demand. McDonald’s will follow before the bell on Thursday, with hints at the strength of consumers in general.
3M, a major maker of N95 masks, will release its results on Tuesday, as will GE, followed by Caterpillar Inc. on Friday morning.
Other notable figures to report include Coca-Cola Co. on Monday; Visa Inc. on Tuesday; Boeing Co. on Wednesday; MasterCard Inc. on Thursday; and Colgate-Palmolive Co. on Friday.
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