The flood of Q2 earnings announcements continues this week, with almost one thousand companies reporting results, including 165 S&P 500 members. By the end of this week, we will have seen Q2 results from 70% of the index's total membership. But with results from more than half of the index's total market capitalization already out, we have a pretty good sense of how weak this earnings season has actually been.
The fact that growth is so challenged isn't much of a surprise given what we saw on the estimate revisions front ahead of the start of this earnings season. But it is disappointing to see so few companies beat revenue estimates despite the low expectations. We must acknowledge that revenue beat ratios have picked up a bit lately after remaining at extremely low levels earlier on. The list of headwinds isn't new – the strong u.s. dollar and global growth issues, particularly the weak outlook for China, have been persistent themes in earnings reports lately.
We will discuss the picture emerging from the already-released Q2 results a little later. But let's focus for now on the super-busy reporting week coming up. The key earnings reports this week include
Monday (7/27) –Norfolk Southern (NSC) and Roper Industries (ROP – Analyst Report) are the key reports today.
Tuesday (7/28) – Pfizer (PFE – Analyst Report), Merck (MRK – Analyst Report), UPS (UPS –Analyst Report) and DuPont (DD – Analyst Report) are some of the key reports on a very busy day with more than 40 S&P 500 members reporting results.
Earnings ESP, our proprietary leading indicator of earnings surprises, is showing UPS coming out with an earnings beat. Our research shows that stocks with Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) coupled with positive Earnings ESP are highly likely to beat EPS estimates. UPS currently has Zacks Rank #3 (Hold) and Earnings ESP of +0.8%.
Wednesday (7/29) – The notable companies among the 50 S&P 500 members reporting today include Facebook (FB – Analyst Report) and Whole Foods (WFM – Analyst Report) after the close and MasterCard (MA – Analyst Report) and International Paper (IP – Analyst Report) before the market's open.
Earnings ESP is showing Facebook beating EPS estimates. The stock has Zacks Rank #3 (Hold) and Earnings ESP of +6.5%.
Thursday (7/30) – On another very busy reporting day with more than 50 S&P 500 members reporting results, Proctor & Gamble (PG – Analyst Report) and ConocoPhillips (COP) are the notable companies in the morning while Expedia (EXPE –Analyst Report) and Amgen (AMGN) will report after the close.
ConocoPhillips with Zacks Ranks of 3 and Earnings ESP of +20% is expected to beat EPS estimates.
Friday (7/31) – Exxon (XOM – Analyst Report) and Chevron (CVX) are the key companies reporting results today, both in the morning.
