The big banks had an easier run this earnings season, with a combination of fewer litigation charges, tighter cost controls and modest improvement in core businesses giving earnings a boost despite constrained revenues as a result of the tough interest rate backdrop. But the going is a lot tougher outside of the Finance sector.
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 fewer companies beat revenue estimates despite the low expectations. We must acknowledge however that revenue beat ratios have picked up a bit lately after remaining at extremely low levels earlier.
The list of headwinds isn't new – the strong u.s. dollar and global growth issues have been persistent themes in earnings reports lately. Even the mighty Google's (GOOGL – Analyst Report) report showed plenty of currency issues in an otherwise strong showing, with investors cheering the search giant's uncharacteristic cost discipline.
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, with almost 500 companies coming out with quarterly results, including 124 S&P 500 members.
This week's reporting docket represents a blend of bellwethers from different sectors, ranging from ‘growthy' names like Apple (AAPL) and Amazon (AMZN) to smokestacks like Dow Chemicals (DOW – Analyst Report) and plenty of others in the middle. By the end of this week, we will have seen Q2 results from 37% of the S&P 500 members, with the trends established already getting fully confirmed by then.
The key earnings reports this week include:
