From Nasdaq.: 2024-07-29 05:12:00

Zacks.com reveals companies likely to issue earnings surprises, including Tesla, Alphabet, Apple, Meta, and Microsoft. Market reacts to disappointing earnings from Alphabet and Tesla. Alphabet beats estimates but faces concerns about capital expenditure. Tech sector expected to see +16.8% higher earnings compared to last year, with +9.5% higher revenues. Q2 earnings season ramps up, with 41.4% of S&P 500 members reporting. Total earnings up +0.6%, revenues up +4.9%, with 79.7% beating EPS estimates but only 57.5% beating revenue estimates. Total S&P 500 earnings expected to be up +6.9% from last year, with +5.2% higher revenues. Annual S&P 500 earnings expected to be up +8.7% with +1.7% revenue growth. For more information, check out Zacks’ Earnings Trends report.

For Immediate Release:

Chicago, IL – July 29, 2024 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Tesla TSLA, Alphabet GOOGL, Apple AAPL, Meta META and Microsoft MSFT. Market participants showed their disappointment with last Tuesday’s results from two of ‘The Magnificent 7’ stocks: Google parent Alphabet and Tesla. The worrisome aspect of the market reaction to these two reports, particularly to the Alphabet release, is that this could be a precursor of what to expect this week from four other members of the group – Microsoft on Tuesday, July 30th, after the market’s close (AMC), Meta Platforms on Wednesday AMC, July 31st and Apple on Thursday AMC, August 1st.

It is hard to say anything positive about the Tesla report, but the Alphabet report had a lot of positives. Unlike Tesla, which missed consensus estimates on the back to continued margin pressures, Alphabet beat estimates and had a number of other positives in its results, including search and cloud. Investors focused on the bigger-than-expected capital expenditure figure, sparking worries about rising AI-centric capex. Concerns about underinvestment and lack of return timeline added to these worries. Other key concerns for Meta and Microsoft reports include capex and decelerating growth trends. Apple faces questions on iPhone trends in China. Alphabet saw earnings up +28.6% on +15% higher revenues, while Tesla’s Q2 earnings decreased -45.3% on +2.3% higher revenues. The group is expected to bring in +26.8% more earnings relative to the same period last year on +13.7% higher revenues.

Total Q2 earnings for the Technology sector are expected to be up +16.8% from last year, on +9.5% higher revenues. The Mag 7 stocks have been leading the rising estimates trend. Q2 revenue beats percentage is a new low, with only 57.5% beating revenue estimates of 207 index members over a 20-quarter period. Total S&P 500 earnings are expected to be up +6.9% from last year, with total 2024 S&P 500 earnings expected to be up +8.7% on +1.7% revenue growth. Excluding Finance, aggregate earnings growth for the year is only expected to decline to +8.4% on an ex-Finance basis.

The Q2 reporting cycle ramps up this week, with over 1000 companies reporting. Earnings reports include McDonald’s, Procter & Gamble, Pfizer, Starbucks, Mastercard, Boeing, DuPont, Exxon, Chevron, and more. Total S&P 500 earnings are expected to be up +6.9% from last year on +5.2% higher revenues. Zacks’ Earnings Trends report provides a detailed look at earnings expectations for upcoming periods. Check out the report for insights on the current earnings landscape.



Read more at Nasdaq.: Tesla, Alphabet, Apple, Meta and Microsoft are part of Zacks Earnings Preview