The first major week of earnings fall will begin with a contradictory study.
The aerospace and technology sectors featured prominently on the income calendar, providing glimpses of industries with very different fates during the first year of the pandemic. While many tech companies have benefited from an increasing reliance on digital tools, airlines continue to suffer from declining travel demand.
and Intel Corp.
is one of the first tech companies posted by the results and they will show how momentum has been maintained as the economy begins to recover.
Netflix an additional 36.6 million subscribers globally in 2020But analysts are concerned about future subscriber growth as people begin to do more activities outside of their homes. Likewise, Intel capitalized on soaring PC sales, an industry trend that continued in the first quarter, but some worry that the demand for new computers may have been pulled forward.
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Airlines sit on the other side of the equation for recovery. Reviewed from Delta Air Lines Inc.
Having a net loss of more than $ 1 billion in the first quarter, investors know that airline earnings won’t be doing well for the time being, but the industry is relying on pent up travel demand as more people were vaccinated and many countries lifted travel restrictions.
The first major earnings report came amid strong optimism about profit returns and perhaps the largest quarterly increase in corporate earnings in more than a decade. Analysts surveyed by the FactSet project that earnings for the S&P 500
was up 30.1% in the first quarter, almost double the expected growth rate of 15% that analysts had come to expect for the end of December.
The new combined growth estimates, taking into account reported results as well as estimates for companies that have not yet released results, have increased significantly since the beginning of the week, as analysts predict earnings growth of 24.6% for the index. The problem to help is that bank income has exceeded expectations: Analysts now expect a 118% increase in profits for the financial sector when it all comes to fruition, up from a 79.5 increase. % is expected earlier this week.
There are only 43 members of the S&P 500
have reported results so far, but 76 more results will be increased next week, including the 10 Dow Jones industrial average.
the components. Here are some notable points.
The technology wave begins
International trading machines Corp.
Opening earnings season with a Monday afternoon report that will show whether reopening the economy will help boost spending on information technology.
Netflix followed on Tuesday afternoon, with questions not only about the company’s ability to maintain subscriber momentum as the world reopens, but also about its potential to grab more revenue from customers. present. The company recently raised prices in the US and Canada and is also testing a possible program Prevent password sharing.
Intel’s real earnings on Thursday will likely be overshadowed by larger themes, especially as the company pointed to its third-quarter results and full-year outlook for the month before new chief executive Pat. Their Gelsinger devises a strategic route involved expand production capacity and plan to start a foundry business. Investors may be looking for more information on how ambitious strategy will impact Intel’s finances.
Big week for the Dow
One-third of the Dow Jones Industrial Average is set for reporting next week, including Johnson & Johnson.
is gaining attention amid a federal “pause” on the company’s single-dose COVID-19 vaccine. The pause “has no significant impact on income or reduced risk on the tutorial” wrote an SVB analyst Leerink. But the company may face questions Tuesday morning about how the vaccine could be used in the future.
The company is also addressing production issues after a batch of COVID-19 vaccine was produced by a partner. not up to quality standards.
The rest of the Dow includes IBM and Coca-Cola Co.
(Monday), Procter & Gamble Co.
and Travelers Cos. Inc.
(Tuesday), Verizon Communications Inc.
(Wednesday), Dow Inc.
and Intel (Thursday), and Honeywell International Inc.
and American Express Co.
United Airlines Holdings Inc.
expected on Thursday.
Investors have some idea of what will happen following last week’s Delta report, showing that domestic travel business is improving while international business is still stalled. in the context of limited government.
Cowen & Co. analyst Helane Becker “We believe the stock’s response will be less on beating estimates and more on summer demand expectations, recovery time / span and the ability to capture demand without compromising,” said. interest rate “.
Verizon and AT&T Inc.
is set to publish earnings for the first time since the Federal Communications Commission announced the results of the C-band wireless spectrum auction, which shows both companies spend a lot to get spectrum will be used to build their 5G networks.
Cowen & Co. analyst Colby Synesael There may be “potential capex increases in 2021 as carriers accelerate the construction / deployment of network equipment for C-Band spectra,” said Cowen & Co. analyst Colby Synesael. wrote the company’s Wednesday morning report. He hopes the company will reiterate the rest of its original outlook in 2021, as it did during Investor Day in March.
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AT&T has many ongoing reports, and Synesael says the company’s Thursday morning earnings call could focus a “massive focus” on the company’s broadband initiatives “as Investors look for color increase in the pace of construction of yarn last year ”by AT&T Optimistic view on the future of yarn as stated in its own investor day showcase.