Second-quarter results are flowing in thick and fast with market sentiment swayed by beats and misses. Over 60% of the total S&P 500 index members have released their second-quarter results through Jul 29. Following the disappointing trend set in other recent quarters, growth continues to remain elusive. The second quarter is expected to be the fifth in a row to suffer an earnings decline for the benchmark index. Having said that, the pace of decline is seen to be moderating from prior periods.
The overall trend has been more or less spelled out for all sectors, except Retail and Utilities, as the two still have a lot many releases to cover. This is turning out to be yet another hectic week with 116 S&P500 companies queued up to report their numbers.
Per the latest Earnings Preview report, 317 S&P 500 companies have reported their second-quarter earnings so far with 72.9% topping bottom-line estimates and 53.6% coming in ahead of top-line expectations. The overall report suggests that earnings results have moved south 3.3%, on a 0.9% decrease in revenues from the same period last year.
The poor earnings picture is majorly attributable to the inherent weakness of the Energy sector. Eight out of 16 Zacks sectors are expected to see growth in negative territory in Q2, with Energy, Basic Materials, Aerospace and Transportation suffering double-digit declines. However, Autos, Construction, Conglomerates, Utilities, Medical, Retail, Consumer Discretionary and Business Services - eight in all - are projected to land up on the brighter side, booking growth this season.
The Business Services sector is looking reasonably good. For the sector, earnings are expected to grow 5.7%, while sales are touted to rise 6.6% over last year. The projected improvement is largely due to a recovery in oil prices in the second quarter and the faded effects of the dollar strength.
Among advertising stocks, which are a part of the broader Business Services sector, slated to report this week, let's have a sneak peek at three major industry players to see how things are gearing up for the upcoming quarterly results.
Clear Channel Outdoor Holdings Inc.CCO is scheduled to report second-quarter results before the markets open on Aug 4. The company is an outdoor advertising firm which owns and operates advertising display faces globally.
As per our model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for it to beat estimates. For the quarter to be reported, this Zacks Rank #3 stock has an Earnings ESP of 0.00%, thus making an earnings prediction uncertain. Over the trailing four quarters, the company delivered an average negative surprise of 8.33%.
CLEAR CHANL OUT Price and EPS Surprise
CLEAR CHANL OUT Price and EPS Surprise | CLEAR CHANL OUT Quote
Harte-Hanks Inc.HHS is scheduled to report second-quarter results before the markets open on Aug 4. The company provides marketing services and shopper advertising opportunities to local, regional, national and international consumer and business-to-business marketers. For the quarter to be reported, this Zacks Rank #5 (Strong Sell) stock has an Earnings ESP of 0.00%, thus making an earnings prediction difficult. As it is, we caution against stocks with a bearish Zacks Rank #4 (Sell) or #5 going into the announcement. Over the trailing four quarters, the company has beaten estimates twice, with still an average negative surprise of 109.96%.
HARTE-HANKS INC Price and EPS Surprise
HARTE-HANKS INC Price and EPS Surprise | HARTE-HANKS INC Quote
Marin Software IncorporatedMRIN is scheduled to report second-quarter results before the markets open on Aug 4. The company offers online advertising management services. For the quarter to be reported, this Zacks Rank #3 stock has an Earnings ESP of 0.00%, thus making an earnings prediction uncertain. Over the trailing four quarters, the company has beaten estimates on three occasions, with an average positive surprise of 27.83%.
MARIN SOFTWARE Price and EPS Surprise
MARIN SOFTWARE Price and EPS Surprise | MARIN SOFTWARE Quote
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free reportCLEAR CHANL OUT (CCO): Free Stock Analysis ReportHARTE-HANKS INC (HHS): Free Stock Analysis ReportMARIN SOFTWARE (MRIN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment Research