Revealing a detailed snapshot of your finances probably sounds a bit intimidating, right? And what if you had to do it several times a year?
That’s precisely the premise behind earnings season. And soon, we’ll be in the thick of the Q1 2023 cycle.
Q4 2022 earnings season turned out to be better than expected, with a feared earnings “apocalypse” failing to materialize. Many companies, such as Meta Platforms META, Netflix NFLX, and Uber Technologies UBER positively surprised in their own respective ways, helping lift sentiment.
Now, with the Q1 2023 cycle kicking off, we have some notable quarterly reports rolling in this week, including those from JPMorgan JPM, United Health UNH, and Delta Air Lines DAL. Below is a chart illustrating the performance of all three year-to-date, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at what’s expected from this group of three.
JPMorgan
JPMorgan, a global leader in financial services, offers solutions to the world's most important corporations, governments, and institutions.
Analysts have primarily lowered their earnings expectations for the quarter-to-be reported over the last 60 days, with the $3.40 consensus EPS Estimate reflecting year-over-year growth of 30%.
Image Source: Zacks Investment Research
And since the start of 2023, the quarterly EPS estimate is down marginally (-0.3%), as seen in the chart below.
Image Source: Zacks Investment Research
Regarding the top line, JPM is expected to bring in $35.4 billion in revenue, implying growth of roughly 15% from year-ago sales of $30.7 billion. Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
JPMorgan has posted better-than-expected results consistently as of late, exceeding both earnings and revenue expectations in back-to-back quarters. Will this time be different?
UnitedHealth Group
UnitedHealth provides a wide range of healthcare products and services, including health maintenance organizations (HMOs), point of service plans (POS), and preferred provider organizations (PPOs). A singular analyst has revised their quarterly EPS estimate higher over the last 60 days.
Image Source: Zacks Investment Research
As we can see in the chart below, the current $6.25 per share estimate is actually up 2.6% since the start of 2023, indicating optimism from analysts.
Image Source: Zacks Investment Research
The company’s top line estimate has also seen positive revisions since the beginning of 2023, up nearly 1% to $89.4 billion and implying year-over-year growth of 11%.
Image Source: Zacks Investment Research
Delta Air Lines
Delta Air Lines is one of the four carriers that control the majority of the United States aviation market, with its carriers accounting for more than 60% of the domestic market share.
Analysts have primarily pulled back their expectations for the quarter in the near term, with three negative revisions hitting the tape over the last 60 days.
The Zacks Consensus EPS Estimate of $0.31 indicates a sizable 125% year-over-year jump in earnings, reflecting a continued recovery in travel demand.
Image Source: Zacks Investment Research
The negative revisions become more pronounced when viewing a more extended timeframe; Delta’s quarterly EPS estimate is down roughly 9% since January.
Image Source: Zacks Investment Research
Delta posted earnings of $1.48 per share in its latest release, nearly 15% above our consensus estimate and snapping a streak of negative surprises. Further, quarterly revenue totaled $13.4 billion, 3% above expectations and well above year-ago sales of $9.4 billion.
In the chart below, we can see that DAL’s top line has recovered following the pandemic, with quarterly revenues now eclipsing pre-pandemic levels.
Image Source: Zacks Investment Research
Bottom Line
Earnings season is always an exciting time to be a market participant, with companies finally pulling the curtain back and revealing what’s transpired behind the scenes.
This week, we’ll have several notable reports to sort through to kick the cycle off, including those from JPMorgan JPM, United Health UNH, and Delta Air Lines DAL.
Q4 2022 earnings season turned out to be better than feared, helping inject positive sentiment into the market. But what about this time?
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