Netflix, Tesla, PG, Coca Cola and Intel are part of Zacks Earnings Preview

For Immediate Release

Chicago, IL – October 19, 2020 – releases the list of companies likely to issue earnings surprises. This week’s list includes Netflix NFLXTesla TSLAProcter & Gamble PGCoca Cola KO and Intel INTC.

Early Q3 Results Show Earnings Recovery in Place

We are off to a good start in Q3 earnings season, with the banks and brokers coming out with a notably improved profitability picture relative to what they were able to show in the first half of the year.

The market appears unwilling to credit these players for their good Q3 showing, but positive results from the perennially out-of-favor banks nevertheless reconfirms the earnings recovery theme that we have been consistently highlighting over the last three months.

The best evidence of this recovery has been the steady improvement in the revisions trend since early July, which helped push estimates for Q3 and beyond higher. We are starting to see the same trend in play for Q4 estimates.

We will be looking for this improving revisions trend to gain pace in this next week as we enter the heart of the Q3 earnings season, with more than 300 companies on deck to come out with quarterly results, including 86 S&P 500 members. With results from 49 index members already out, we will have seen Q3 results from 27% of the index’s total membership by the end of this week.

This week’s reporting docket expands beyond the Finance sector that has dominated the results thus far, with bellwethers from Netflix and Tesla to Procter & Gamble, Coca Cola, Intel and a host of others in between. Results from this representative cross-section of the economy will give us a good sense of the earnings landscape.

Q3 Earnings Season Scorecard (as of Friday, October 16th)

We now have Q3 results from 49 S&P 500 members or 9.8% of the index’s total membership. Please note that these 49 index members account for 12.6% of the index’s total market capitalization. Total earnings (or aggregate net income) for these 49 companies are down 17.8% from the same period last year on 2.4% lower revenues, with 85.7% beating EPS estimates and 77.6% beating revenue estimates.

The two sets of comparison charts below put the Q3 results from these 49 index members in a historical context, which should give us a sense how the Q3 earnings season is tracking at this stage relative to other recent periods.

Not only is the pace of declines decelerating, but also a much bigger proportion of companies are beating EPS and revenue estimates.

For the Finance sector, we now have Q3 results from 35.8% of the sector’s total market capitalization in the S&P 500 index. Total earnings for these Finance companies are down 8.2% from the same period last year on 0.8% higher revenues, with 87.5% beating EPS estimates and 77.6% beating revenue estimates.

Q3 Expectations as a Whole

Looking at Q3 as a whole, combining the actual results that have come out with estimates for the still-to-come companies, total earnings for the quarter are now expected to be down 18.9% from the same period last year on 2.4% lower revenues. The decline rate has started coming down as companies have come out with better-than-expected results.

The annual growth picture approximates to an index ‘EPS’ of $128.11 for 2020, down from $159.95 in 2019 and $159.29 in 2021.

For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report: >>>> Good Start to Q3 Earnings Season

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Intel Corporation (INTC): Free Stock Analysis Report
CocaCola Company The (KO): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
Procter Gamble Company The (PG): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
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