US Banks Face Earnings Hurdle
America’s second quarter reporting season steps up pace this week.
Just on 70 S&P 500 companies are due to report their second quarter earnings and investors will get more of an idea of how key sectors like banking, pharma, tech and new media.
Bank of America, Morgan Stanley, US Bancorp and Goldman Sachs are expected to pick up the baton for banks in the coming week as second-quarter earnings pick up pace.
JPMorgan, Citigroup and Wells Fargo’s reports on Friday on the whole were OK without being brilliant. Weak trading income was again a feature.
Other companies reporting this week include Netflix, Johnson & Johnson, CSX, Qualcomm, Microsoft, GE, Danaher Corp, Honeywell CSX, Union Pacific, Blackrock, Amex, IBM, eBay, Nucor, Visa, Abbott Labs, Lockheed Martin, Colgate Palmolive and Schlumbrger.
In Europe, Electrolux, ABB, Vodafone and Unilever are down to report their latest quarterly figures. Unilever might more reveal more details of its restructuring plans.
FactSet said that as of close of business on Friday, 6% of the companies in the S&P 500 have reported actual results for the second quarter.
“In terms of earnings, more companies (80%) are reporting actual EPS above estimates compared to the five-year average,” FactSet said.
“In aggregate, companies are reporting earnings that are 8.2% above the estimates, which is also above the five-year average.
"In terms of sales, more companies (83%) are reporting actual sales above estimates compared to the five-year average. In aggregate, companies are reporting sales that are 1.7% above estimates, which is also above the five-year average,” according to FactSet.
"The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the second quarter is 6.8% today, which is higher than the earnings growth rate of 6.4% last week.
“Upside earnings surprises reported by companies in the Financials sector were mainly responsible for the increase in the earnings growth rate for the index during the past week,” FactSet said.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.