More than 100 S&P 500 companies are down to report September quarter earnings this week and none will dominate more by two very different groups – troubled airline maker Boeing and online giant, Amazon.
So far 73 companies in the S&P 500 having reported. Of those, 83.6% have come in above average estimates, according to figures from financial data group Refinitiv.
The AMP’s Chief Economist, Shane Oliver says “expectations (are) for a roughly -2.4% year on year decline in earnings per share led by energy, materials and tech stocks with revenue growth of roughly 1.6%yoy. Assuming normal beats this suggests earnings growth will come in around +1%yoy.”
Reuters says US analysts currently see S&P 500 earnings dropping by 3.1% compared with last year, which would mark the first contraction since the earnings recession that ended mid-2016.
Boeing is out on Wednesday and with more claims about the problematic 737 Mx jetliner and what the company knew back in 2016 about its troubled plane, the airline is certain to report another big loss and mover closer to making a decision whether to halt production of the jet.
The allegations are from text messages between a former test pilot and another pilot which discussed the plane and its controversial stability system which is said to be at the centre of the Indonesian Lion jet crash in late 2018 and the crash of an Ethiopian Airlines jet earlier this year. Hundreds of people died in both crashes.
Reuters reported the texts before the FAA regulators knew about them, which has made Boeing’s problems much harder.
The 737 Max is not going to fly this year – some airlines have put off returning the plane to their schedules until next February, while others will not commit and are taking losses (which Boeing will make up through lower per plane costs or cash compensation.
Boeing last week took the chairman’s role away from Dennis Muilenburg to allow him more time to concentrate on resolving the 737 Mx debacle.
In contrast, Amazon is expected to have a problem-free report on Thursday and the big question will be the size of its margins, the number of new customers and the way the company’s rapidly group cloud computing business, AWS is performing.
It remains the key to Amazon’s growth story, along with its growth in ad sales (where it now rivals Facebook and Google).
As well reports are expected from Procter & Gamble Co United Parcel Service Inc, Caterpillar Inc, Microsoft Corp , Ford Motor Co, 3M Co, Twitter Inc, Mattel, Hasbro. General Dynamics, Lockheed, Colgate Palmolive, Intel, Texas Instruments, PayPal, Goodyear, Verizon, McClatchy, Halliburton, Tesla, AMD, Comcast, Mondelez and Under Armour.
