The earnings season kicks off in earnest this week, with some of the biggest U.S. banks slated to report. More than 40 S & P 500 names are on deck to post second-quarter results, including Goldman Sachs, Morgan Stanley and Bank of America. Netflix will also release its latest figures. Expectations for this reporting period are high. FactSet data shows analysts expect S & P 500 earnings rose 8.8% in the second quarter from the year-earlier period. If that’s the case, it would mark the strongest earnings growth going back to the first quarter of 2022 — when profits rose by 9.4%. Take a look at CNBC Pro’s breakdown of what’s expected from this week’s key reports. All times are Eastern. Monday Goldman Sachs is set to report earnings before the bell. Management is slated to hold a call at 9:30 a.m. Last quarter: GS topped first-quarter estimates thanks to strong revenue from trading and investment banking. This quarter: Analysts polled by LSEG expect earnings per share to have more than doubled from the year-earlier period. What CNBC banking reporter Hugh Son is watching: “Goldman Sachs is reporting Monday, and because of an anticipated rebound in Wall Street activity, including merger fees, expectations are high for CEO David Solomon. Keep an eye out for any writedowns tied to commercial real estate.” What history shows: Goldman has beaten earnings expectations in the last three quarters, according to Bespoke Investment Group. Tuesday Morgan Stanley is set to report earnings in the premarket, followed by a conference call at 9:30 a.m. Last quarter: MS beat estimates on strength from wealth management, trading and investment banking. This quarter: Morgan Stanley is expected to report earnings per share growth of more than 30%, per LSEG. What CNBC banking reporter Hugh Son is watching: “Morgan Stanley has two tailwinds in its favor: a rebound in investment banking fees, and high stock values that inflate assets in its wealth management division, giving new CEO Ted Pick a boost.” What history shows: The bank’s stock has risen on four of the last six earnings days, Bespoke data shows. Bank of America is set to report earnings before the opening bell. Leadership is set to hold a call at 8:30 a.m. Last quarter: Interest income and investment banking revenue drove an earnings beat for BAC . This quarter: Earnings per share are expected to have fallen nearly 10% year on year, LSEG data shows. What CNBC banking reporter Hugh Son is watching: “At Bank of America, investors are mostly concerned about how net interest income will fare in a time of high rates; the company has managed to maintain guidance despite concern about rising funding costs; let’s see if that trend continues.” What history shows: Bank of America averages a 0.8% decline on earnings days, according to Bespoke. That said, the company’s profits exceed estimates 79% of the time. Wednesday United Airlines is set to report earnings after the closing bell. A call is expected the following day at 10:30 a.m. Last quarter: UAL surged on a strong earnings forecast and cut its 2024 fleet plan . This quarter: The airline’s earnings are forecast to have fallen 20%, according to LSEG. What CNBC airlines reporter Leslie Josephs is watching: “United and Delta have been pulling away from the pack, pulling in better profit margins. Can they continue? Travel demand broke new records this year but higher costs have been weighing on the sector. United is one of the best positioned airlines to capitalize on strong international travel demand. Investors will be looking for clues about bookings outside of the July summer travel peak and the rest of the year. Executives will also likely be asked about expansion plans as well as ongoing aircraft delivery delays from Boeing and Airbus that have hindered capacity. Capacity constraints aren’t necessarily a bad thing; as the industry adds flights it can pressure fares, but new planes are more fuel efficient and can cut airlines’ costs. United is yet to seal a new labor agreement with its flight attendants and the carrier will face questions about any added costs from that deal.” What history shows: Bespoke data shows United beats earnings expectations 71% of the time. However, shares average a 0.54% decline on earnings days. Thursday Netflix is set to report earnings after the bell, with a conference call slated for 4:45 p.m. ET. Last quarter: NFLX blew past earnings estimates thanks to a 16% jump in subscribers. This quarter: The streaming giant is expected to report earnings per share growth of more than 40%, per LSEG. What CNBC is watching: Some analysts are wary ahead of Netflix’s earnings report. Goldman’s Eric Sheridan, who has a neutral rating on the stock, noted last week: “Based on Sensor Tower data, both in the US and globally, Netflix experienced a decline in app downloads during the quarter,” which could indicate some softness for the company. Citi’s Jason Bazinet, who has a neutral rating on shares, said Thursday: “We expect NFLX to report net additions modestly ahead of sell side estimates but modestly below investor expectations. Investor focus will likely remain on the firm’s ad-tier, sports content strategy and capital allocation.” What history shows: Per Bespoke, Netflix beats earnings per share estimates 81% of the time. However, the stock has fallen in three of the last five earnings days.
Earnings playbook: Your guide to the first full week of the reporting season, including Netflix and Goldman
Jul 14, 2024
