After the holiday quarter last year snapped an earnings recession, the same is not expected this year — but it isn’t impossible, and may happen three months late.
One key question for FactSet analyst John Butters is whether earnings could ultimately end up in positive territory for the quarter, even as estimates call for an aggregate 6.8% drop. Based solely on the historical five-year trend, it wouldn’t seem likely, but companies posted much stronger beats over the past two quarters, meaning an end to the earnings recession could be a possibility. The few fourth-quarter reports that have come in so far have exceeded earnings expectations by about 26.
West Texas Intermediate CL00, -0.38%, the benchmark for U.S. crude oil, saw an average price of $40 a barrel during the quarter, 29% lower than a year prior, the analysts noted: “Getting almost 30% less for one’s product certainly hurts, and with about two out of every three barrels of oil equivalent consisting of liquids , that price decline was a major contributor.”
Earnings season kicks off in earnest in the week ahead, with 40 members of the S&P 500 set to report along with six Dow Jones Industrial Average DJIA, -0.57% components. Highlights include Netflix Inc. NFLX, -0.58%, United Airlines Holdings Inc. UAL, -5.18%, and Intel Corp. INTC, -2.82%Bank on it Look for a steady stream of bank earnings, led by Bank of America Corp. BAC, -2.88% and Goldman Sachs Group Inc. GS, -2.23% on Tuesday morning, with Morgan Stanley MS, -1.61% follows a day later.
good