Only about one-fifth of the S&P 500 have so far reported second-quarter results, but at least five major talking points have emerged — some quite surprising — since earnings season started more than a week ago.
So far, so good Through Friday morning, 75.5% of the companies reporting have been beating consensus analyst projections for earnings per share, by an average of about 4.7%, according to I/B/E/S data provided by Refinitiv. That compares with 66% of companies beating EPS estimates in a typical quarter since 1994, and an average beat margin of 9.5% for the prior four quarters.
Meanwhile, despite worries that recession fears would lead to a raft of full-year guidance cuts, that just hasn’t been the case. In fact the ratio of negative EPS preannouncements to positive preannouncements has so far been 1.7, according to I/B/E/S data, well below the long-term average of 2.6, and only slightly above the average over the prior four quarters of 1.5.
Yes, dollar strength is a headwind That said, there was a worry heading into earnings season that is being fulfilled: The sharp rise in the U.S. dollar will reduce the value of profits and revenue generated from overseas operations.Here’s why a rising dollar can hurt results of multinational companies: The U.S. dollar-Japanese yen exchange rate increased to 135.75 on June 30 from 122.50 on April 1, meaning 10,000 yen in earnings was worth just $73.66 on June 30, down from $81.63 on April 1.
Snap confirms a grim outlook for big internet companies Fears that ad-supported internet stocks were facing a perfect storm of issues that would show up in second-quarter earnings were realized this week, when Snapchat parent Snap Inc. SNAP, -39.08% posted what one analyst called “terrible” numbers, as others rushed to downgrade the stock.
“We will await a stabilization in revenue growth before considering getting more constructive,” he added. Lee cited upbeat comments from Volvo AB VOLV.B, -0.12%, which said semi chip access was improving and production at best levels all year, and railroad operator CSX CSX, -0.32% which said there are “clear signs” from car makers that chip challenges are easing.
Those locations include some economically depressed ones: Bellevue, Ohio, Fort Wayne, Indiana, Binghamton, New York, Harrisburg, Pennsylvania, Cincinnati, Ohio, Louisville, Kentucky, Conway, Pennsylvania, Peru, Indiana, Decatur, Illinois, Princeton, Indiana, Elkhart, Indiana and Roanoke, Virginia. Twitter may be right. Elon is hurting its business When Twitter Inc.’s lawyers asked a Delaware judge Tuesday for a speedy trial that would settle its merger spat with Elon Musk, they argued that the saga’s overhang was causing constant harm to the company.