- The S&P 500’s Q2 2023 EPS growth is anticipated to be -5.2%, which would be the lowest pace in almost 3 years and the third consecutive quarter of declining earnings growth.
- This week’s potential surprises The United Parcel Service Inc.
- The peak week of the Q2 earnings season is this week, when over 3,000 corporations are anticipated to report.
Late last week, an imploding market was salvaged by an Amazon (NASDAQ:AMZN) report that was stronger than predicted. The S&P 500 recovered on Friday following three days of declines due to the tech giant’s strong earnings report. The Q2 data from Booking Holdings (NASDAQ:BKNG), which demonstrated that US consumer demand for travel is still high, also astounded investors on Thursday after the bell. Even though Nonfarm Payrolls were weak, average hourly salaries increased, rising 0.4% for the month and 4.4% year over year, well beyond analyst expectations. The week before, the S&P 500’s total blended EPS growth rate was -7.3%; this week, it was -5.2%. The growth rate would still be the lowest since Q3 2020, but it would be an enormous improvement over the previous two weeks.
This week, several prominent index-listed significant businesses with Q2 2023 earnings dates that deviate from historical averages release their reports. Four S&P 500 businesses have announced outlier earnings dates for this week. Because these dates are all later than usual, they all have negative DateBreaks Factors*. These four companies are Insulet Corporation (NASDAQ:PODD), Coterra Energy (NYSE:CTRA), Celanese Corporation (NYSE:CE), and United Parcel Service Inc. (NYSE:UPS). The later-than-usual results dates imply these corporations will reveal “bad news” on their future calls, according to academic studies. According to academic studies, when a company releases its earnings later than it has in the past, it usually portends negative news for the conference call. We also interpret date adjustments as an indication of ambiguity; the corporation is looking for clarity on a particular issue and hence needs additional time before releasing information with the public. UPS most likely shifted their earnings date back as a potential worker strike became closer. However, a preliminary agreement between UPS and the Teamsters Union was struck on July 25 and it included pay increases for both full-time and part-time employees. Nothing is finalized as of yet, despite the fact that a prospective strike that would have crippled parcel shipping and caused chaos on the US economy was temporarily avoided. On Thursday, August 3, UPS employees started casting ballots for their proposed contract. When UPS reports on Thursday, investors will be hoping for updates.
In the third and last week of peak earnings season, 2,977 companies (out of our universe of around 10k) are expected to report. We’ll receive a scattering of reports from a variety of sectors, including media (DIS), industrials (UPS, LYFT), and internet/software names (TWLO, DDOG, PLTR, BMBL, DUOL). When Ralph Lauren (NYSE:RL) and Dillards Inc. (NYSE:DDS) report, we also get a sneak peak into the retail and apparel sectors. The busiest day will be Thursday, August 10, when 932 businesses are expected to report, marking the final peak week of the Q2 earnings season. Out of our universe of more than 9,500 worldwide names, 81% of companies have so far confirmed their earnings dates, and 48% have reported.
Please note that this article does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.