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With 12% of S&P 500® companies reporting for the Q1 reporting season, EPS growth currently stands at 10.1%
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Eight companies reporting this week have advanced their earnings dates: Xylem, Regency Centers Corp, Regeneron Pharmaceuticals, Booking Holdings, Vulcan Materials, Mettler Toledo International, Targa Resources and AES Corp
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Q1 peak earnings season begins this week with 3,000 companies expected to report
Peak earnings season kicks off this week, with 7,600 companies, or 70% of our equity universe, expected to report over the next three weeks.
All eyes will be on big tech, specifically the Magnificent 7, for signs that growth in the sector has not stalled out despite economic uncertainty that has led to whipsawing stock prices. Last week we heard from a few names in the space, including Tesla (NASDAQ:TSLA), Alphabet (NASDAQ:GOOGL,) and Intel (NASDAQ:INTC).
Tesla’s share price has fallen this year, with some observers attributing this to the ongoing boycotts of the electric vehicle maker, as backlash against CEO Elon Musk and his role in the US government through the DOGE program has mounted.
As such, Musk vowed on the company’s earnings call on Tuesday that he would take a step back from his government work and focus more on his role as CEO. He also admitted that the company has struggled due to higher tariffs imposed by the Trump administration. Earnings declined 40% YoY, with revenues down 9%.
On Thursday, after the close, Alphabet and Intel reported for Q1 with dramatically different results. Alphabet surpassed Wall Street analyst estimates on the top and bottom line. Strength in the first quarter was due to robust results in their search and advertising units, as hefty investments into the development of their AI tools appeared to pay off.
When asked how a changing macro environment might impact future results, the company suggested it’s too soon to know. Philipp Schindler, SVP and CBO at Google, commented “With regard to Q2, we’re only a few weeks in, so it’s really too early to comment.
I mean, we’re obviously not immune to the macro environment, but we wouldn’t want to speculate about potential impacts beyond noting that the changes to the de minimis exemption will obviously cause a slight headwind to our ads business in 2025, primarily from APAC-based retailers.”
The latter likely referring to huge Chinese retail advertisers, Temu and Shein, who may be impacted by the Trump administration’s proposal for a 145% tariff on Chinese goods, and therefore hold off on ad spending.
Intel on the other hand, while also beating analyst estimates on the top and bottom-line, issued weak forward-looking guidance. Revenue expectations of $11.8B for Q2 is below the average sell-side analyst’s estimate of $12.82B, with EPS expectations coming in flat, vs. the analyst consensus for $0.06.
We also heard more about the cost-cutting plans previously hinted at by new CEO Lip-Bu Tan, which includes workforce reductions set to begin this quarter. In a memo to employees last Thursday, which was also published on Intel’s website, Tan said “There is no way around the fact that these changes will reduce the size of our workforce.” On Tuesday, a story by Bloomberg News suggested the cuts could affect 20% of Intel employees.
With 36% of the S&P 500 having reported for Q1 at this point, the blended EPS growth rate stands at 10.1%, above the 7.1% reading from last week. One metric that has been a little light this season is the number of companies beating EPS expectations. Only 73% of companies have surpassed analyst estimates, well below the 5-year average of 77% and the 10-year average of 75%.
On Deck this Week
Peak earnings season kicks off this week with 180 S&P 500 names slated to release results. We’ll hear more from the Magnificent 7 when Microsoft (NASDAQ:MSFT) and Meta (NASDAQ:META) report Wednesday, and Amazon (NASDAQ:AMZN) and Apple Inc (NASDAQ:AAPL) report Thursday. The last of the Mag 7, Nvidia (NASDAQ:NVDA), doesn’t report until May 28.
Source: Wall Street Horizon
Outlier Earnings Dates This Week
Academic research shows that when a company confirms a quarterly earnings date that is later than when they have historically reported, it’s typically a sign that the company will share negative news on their upcoming call, while moving a release date earlier suggests the opposite.
This week we get results from a number of large companies on major indexes that have pushed their Q1 2025 earnings dates outside of their historical norms. Eleven companies within the S&P 500 confirmed outlier earnings dates for this week, eight of which are earlier than usual and therefore have positive DateBreaks Factors*.
Those names are Xylem (NYSE:XYL), Regency Centers Corp (NASDAQ:REG), Regeneron Pharmaceuticals (NASDAQ:REGN), Booking Holdings (NASDAQ:BKNG), Vulcan Materials (NYSE:VMC), Mettler-Toledo International (NYSE:MTD) (MTD), Targa Resources (NYSE:TRGP) and AES Corp (NYSE:AES).
Companies with negative DateBreaks Factors for this week include PPG Industries (NYSE:PPG (WA:IBSP)), Juniper Networks (NYSE:JNPR) and IDEX Corp (NYSE:IEX).
*Wall Street Horizon DateBreaks Factor: statistical measurement of how an earnings date (confirmed or revised) compares to the reporting company’s 5-year trend for the same quarter. Negative means the earnings date is confirmed to be later than historical average while Positive is earlier.
Q1 Earnings Wave
Peak earnings season begins this week and continues until May 16, with each week expected to see over 2,000 reports. Currently, May 8 is predicted to be the most active day with 1,156 companies anticipated to report. Thus far, only 70% of companies have confirmed their earnings date (out of our universe of 11,000+ global names), so this is subject to change. The remaining dates are estimated based on historical reporting data.
Source: Wall Street Horizon