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Apple, Amazon, Facebook, Google, Exxon are part of Zacks Earnings Preview

Zacks Equity Research
·6-min read

For Immediate Release

Chicago, IL – August 3,2020 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Apple Inc. AAPL, Amazon.com, Inc. AMZN, Facebook, Inc. FB Alphabet Inc. GOOGL and Exxon Mobil Corporation XOM.

These 3 Charts Clearly Tell the Q2 Earnings Story

Thursday’s blowout Q2 results from Apple, Amazon, Facebook and even Alphabet reconfirm the enormous earnings power of these technology players. This is particularly notable in the current uncertain macroeconomic environment that has weighed heavily on the profitability of older blue chips like Exxon and others.

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These impressive Tech sector results show that the market’s preference for these stocks has a fundamental basis. No doubt the aforementioned four Technology stocks, coupled with Microsoft, now account for 22.5% of the S&P 500 index’s total market capitalization, second only to the Technology sector and bigger than the Finance sector.

56.9% of the S&P 500 members are beating both EPS and revenue estimates.

We knew that the pandemic dealt a severe blow to corporate profitability and the results of the 313 S&P 500 companies gives us a good idea of the magnitude of that growth hit. Total earnings (or aggregate net income) for the 313 S&P 500 members are down -36.2% on -7.8% lower revenues. To round out this scorecard, 79.9% of these 313 index members have beaten consensus EPS estimates and the corresponding revenue beats percentage is 65.2%, with a blended beats percentage of 56.9%.

Please note that we have a super-busy docket of earnings releases as well, with more than 1,200 companies reporting results, including 133 S&P 500 members.

Q3 earnings for the S&P 500 index are currently expected to decline -24.3% from the same period last year. But the growth picture has been steadily improving since the start of July. We see a similar trend in place for 2020 Q4 and full-year 2020 estimates as well.

This is a notable improvement in the overall earnings picture since the start of the pandemic.

Tech Sector Scorecard

For the Tech sector, we now have Q2 results from 82.9% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Tech companies are down -1.8% on +2.5% higher revenues, with 90.2% beating EPS estimates and 80.5% beating revenue estimates.

Looking at Q2 as a whole for the Tech sector, total sector earnings are expected to be down -3.2% from the same period last year on +3.2% higher revenues. This is the lowest earnings decline rate of the 14 Zacks sectors that are expected to have year-over-year earnings declines in the quarter (Utilities is the only sector with a modest positive growth and Medical is flat from the year-earlier level).

Looking at the index as a whole, combining the actual results from the 313 index members with estimates for the still-to-come companies, total Q2 earnings are expected to decline -36.1% from the same period last year on -6.9% lower revenues.

All sectors are expected to have lower earnings relative to the year-earlier period, with 4 of the 16 sectors expected to lose money in Q2 (decline rates in excess of -100%). These four sectors are unsurprisingly Energy (Q2 earnings expected to decline -155.4%), Transportation (-146.3%), Autos (-124.8%) and Consumer Discretionary (-108.6%).

Growth is expected to resume next year, with full-year 2021 earnings for the S&P 500 index currently expected to be up +26.4% relative to 2020 estimates. But as strong as next year’s growth estimate is, total 2021 index earnings would still haven’t gotten back to pre-Covid levels.

For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report >>>> An Improving Earnings Outlook Despite Covid-19 Concerns

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Apple Inc. (AAPL) : Free Stock Analysis Report
 
Facebook, Inc. (FB) : Free Stock Analysis Report
 
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
 
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