U.S. March quarter earnings reports hit peak week with dozens of S&P 500 companies reporting under the leadership of a handful of giants who will determine the quality of the earnings reporting season – Tesla, Apple, Amazon, Microsoft, Facebook, Alphabet (Google), Exxon, BP, Shell and Chevron.
As of Friday, just over 25% of S&P 500 companies had reported – as expected, Netflix was last week’s biggest and its lack of subscribers rattled sentiment.
This week there is another test for technicians and the season as a whole.
So far, around 76% of S&P 500 reportable companies have exceeded earnings and revenue expectations.
Profit news so far has been positive with 86% of companies reporting higher profits.
Business profits are expected to rise about 33.9% for the first quarter, based on actual estimates and reports, according to Refinitiv. The first forecasts place the increase at around 21%. Revenues are up just under 10%.
According to AMP chief economist Shane Oliver, the final increase could be between 35% and 40%.
Oil sector reports will go a long way in pushing up revenues and profits this quarter and next time a year ago, Covid and lockdowns saw demand and prices plummet – especially in the three month before June.
By comparison, the rebound in oil, gas and gasoline prices will see the oil majors reveal surges in revenue and profits for the March quarter of this year and some will undoubtedly resume buybacks.
Watch for comments on the pace of the recovery, taxes, Covid, inflation and rising costs, and China.
The big tech giants will be joined by Boeing, Starbucks, Honeywell, Raytheon, Ford, Caterpillar, Comcast and McDonald’s, who will give a good spread of comments and figures from manufacturing companies, media and consumers.
Looking at this week’s top reports, Tesla dominates today. Tuesday will see 3M, Mondelez, Alphabet, Starbucks, Microsoft, Raytheon, Visa, Texas Instruments, UPS, AMD, Eli Lilly, BP and Hasbro.
Wednesday sees reports from Apple, Boeing, Rockwell, Ford, Yum Brands, eBay, Moody’s, Discovery, Facebook, Qualcomm, Teck Resources, Hess and Nielsen.
Thursday sees reports from Amazon, Bristol Myers, Merck and Co, McDonald’s, US Steel, Hershey, Comcast, Kraft Heinz, Caterpillar, Mastercard, Twitter, Newmont, S&P Global and Shell.
Friday sees reports from Exxon Mobil, Chevron, Phillips 66 and Colgate Palmolive.
And on May 1, Berkshire Hathaway Saturday, at the same time as the annual meeting which will be virtual again because of COVIF and Los Angeles instead of Omaha.
This year, the question period will be extended. Vice President Charlie Munger missed last year’s meeting, but will be back this year with the meeting coming from Los Angeles, rather than Omaha.
Continuing on last year’s theme, Greg Abel, who was in attendance last year, and Ajit Jain, who was not, will also answer questions about their domains. Abel mainly focuses on energy and other non-insurance related operations.
Jain focuses on insurance. Considering Buffett and Munger’s advanced age, this makes Berkshire investors more comfortable with Berkshire estate planning.