Nov 1, 2019

Earnings have been weak, but better than expected

Dion Rabouin

Reproduced from FactSet; Chart: Axios Visuals

The Q3 earnings season has been a generally mixed bag.

The other side: S&P 500 earnings are still on track to decline for the third consecutive quarter, with overall profits expected to fall about 2.7% from a year earlier, the sharpest decline since 2016, according to FactSet.

  • The U.S.-China trade war is again rearing its head as companies that make 50% or more of their revenue overseas are showing especially weak totals.
  • Companies also blamed the stronger U.S. dollar and slower global economic growth, FactSet noted.

What they're saying: “Earnings … are truly better than expected,” Peter Vanderlee, a portfolio manager at ClearBridge Investments, told WSJ.

  • “As a result, there hasn’t been a moment where you would say, ‘Look, it is upon us. A recession is nearing.’”

Go deeper

Courtenay Brown

A Teflon earnings season

Illustration: Sarah Grillo/Axios

With Q3 earnings season nearly over, investors are applauding, even cheering companies that fall short of expectations or signal next quarter won't be as rosy as previously thought.

Why it matters: Investors' renewed optimism that's pushed stock prices to all-time highs is giving businesses more leeway than in the past.

Go deeperArrowNov 19, 2019
Dion Rabouin

Investors more bullish on good earnings and less bearish on bad

Photo: Robert Nickelsberg/Getty Images

U.S. stock market investors are showing their bullish bias this earnings season, buying big on companies that beat expectations and going easy on selling companies that miss.

What's happening: "Shares of companies that topped forecasts rose an average of 2% in the two days after reporting results, beating the five-year average of 1%, according to data compiled by FactSet. Those that fell short have averaged a 2.1% pullback, below the half-decade average of 2.6%," WSJ's Michael Wursthorn reports.

Go deeperArrowNov 4, 2019
Dion Rabouin

UBS issues a warning on earnings

Photo: Fabrice Coffrini/AFP via Getty Images

Investors have cheered largely better-than-expected company earnings in the third quarter, but those beats are masking an ugly truth, UBS investment bank equity strategists wrote in a note to clients Tuesday.

The big picture: "There is NO debate on S&P 500 forward earnings: a contraction appears imminent."

Go deeperArrowNov 6, 2019