When businesses are getting closer to releasing their quarterly results, Wall Street analysts usually reduce their financial expectations. Naturally, this lowers the bar that businesses must meet, and most businesses frequently meet it.
However, a month into the second quarter of this year, they’re acting a little strangely. Their cautious optimism regarding the profitability of corporate America is growing.
According to a FactSet report on Friday, analysts who track S&P 500 companies raised their Q2 per-share profit estimates through last month, albeit only by 0.7%. Since the fourth quarter of 2021, Wall Street has not raised its per-share profit estimates during the first month of a quarter before.
There’s still a good chance those estimates will decline. According to the report, the S&P 500 Index SPX experienced some slight declines in April. On Friday, the index did, however, close higher as investors’ expectations for a potential Federal Reserve interest rate cut were heightened by the April jobs report.
This week’s revenue
Although FactSet reports that the first-quarter earnings season is four-fifths over, 56 S&P 500 companies are still expected to report this week.
As it attempts to go it alone without merging with JetBlue Airways Corp. JBLU, +0.52%, Spirit Airlines Inc. SAVE, +0.82% reports. Tempur Sealy International Inc. TPX, -0.08% reports, attempting to make up for the decline in demand for mattresses. Results will be released by Crocs Inc. CROX, -1.91% as long as there is a high demand for its shoes. In the face of increasing competition and a slowdown in sales of electric vehicles, Nikola Corp. NKLA, +7.35%, and Rivian Automotive Inc. RIVN, +2.44%, are also expected to release their results.
This week’s noteworthy results also come from Tyson Foods Inc. (TSN, +1.76%), Palantir Technologies Inc. (PLTR, +3.46%), Airbnb Inc. (ABNB, +0.87%), Beyond Meat Inc. (BYND, +13.52%), and Electronic Arts Inc. (EA, +0.82%).
The appointments you should make
More story turns in the media? With the drama surrounding a possible merger continuing and much of the entertainment industry cutting costs, being cautious with new programming, and looking for ways to monetize streaming, Paramount Global PARA, -7.00% fired its CEO last week. Two more titans of the industry are expected to report this week: Warner Bros. Discovery Inc. WBD, +0.25%, and Walt Disney Co. DIS, +0.92%, both of which report on Tuesday and Thursday, respectively.
Disney reports following the media giant’s and its stockholders’ successful attempt to remove activist investor Nelson Peltz from the board. Investors will now probably be keeping an eye out for further information regarding Disney’s plans to invest billions in its theme parks, as well as its initiatives to curb password sharing and introduce advertisements to streaming services. In light of the more uncertain environment, BofA analysts stated last month that they weren’t anticipating any “significant surprises” for WBD. However, they claimed that this year’s growth might be aided by the Olympics and the return of series like “House of the Dragon.”
The figures to pay attention to
Profit and remuneration in the gig economy: As restaurant menu prices continue to rise, consumers are eating out less frequently. Even now, groceries are pricey. A few cities are attempting to increase delivery drivers’ wages. More details on all of those trends and how much more room consumers have to spend on ride-shares may be found in the results from Instacart CART, +3.06%, and Uber Technologies Inc. UBER, +0.96%, both released on Wednesday. Lyft Inc. LYFT, +2.14%, Uber’s smaller competitor, reports on Tuesday.
