Your guide to a busy week of earnings, including Alphabet and Tesla
Wall Street will get its first glimpse of Big Tech earnings this week. Google-parent Alphabet and Tesla are among the more than 100 S & P 500 companies slated to report. Results from Ford Motor, IBM and General Motors are also on deck. The reporting period is off to a solid start. About 14% of S & P 500 companies have posted second-quarter numbers through Friday’s close. Of those names, 81% have beaten expectations, according to FactSet. At 9.66%, overall S & P 500 earnings growth is also on track to be the highest since the fourth quarter of 2021. Take a look at CNBC Pro’s breakdown of what’s expected from this week’s key reports. All times are Eastern. Tuesday General Motors is set to report earnings before the bell. Management is slated to hold a call at 8:30 a.m. Last quarter: GM raised its 2024 guidance and posted a big Q1 earnings beat . This quarter: Analysts expect earnings grew by more than 40% year over year, per LSEG. What CNBC autos reporter Michael Wayland is watching: “Investors have high expectations for General Motors to not only report strong earnings for the second quarter, but at the very least guide toward the top end of its 2024 financial targets, if not raise them for a second consecutive quarter. New vehicle sales and prices have remained more resilient than GM had anticipated to begin the year, creating a favorable environment for the company during the first half. Other than the results, investors will be eager to hear any updates regarding the company’s rollout of new electric vehicles, gas-powered trucks and crossovers as well as any comments regarding GM’s Cruise autonomous vehicle unit and China, where GM has struggled as of late.” What history shows: Data from Bespoke Investment Group shows GM beats earnings expectations 87% of the time. The automaker has also posted an earnings beat for seven straight quarters. Tesla is set to report earnings after the close. Leadership will then hold a conference call at 5:30 p.m. Last quarter: TSLA shares jumped after CEO Elon Musk said the company aims to start producing an affordable EV by early 2025. This quarter: Analysts polled by LSEG expect Tesla to report a 30% year-over-year earnings decline. What to watch: Some analysts are concerned about Tesla heading into Tuesday’s report, including Dan Levy at Barclays, who has an equal weight rating on the stock. In a note Wednesday, he warned that the report “may reaffirm continued pressure on margins, even if they are near a trough.” He added that, “while 2024 expectations have largely rightsized, we still see the need for cuts to estimates in the mid-term on weaker volumes, leaving considerable uncertainty around when fundamentals stand to become favorable again.” Baird’s Ben Kallo is more upbeat ahead of the report. “We like the setup and think there is a high probability of an EPS beat. We think a more stable pricing environment during the quarter, higher revenue from full self-driving, and the large beat in its Energy Segment all support a solid quarter.” What history shows: Bespoke data shows GM beats earnings expectations 62% of the time. However, the stock has fallen after four of the last five earnings days. Alphabet is set to report earnings after the bell, followed by a call at 4:30 p.m. Last quarter: GOOGL shares popped after the company announced its first-ever dividend . This quarter: The tech giant is expected to post earnings growth of nearly 30% from the year-earlier period, according to LSEG. What to watch: Key for Alphabet investors will be updates on the company’s digital ad sales as well as improvements on the artificial intelligence front. Deutsche Bank analyst Benjamin Black also said he likes the stock’s setup heading into the report. “All in, given the robust ad market, AI-driven tailwinds, as well as indications of management’s growing cost discipline, we maintain our Buy rating,” he said in a note Thursday. What history shows: Google averages a more than 1% gain on earnings days, per Bespoke. The tech giant has also topped bottom-line estimates for five straight quarters. Wednesday Ford Motor is set to report earnings after the bell. A call with management is slated for 5 p.m. Last quarter: F earnings beat estimates as the company’s commercial unit offset EV losses . This quarter: Earnings are expected to have fallen slightly for the automaker, LSEG data shows. What CNBC autos reporter Michael Wayland is watching: “Ford Motor is expected to report a relatively solid second quarter, however, not as strong as its crosstown rival GM. Ford remains in the midst of a restructuring under Ford CEO Jim Farley called ‘Ford+.’ The plan initially focused heavily on all-electric vehicles but also includes rolling out new products more efficiently and cost-cuts to make the company’s vehicles more profitable. Wall Street expects the automaker’s ‘Ford Pro’ commercial business as well as sales of its highly profitable traditional pickup trucks to offset losses in its ‘Model e’ EV business.” What history shows: Ford earnings exceed estimates nearly 70% of the time, according to Bespoke. However, shares average a 0.45% decline on earnings days. IBM is set to report earnings in the postmarket, followed by a call at 5 p.m. Last quarter: IBM reported another revenue miss and announced it would acquire HashiCorp for $6.4 billion . This quarter: Analysts see flat year-over-year earnings and revenue, per LSEG. What to watch: IBM shares have outperformed the S & P 500 tech sector in the past month, rising 7% while the space is down 3% in that time. Can this momentum continue? RBC analyst Matthew Swanson thinks so. He wrote Thursday: “We expect solid results when the company reports Q2/24 on 7/24, with continued infrastructure outperformance and improving software results despite a challenging comp.” Swanson has an outperform rating on shares. What history shows: IBM profits top expectations 84% of the time, Bespoke data shows. Thursday American Airlines is set to report earnings in the premarket, with a call slated for 8:30 a.m. Last quarter: AAL posted a loss but issued better-than-expected guidance. This quarter: Earnings for the airline are expected to have fallen more than 10% from the year-earlier period, per LSEG. What CNBC airlines reporter Leslie Josephs is watching: “American Airlines investors will want to look for clear steps the company is taking to correct a direct-to-consumer sales strategy that backfired earlier this year. The carrier in May cut its profit and revenue forecast and said its chief commercial officer was leaving the company. Investors in the airline will be looking for clues about travel demand and further cuts to capacity as added flights this year have pushed down airfare. American also has had one of the most contentious labor negotiations with its flight attendants and executives are likely to be questioned about progress.” What history shows: American Airlines top earnings estimates 88% of the time. However, shares tend to be flat on earnings days.
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