This Week’s Make-or-Break Earnings Season

This week is crucial for second quarter earnings season, with approximately 160 S & P 500 companies expected to report their latest quarterly results. It is the busiest week of the reporting period, and so far, 81% of the 250 companies that have already reported have exceeded analyst expectations, according to FactSet. Some notable earnings beats include Netflix, which posted better-than-expected profit due to increased subscriptions and cracking down on password sharing. However, there have been some disappointments, such as Goldman Sachs, which reported weaker-than-expected earnings.

Merck and Apple’s Earnings Expectations

On Tuesday, Merck is set to report earnings before the bell. Analysts expect the company to post a loss for the first quarter, as it faces pressure to reduce its dependence on its blockbuster antibody cancer treatment, Keytruda. Investors will be looking for updates on experimental drugs and the company’s M & A plans. Merck beats earnings expectations 75% of the time, but the stock tends to remain flat on earnings day.

Starbucks will report earnings after the bell on Tuesday. Analysts anticipate double-digit earnings growth compared to the previous year. The upcoming report could indicate a turnaround for Starbucks, as daily subway rides have returned to pre-Covid levels, suggesting increased foot traffic. Starbucks beats earnings expectations 54% of the time, with the stock averaging a gain of 0.5% after results.

Pfizer and Amazon’s Earnings Outlook

Pfizer will report earnings before the open on Wednesday. The pharmaceutical giant is expected to experience a steep year-over-year earnings drop as demand for Covid products declines. The conference call will provide updates on near-term drug launches and Pfizer’s recovery plans. Pfizer exceeds earnings expectations 87% of the time, but the stock typically falls slightly on earnings day.

Amazon, reporting after the bell on Thursday, will face scrutiny over the performance of its cloud unit. Investors will be interested in whether Amazon Web Services can regain its rapid growth. Other topics of focus include AI plans, retail margins, and progress on delivery services. Amazon’s earnings exceed expectations 62% of the time, and the stock tends to rise after results are released.

Apple’s Strong Earnings Momentum

Apple will report earnings after the close on Thursday. Despite an expected small decline in earnings compared to the previous year, Apple shares have seen a significant increase this year. Analysts predict that Apple will exceed estimates due to strong iPhone sales. Apple beats earnings expectations 89% of the time, and the stock typically gains on earnings day.

This week’s earnings reports are critical for investors and will provide insights into the performance of major companies across various industries.