Breaking Down the Q4 Scorecard and the Evolving Earnings Outlook

Zacks2023-02-09

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, ...

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You can access the full report that contains detailed historical actual and estimates for the current and following periods, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/breaking-down-q4-scorecard-evolving-230311003.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Breaking Down the Q4 Scorecard and the Evolving Earnings Outlook</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBreaking Down the Q4 Scorecard and the Evolving Earnings Outlook\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-02-09 07:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/breaking-down-q4-scorecard-evolving-230311003.html><strong>Zacks</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, ...</p>\n\n<a href=\"https://finance.yahoo.com/news/breaking-down-q4-scorecard-evolving-230311003.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"INTC","symbol_name":"英特尔","start_time":0,"source_url":"https://finance.yahoo.com/news/breaking-down-q4-scorecard-evolving-230311003.html","article_id":"2310578748","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/H_HNSfeEpt0iNEHfSCOTCA--~B/aD00MTM7dz02MjA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/zacks.com/7193b8f70970f3aff67998ec50d79711"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2310578748","pubTimestamp":1675897391,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full r","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"INTC":"英特尔","AMD":"美国超微公司"},"translate_title":"分解第四季度记分卡和不断变化的收益前景","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMD":0.9,"INTC":0.9},"content_text":"Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>\nHere are the key points:\n\nFor the 300 S&P 500 companies that have reported Q4 results, total earnings are down -6.7% from the same period last year on +5.7% higher revenues, with 71.0% beating EPS estimates and 69.0% beating revenue estimates.\n\n\nLooking at 2022 Q4 as a whole, aggregate S&P 500 earnings are currently expected to be down -5.8% on +5.3% higher revenues. Excluding the Energy sector’s strong contribution, Q4 earnings for the rest of the index are expected to be down -9.8% on +4.3% higher revenues.\n\n\nFor 2023 Q1, S&P 500 earnings are currently expected to be down -7.5% on +2.1% higher revenues. This is down from -4% on January 6th and -2.9% in mid-December 2022.\n\n\nEstimates for 2023 Q2 have risen over the last few weeks as a result of positive revisions to Energy sector estimates offsetting estimate cuts elsewhere.\n\n\nLooking at the calendar-year picture, total S&P 500 earnings are on track to be up +4.1% in 2022 and expected to come in flat (0.0%) in 2023. On an ex-Energy basis, total 2022 index earnings would be down -2.6% (instead of +4.1%, with Energy) while 2023 earnings would be up +1.0% (instead of flat 0.0%).\n\nThe Q4 earnings season continues to show that while growth is moderating and decelerating, it isn’t falling off the cliff that many appeared to fear could be in store for us.\nWe earlier cited the example of Microsoft (MSFT) where cyclical forces appeared to be starting to weigh on the growth trajectory of its cloud business. A number of other cloud players have since confirmed those emerging spending trends from business customers.\nThis is a logical extension of the cumulative effects of Fed’s extraordinary monetary policy since March 2022 that many in the market hope is getting close to the finish line.\nBusinesses and households are starting to rein in their spending plans and a number of high-profile companies have announced major layoffs. The labor market still remains strong, helping support households’ purchasing power. But the overall operating landscape has become difficult for all companies. This puts a premium on management’s abilities to execute in a tough environment.\nBeyond the Fed’s role in the macroeconomic slowdown is the post-Covid adjustment in a number of important slices of the economy. One such example of ongoing adjustments is in the semiconductor space where companies struggled to meet surging demand over the last two years and are now faced with over-supplied markets that aren’t expected to start easing till at least through the back half of the year.\nIntel (INTC) is faced with a host of company-specific issues, but the unfavorable supply-demand fundamentals of the chip space isn’t helping its broader turnaround efforts. The market gave a thumbs down to the Intel release but appreciated Advanced Micro Devices’ (AMD) effort, though both are faced with the same market fundamentals, broadly speaking.\nThe bigger point here isn’t to pick on Intel or give undue credit to AMD, but rather to point out the macro forces weighing on growth. It is the post-Covid adjustment for Intel, AMD and a host of other companies in different industries on top of cyclical forces resulting from tighter financial conditions.\nAs noted in this space before, GDP growth estimates for the current and coming quarters have been steadily coming down, with full-year 2023 GDP growth now barely in positive territory.\nWe have been pointing out for a while now how estimates for this year have been steadily coming down for months now, in anticipation of this macroeconomic development.\nThe chart below shows how earnings growth expectations for the current period (2023 Q1) have evolved over the last two months.\nImage Source: Zacks Investment Research\nThe chart below shows the evolution of aggregate earnings estimates for 2023 since the start of 2022.\n\nImage Source: Zacks Investment Research\nAs noted earlier, the current aggregate earnings total for the index approximates to an index ‘EPS’ of $216.37, a hair above last week’s $216.07, but down from $242.98 in mid-April, 2022.\nThe chart below tracks these index ‘EPS’ values since the start of 2022. Please note that these ‘EPS’ values are imputed approximations and have been previously published on the dates listed in the chart below.\nImage Source: Zacks Investment Research\nThe Overall Earnings Picture\nThe chart below provides a big-picture view of earnings on a quarterly basis. The growth rate for Q4 is on a blended basis, where the actual reports that have come out are combined with estimates for the still-to-come companies.\n\nImage Source: Zacks Investment Research\nThe chart below shows the overall earnings picture on an annual basis.\nImage Source: Zacks Investment Research\nAs you can see above, earnings this year are now expected to be flat (0.0%). This can hardly be called out-of-sync with a flat or even modestly down economic growth outlook. Don’t forget that headline GDP growth numbers are in real or inflation-adjusted terms while S&P 500 earnings discussed here are not.\nAs mentioned earlier, 2023 aggregate earnings estimates on an ex-Energy basis are already down by almost -14% since mid-April 2022. Perhaps we see a bit more downward adjustments to estimates over the coming weeks, after more companies report Q4 results and provide guidance along the lines of what we saw with Microsoft. But we have nevertheless already covered some ground in taking estimates to a fair or appropriate level.\nThis is particularly so if whatever economic downturn lies ahead proves to be more of the garden variety rather than the last two such events. Recency bias forces us to use the last two economic downturns, which were also among the nastiest in recent history, as our reference points. But we need to be cautious against that natural tendency as the economy’s foundations at present remain unusually strong. \nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nIntel Corporation (INTC) : Free Stock Analysis Report\nAdvanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report\nMicrosoft Corporation (MSFT) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2310578748"}