Snap, Inc. (NYSE:SNAP) was among the high-profile disappointment thus far in the second-quarter reporting season. The stock shed close to 40% Friday and is down about 80% for the year-to-date period.
Is Snap’s dismal earnings a one-off event, or is it foreshadowing things to come?
Earnings Season Thus Far: Of the 21% S&P 500 companies that have reported up to the week ending July 22, 68% have reported positive earnings per share, or EPS, surprise, FactSet said in its weekly “Earnings Insight” report. This is below the five-year average of 77%. Utilities and healthcare were the sectors with the highest percentage of earnings beats, and real estate and energy have the lowest percentage of earnings upside.
Companies reporting earnings beats have exceeded consensus by 3.6% on average, below the five-year average of 8.8%.
Sector-wise, healthcare reported the biggest degree of upside relative to the consensus, led by Biogen, Inc. (NASDAQ:BIIB), Abbott Labs. (NYSE:ABT), Danaher Corporation (NYSE:DHR).
A more modest 65% of the companies have beaten revenue estimates, four percentage points below the five-year average.
Read Benzinga’s story on the end-2022 S&P 500 forecast
How Heavyweights Fared In Q2:
The following companies beat both earnings and revenue expectations:
- Johnson & Johnson (NYSE:JNJ)
- Biogen
- Goldman Sachs, Inc. (NYSE:GS)
- Bank of America, Inc. (NYSE:BAC)
- American Express Company (NYSE:AXP)
- AT&T, Inc. (NYSE:T)
- International Business Machines, Inc. (NYSE:IBM)
- Netflix, Inc. (NASDAQ:NFLX)
The following companies reported mixed results:
- Novartis AG (NYSE:NVS) (earnings beat but a revenue miss)
- Verizon Communications, Inc. (NYSE:VZ) (earnings miss but revenue beat)
- Tesla, Inc. (NASDAQ:TSLA) (earnings beat but a revenue miss)
- Snap: (earnings beat but a revenue miss)
- The following companies reported disappointing results:
- Twitter, Inc. (NYSE:TWTR)
FactSet made some interesting observations:
Companies with more international exposure have thus far reported higher earnings growth than those having relatively less international exposure.
To date, the market has been more rewarding to positive earnings surprises and has less punishing to negative earnings surprises as compared to previous averages.
The SPDR S&P 500 Pacer Swan SOS Fund of Funds ETF|ETF Trust (NYSE:SPY) closed the week 2.6% higher at $395.09, according to Benzinga Pro data.