Apple ($AAPL)īoth Apple (up 3% on their print) & Qualcomm beat both rev/EPS for the June quarter but Apple followed the 5% estimate cut for the September quarter by Qualcomm the prior day (down 5% on their print.) The Qualcomm cut was due to worse than expected Android smartphone demand. Certainly, June quarter results were “better than feared” for some and both Apple & Amazon beat both rev & EPS published estimates for the June quarter but even for them, their stock reactions had a lot to do with prior companies lowering the bar such as Qualcomm (for Apple) and Walmart (for Amazon). This includes Apple, Microsoft, Facebook, Google and Amazon. Also the percent by which companies are exceeding published revenues for the quarter reported is the lowest since Q2 of 2020.ĮPS expectations for ALL mega cap tech companies went down for the September quarter after June results were reported. But this earnings season, the beats are below average at 60%/73%. Over the past 5 years, S&P500 companies on average have beaten rev/EPS for the reported quarter 69%/77% of the time. Fed tightening just started this year and will show up with a lag in future earnings over the next year.Ĭompanies try to guide to a low bar for the next quarter when they report so they can beat it so we look at results compared to prior averages. We think EPS expectations for CY2023 will drop by ~20% over the course of this next year to $200 from ~$250. Guidance (actual and implied) that was all lower for the September quarter by the megacap tech stocks but that could have been worse.įor the first time in over two years, earnings season revisions for the S&P500 for next twelve months EPS has fallen into negative territory.Lowered expectations after the S&P/Nasdaq declined 8/9% in June with negative pre-announcements by Target, Microsoft, SnapChat, Intel (soft lower by CFO at conference).36 bps drop in 10-year treasury yields helping tech valuations with 16 bps drop following the Fed decision.Drop in commodity prices (WTI down 7%) helping the peak inflation narrative.The S&P rose 5% in the last 3 trading days of the week driven by a 3% gain on Wednesday, the day of the Fed decision. Expectations by investors that the Fed would be CUTTING rates in Q1 of 2023.The big S&P/Nasdaq rally of 9%/12% in July was due to
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