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Q4 S&P 500® EPS growth is expected to come in at 16.4%, the highest growth rate in three years.
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Large-cap outlier earnings dates this week include: MCD, GILD, PAYC, and PANW.
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The second week of peak season begins this week, with 1,879 companies expected to report.
To call last week a whirlwind for investors is an understatement. What started out with the US imposing tariffs on a number of trade partners, causing markets to drop early Monday, ended with 30-day tariff pauses on Canada and Mexico, and a mixed bag of tech earnings.
Tech results last week were more anticipated than usual due to the emergence of Chinese AI startup DeepSeek in the prior week. After the initial scare, investors appear to have decided the development of cheap generative AI is good for companies in the space, taking Meta Platforms Inc (NASDAQ:META), (NASDAQ:Apple Inc) (NASDAQ:AAPL), (NASDAQ:Amazon.com) (NASDAQ:AMZN) stock prices higher on the news. Company executives also signaled that DeepSeek’s ability to produce cheaper generative AI tools was a win for the adoption and cost management of the technology. Microsoft (NASDAQ:MSFT) CEO Satya Nadella spoke to this on the company’s Q4 earnings call saying “DeepSeek has had some real innovations” and “Obviously now that all gets commoditized and it’s going to get broadly used.” Similarly, Meta Platform’s CEO Mark Zuckerberg said the emergence of DeepSeek validated its decision to make its AI free to use with the goal of accelerating adoption and lowering costs.
Google’s parent company, Alphabet (NASDAQ:GOOGL) is a name that is expected to benefit from AI demand, but results on Tuesday may have disappointed investors when revenues missed estimates. Youtube ad revenue, search revenue and Google Cloud revenue were softer year-over-year. GOOGL also caught investors off-guard by announcing CAPEX of $75B for the year, vs. expectations that were closer to $60B
Advanced Micro Devices (NASDAQ:AMD) also let down investors with their Q4 results. We had pointed out their later-than-usual report date which led to their negative DateBreak score for the quarter. After reporting results that surpassed top and bottom-line estimates on Tuesday, it was declining data center revenue, their bread-and-butter, which may have soured investors. The stock fell nearly 7% on the following day of trading. Heading into the season, AMD received a number of analyst downgrades, from the likes of Bank of America, HSBC and Goldman Sachs, due to revenue concerns and competition from Nvidia (NASDAQ:NVDA).
Amazon) was anticipated to be a winner this earnings season, but soft guidance led to a 4% decline in the stock in the following trading day. Revenue guidance for Q1 was lighter than expected, with a range of $151B - $155.5B suggesting mid to high-single digit growth.8 Amazon’s slowest quarter of revenue growth in recent history was the 7.2% they reported in Q2 2022, the weakest in two decades. Why the disappointing outlook? “This guidance anticipates an unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates,” Amazon indicated in their earnings release.
Palantir (NASDAQ:PLTR) was a bright spot in tech last week. The stock surged 24% to a record high after reporting better-than-expected results and guidance in Q4 due to AI demand. The company saw revenue for its U.S. commercial segment increase 64% and revenue for its U.S. government segment increase 45% YoY.
With 62% of companies from the S&P 500 now having released results for Q4, growth is at 16.4%, the highest level in 3 years.
On Deck this Week
This week marks the second peak week of earnings season with 1,879 companies (in our global universe of 11k) set to report, and 78 from the S&P 500. The hotels, restaurants & leisure sub-sector will be in focus with names like McDonald’s Corporation (NYSE:MCD), The Wendy’s Co (NASDAQ:WEN), Marriott International Inc (NASDAQ:MAR), Wynn Resorts Limited (NASDAQ:WYNN) and Hilton Worldwide Holdings Inc (NYSE:HLT) reporting their fourth-quarter results, as well as the enterprise tech space when HubSpot Inc (NYSE:HUBS), Palo Alto Networks (NASDAQ:PANW) and Twilio (NYSE:TWLO) also release quarterly results.
Source: Wall Street Horizon
Academic research shows that when a company confirms a quarterly earnings date that is later than when they have historically reported, it’s typically a sign that the company will share bad news on their upcoming call, while moving a release date earlier suggests the opposite.
This week, we get results from several large companies on major indexes that have pushed their Q4 2024 earnings dates outside of their historical norms. Twelve companies within the S&P 500 confirmed outlier earnings dates for this week, thirteen of which are later than usual and therefore have negative DateBreaks Factors*. Those names are ON Semiconductor (NASDAQ:ON), Rockwell Automation (NYSE:ROK), McDonald’s (MCD), S&P Global (SPGI), Carrier Global Corporation (NYSE:CARR), Edwards Lifesciences (NYSE:EW), Gilead Sciences (NASDAQ:GILD), Paycom Software (ETR:SOWGn) (NYSE:PAYC), Motorola Solutions (NYSE:{{276|MSMSI). The three names with positive DateBreak Factors are NiSource (NYSE:NI), Albemarle Corp. (NYSE:ALB) and Palo Alto Networks (PANW).
McDonald’s
McDonald’s is set to report their Q4 2024 results on Monday, February 10, eleven days later than expected. While they are still adhering to their Monday reporting trend started last year they have pushed their report into the 7th week of the year (WOY), after reporting in the 6th WOY last year and the 5th WOY in the decade prior. This will be the latest MCD has reported for Q4 in ten years, and only the second time they have reported in February.
Palo Alto Networks
Palo Alto Networks is set to report its FQ2 2025 results on Thursday, February 13, a week earlier than expected. They are also reporting on a Thursday versus their usual Tuesday reporting date, and have pulled their report into the 7th week of the year (WOY), after reporting in the 8th WOY for the last two years, and the 9th WOY in the prior eight years. This will be the earliest PANW has reported their FQ2 in ten years.
Q4 Earnings Wave
We are well into peak earnings season at this point, which runs from February 3 - 28 this year, with each week expected to see over 1,200 reports. Currently, February 27 is predicted to be the most active day with 877 companies anticipated to report. Thus far, 68% of companies have confirmed their earnings date (out of our universe of 11,000+ global names), and 26% have reported results.
Source: Wall Street Horizon