Earnings Season Q2/2024

What to expect during the Q2 Earning Season in 2024 

Earnings season is a busy time for traders, who use the flow of information about companies' performance and future guidance to shape their strategies and portfolios. As a result, earnings season is characterised by increased market volatility, with individual stock prices frequently fluctuating significantly in response to announcements, particularly for growing companies.

Large financial institutions are usually among the first to release their quarterly reports, followed by earnings reports from major technology companies and industry leaders like IBM (IBM), Coca-Cola (KO), and Mastercard (MA).

Earnings reports from these “Bellwether” blue chips can serve as indicators of economic trends and the overall stock market.

What to expect from Q2 earnings

Analysts anticipate positive earnings growth for the S&P 500 in Q2 2024, driven by higher revenues across sectors. The estimated annual growth rate of 8.8% could be the highest since the first quarter of 2022.

The energy sector is recovering, with Exxon Mobil and Chevron leading the way in terms of expected earnings growth.

With an expected 8% increase, tech continues to perform strongly, significantly contributing to overall market growth. Investors will be keenly watching for signs of payoff from the sector's investments in generative AI.

Communication services is also expected to grow by double digits, with Alphabet driving the surge and becoming the second-largest contributor to the estimated earnings increase.

Positive estimate revisions are also happening in transportation, utilities, and automobiles.

Separately, the US banking sector is undergoing a transformation, with the prospect of increased consolidation through mergers and acquisitions. This could reveal undervalued banking stocks that pique traders' interest.

Earnings Calendar for July 2024

Past performance is not indicative of future results.

5 stocks to watch in July

1. JPMorgan Chase (12 July)

Analysts expect strong Q2 results from the largest American bank, with revenue and net income growth outpacing peers and the industry. However, the forecast of $4.272 earnings per share (EPS), while strong, is lower than in previous quarters. Investors will be keeping an eye on profitability as the bank deals with narrower margins, rising deposit costs, and potential loan losses.

2. Tesla (19 July)

Following a disappointing Q1 with a 9% revenue decline, Tesla faces another test. Analysts predict that Q2 EPS will fall to $0.574 from $0.63. Despite concerns about profitability and electric vehicle pricing power, CEO Elon Musk expressed optimism for future products. Investors will be closely monitoring management's guidance and Tesla's ability to weather economic headwinds.

3. Alphabet (25 July)

Alphabet (Google) crushed Q1 estimates with strong performance in Cloud and YouTube ads. They even announced a $70 billion buyback and first-ever dividend. However, an AI rollout controversy has investors concerned about its impact on future ad sales.

Despite this, Alphabet is expected to lead communication services earnings in the second quarter, with a projected EPS of $1.83 (up from $1.44) and the potential to drive the sector's massive 18.5% growth, the highest of any sector.

4. Meta Platforms (26 July)

Meta outperformed expectations in Q1 but guided lower for Q2, with revenue growth slowing from 27% to 18%. Despite this, Meta (EPS $4.72 expected vs. $2.98 last year) remains a key driver of communication services.

Investors will be watching Meta and Alphabet compete for digital ad dominance, as well as the impact of AI on advertising revenue.

5. Microsoft (25 July)

Microsoft's cloud business thrived in Q3 FY2024, increasing revenue by 17% YoY to $61.9 billion. Azure cloud services led the charge with a 31% increase, indicating strong demand for AI. Analysts expect this momentum to continue in the second quarter of 2024 (April–June), with an expected EPS of $2.93 (up from $2.69 in 2023).

Earnings Calendar for August 2024

Past performance is not indicative of future results.

6 stocks to watch in August

1. Amazon (1 August)

The recent $4 billion investment in AI startup Anthropic could have a substantial impact on Amazon Web Services (AWS) revenue growth, which remains a primary focus for investors. Despite lowered projections for both e-commerce and cloud services, analysts anticipate a substantial increase in Amazon's advertising revenue, particularly in the second half of the year. The stock price has surged over 20% year-to-date, though it has faced pressure in July.

2. Apple (1 August)

Apple is forecasting a 10% YoY increase in revenue to $84.3 billion, with an expected earnings per share of $1.34, a 13% rise from the previous quarter. iPhone sales are expected to show modest growth, primarily in emerging markets like India, while Mac and iPad sales are projected to keep recovering post-COVID. The services segment is expected to continue its rapid expansion. The launch of Apple's generative AI tools could potentially accelerate iPhone upgrade cycles.

3. Exxon (2 August)

Exxon Mobil (EXXON) is expected to lead the energy sector's turnaround in Q2 2024. With a projected EPS of $2.35 (up from $1.94 last year), Exxon is projected to be the sector's biggest contributor thanks to higher oil prices (average Q2 price: $80.60 vs. $73.56 in 2023).

4. Walt Disney (7 August)

Analysts predict an EPS of $1.16 in this last quarter, a rise from the $1.03 reported last year. Despite inflation and wage increases, theme park revenue is anticipated to show strong growth as a result of rising attendance and spending per guest. Increased competition from rivals like Universal Studios, however, could potentially lead to a short-term decline in attendance at Disney World. Disney+ and its streaming services are expected to show continued growth and improvement in profitability.

5. Siemens (8 August)

Siemens is projected to experience substantial growth, with orders and revenue surging compared to the same quarter of the previous year, driving EPS to $2.38. The company's upward trajectory is anticipated to continue into FY25, with the digital industries and smart infrastructure segments serving as key drivers.

6. NVIDIA (28 August)

Leading the generative AI boom, NVIDIA has significantly strengthened its market position. Projected to be the top contributor to year-over-year earnings growth in both the S&P 500 and the IT sector during Q2 2024, the company's revenue is expected to skyrocket to $28.42 billion from $13.51 billion last year, while EPS is set to climb from $0.27 to $0.64.

Earnings Calendar for September 2024

Past performance is not indicative of future results.

3 stocks to watch in September

1. Adobe Systems (12 September)

In their previous quarter, the digital media and marketing solutions giant reported earnings of $4.48 per share, beating analyst expectations by 2.05%. This growth was fuelled by strong performance in its Digital Media segment, particularly Creative Cloud products, and generative AI initiatives. Analysts expect Adobe to report earnings of $4.54 per share in the second quarter, reflecting a 10.76% increase over the previous year. Revenue is projected to reach $5.37 billion, a 9.72% increase from the same period last year. Given Adobe's recent outperformance of both the Computer and Technology sector and the S&P 500, investors will be closely watching to see if the company can maintain its momentum in Q2.

2. NIKE Inc (27 September)

Nike, the long-time leader of the sneaker and athletic apparel category, has been facing stiff competition in recent months from an abundance of new competitors. Despite these challenges, the company is taking steps to manage supply, reduce promotional activity, and invest in demand creation. Analysts forecast that Nike will report EPS of $0.53 and revenue of $11.64 billion for the quarter ending August 31, 2024, reflecting the company’s challenges and Nike's efforts to maintain its market position.

3. Carnival Corporation (30 September)

Carnival Corporation, a leading global cruise line, expects a strong third quarter in 2024, with significant growth in earnings per share (EPS) and revenue. Analysts expect the company to report an average EPS of $1.16 and revenue of $7.80 billion. Carnival's strong financial health, operational efficiency, and increased full-year earnings guidance all point to a positive outlook. Furthermore, strong booking trends for 2025, as well as an expected 8% increase in net yields compared to 2023 levels, support the company's optimistic outlook.

How to trade the earnings season with Axi

Axi offers access to CFDs on 495+ popular global shares, including NVIDIA (NVD), JPMorgan (JPM), Goldman Sachs (GS), Tesla (TSLA), Alphabet (GOOGL), Apple (AAPL), Amazon (AMZN), Meta Platforms (MVRS), Microsoft (MSFT), EXXON (XOM), and Walt Disney (DIS).

To stay informed about company earnings dates and trade the earnings season with Axi: 

1. Track Earnings: Use Axi's Earnings Calendar to stay ahead of the curve. 
2. Monitor & Analyse: Employ Axi's charting tools to monitor stock prices before, during, and after earnings, and analyse market expectations. 
3. Go Long or Short: Speculate on market movements with CFDs, leveraging Axi's reduced fees and tight spreads. 

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This information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. It has been prepared without taking your objectives, financial situation, or needs into account. Any references to past performance and forecasts are not reliable indicators of future results. Axi makes no representation and assumes no liability regarding the accuracy and completeness of the content in this publication. Readers should seek their own advice.