The third-quarter earnings season is well underway in the United States, already with a week of results under its belt.
Since the beginning of the US earnings season, the S&P 500 Index has pushed a further 3.6% higher on optimistic sentiment among investors. In fact, the iconic US index has rallied for five consecutive sessions — indicating the market is fairly satisfied with the calibre of earnings so far.
Let’s recap some of the companies which have already reported, and take a look at what is coming up.
US earnings standing in the limelight
Last week kicked off third-quarter results with a barrage of numbers from some of the biggest financial institutions in the world. This included JPMorgan Chase & Co. (NYSE: JPM), Bank of America Corp (NYSE: BAC), Citigroup Inc (NYSE: C), and Wells Fargo & Co (NYSE: WFC).
Setting a high standard, all of these US names beat both revenue and earnings expectations. Unsurprisingly, being the biggest of the companies listed above, JP Morgan posted the highest revenue for the quarter — coming in at US$30.44 billion. This was slightly above estimates of $29.8 billion, despite a dampening from the delta variant.
The commonality among these financial players was the additional boost from reserve releases during the quarter. As a result, the banks have cautioned that earnings in the future will be on the shoulders of their core earnings. This will mean heightened importance on growing loans and increasing interest rates to deliver larger profits.
Changing gears, this week has started with the highly anticipated third-quarter earnings from Netflix Inc (NASDAQ: NFLX). Last night the video streaming behemoth revealed it had added a further 4.4 million subscribers during the last quarter, which was 560,000 more than analysts had expected. Likewise, the company delivered expectation-beating earnings per share (EPS) of $3.19.
Commenting on the results, Netflix co-CEO Reed Hastings said:
We’re in uncharted territory. We have so much content coming in Q4 like we’ve never had, so we’ll have to feel our way through and it rolls into a great next year also.
The result follows the hugely successful show, “Squid Game”. The Korean dystopian show has amounted to 142 million member household views in the first four weeks.
What’s coming up next?
The rest of this week’s US earnings will include some recognisable tech brands. For instance, Telsa Inc (NASDAQ: TSLA) will post its quarterly earnings tonight. This comes after the company shared its quarterly production and delivery numbers at the beginning of the month.
Following on from that, Snap Inc (NYSE: SNAP) is expected to share its quarterly results on Thursday night. Analysts are forecasting revenues around US$1.09 billion, indicating a 60% increase year on year for the social media giant.
Finally, to put it into perspective, 82% of S&P500 companies that have reported so far have topped estimates.