{"id":45205,"date":"2023-08-06T18:20:46","date_gmt":"2023-08-06T22:20:46","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/earnings-have-beaten-wall-street-estimates-by-more-than-usual-in-2nd-quarter-but-3rd-quarter-isnt-looking-great\/"},"modified":"2023-08-06T18:20:48","modified_gmt":"2023-08-06T22:20:48","slug":"earnings-have-beaten-wall-street-estimates-by-more-than-usual-in-2nd-quarter-but-3rd-quarter-isnt-looking-great","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=45205","title":{"rendered":"Earnings have beaten Wall Street estimates by more than usual in 2nd quarter, but 3rd quarter isn\u2019t looking great"},"content":{"rendered":"

Online retail giant Amazon.com Inc.\u2019s
\n AMZN,
\n +8.27%<\/bg-quote>
\n second-quarter results and third-quarter forecast sales last week were a bet that more consumers would start buying more things, but Wall Street\u2019s expectations for the third quarter overall have only grown dimmer.<\/p>\n

With most of the 500 companies that make up the S&P 500 Index
\n SPX
\n already through the second-quarter earnings reporting season, slightly more than normal have reported per-share profit that beat Wall Street\u2019s estimates, according to FactSet. <\/p>\n

\n

For the third quarter though, analysts now expect a mere 0.2% increase in per-share profit growth overall, according to a FactSet report on Friday, or slightly lower than the 0.4% growth that was expected for the third quarter on June 30, <\/p>\n

And with some two months still left in the third quarter, and with that forecast likely to come down as the period progresses, Wall Street\u2019s profit expectations are getting ever closer to turning negative. <\/p>\n

Wall Street analysts overall still expect a bigger rebound for the fourth quarter, the FactSet report said. And they expect 2023 overall to eke out a per-share profit gain of 0.8%. <\/p>\n

Worries of a U.S. recession emerging at some point during the back half of this year have started to fade at least a little after many economists fixated on the possibility earlier this year when the Federal Reserve was raising interest rates to combat a jump in inflation in 2022 . Some analysts now say savings fatigue could prompt more shoppers to splurge this year, after relentlessly tightening their budgets due to rising prices. <\/p>\n

Federal Reserve Chair Jerome Powell last month said policymakers at the central bank had also shucked off their worries of a downturn. <\/p>\n

See<\/strong>: Fed no longer foresees a U.S. recession \u2014 and other things we learned from Powell\u2019s press conference<\/p>\n

\u201cThe staff now has a noticeable slowdown in growth starting later this year in the forecast. But given the resilience of the economy recently, they are no longer forecasting a recession,\u201d he said last month. <\/p>\n

Not everyone is convinced that a downturn has vanished from the horizon though. Sheraz Mian, director of research at Zacks, told MarketWatch last month that more bearish analysts had kept pushing out their recession forecasts, after being defied by the actual, and more positive, economic data. Some economists continue to push out those forecasts. <\/p>\n

\u201cWe still expect a recession, but now we are looking for it to begin in Q1 2024 rather than\u00a0Q3\u00a02023,\u201d Thomas Simons, U.S. economist at Jefferies, said in a research note on Friday. <\/p>\n

He said that interest rate hikes from the Federal Reserve were only just starting to affect customer behavior. Households were trying to rebuild their savings, after spending through whatever they had built up during the pandemic. Student-loan payments were returning, he said, and corporate margins were thinning. <\/p>\n

\u201cCorporate\u00a0profit\u00a0margins are narrowing, and businesses will look to cut costs through layoffs,\u201d he said. <\/p>\n

This week in earnings<\/h2>\n

Among S&P 500 index companies, 34 report results during the week ahead, including one from the Dow Jones Industrial Average, according to FactSet. <\/p>\n

Results from Walt Disney Co.
\n DIS,
\n +0.95%<\/bg-quote>
\n will likely gobble up more media attention, but earnings from Paramount Global Inc
\n PARA,
\n +3.58%<\/bg-quote>
\n \u2014 which oversees CBS, Showtime, Comedy Central and other channels \u2014 will offer more detail about how studios are positioning themselves with Hollywood actors on strike. Lions Gate Entertainment Corp.
\n LGF.A,
\n -2.44%<\/bg-quote>
\n also reports. <\/p>\n

Results from Tyson Foods Inc.
\n TSN,
\n +0.34%<\/bg-quote>
\n will give investors and customers a brief look at the state of the grocery aisle where higher food prices over the past year have strained spending on other things. Beyond Meat Inc.
\n BYND,
\n -1.38%<\/bg-quote>,<\/span>
\n which also reports during the week, will be hoping new product launches of plant-based meat-like alternatives can overtake analyst skepticism, amid competition with fake meat and real meat alike. <\/p>\n

Elsewhere, ride-hailing platform Lyft Inc.
\n LYFT,
\n -5.73%<\/bg-quote>,<\/span>
\n online dating service Bumble Inc.
\n BMBL,
\n -3.86%<\/bg-quote>
\n and video-game maker Take-Two Interactive Software Inc.
\n TTWO,
\n -2.45%<\/bg-quote>
\n also report during the week. And Canadian pot producer Canopy Growth Corp.
\n CGC,
\n -3.47%<\/bg-quote>
\n will get another chance to pick up the pieces, after over-expanding and now trying to hold onto its cash. <\/p>\n

The call to put on your calendar<\/h2>\n

Disney drama:<\/strong> One way or another, people on both coasts are mad at Disney
\n DIS,
\n +0.95%<\/bg-quote>
\n Chief Executive Bob Iger right now, as his company prepares to report quarterly results on Wednesday. Shares of Disney are down slightly this year. The company is currently fighting with Florida Gov. Ron DeSantis, who is trying to stamp out Disney World\u2019s self-governing privileges after the company criticized the state\u2019s restrictions on classroom discussion of gender identity. When Iger accused striking actors and writers in Hollywood of not being \u201crealistic,\u201d the actors and writers shot back, noting his hefty executive compensation plan. <\/p>\n

While the friction in Florida hasn\u2019t hurt Disney\u2019s parks attendance, the Hollywood shutdown has threatened Disney\u2019s massive film and TV show operations, as Disney+ subscribers fall and investors more aggressively seek profits from studios\u2019 streaming operations. Elsewhere, Rich Greenfield, an analyst at LightShed Partners, said \u201cPixar and Disney Animation have not had a breakout hit that impacted children\u2019s play patterns and both Marvel and Lucasfilm feel increasingly tired from overuse.\u201d <\/p>\n

The sense is growing that more time is needed for Iger to fix Disney\u2019s problems. On Wednesday, analysts may get a deeper sense of how much more, with the chance of more drama between Disney and its home state and the writers and actors the company depends on. <\/p>\n

The number to watch<\/h2>\n

UPS and the Teamsters deal:<\/strong> United Parcel Service Inc. reports quarterly results on Tuesday, as rank-and-file Teamsters vote on a tentative labor agreement struck with the package deliverer in an effort to avert a strike. The deal, if approved, would raise worker pay and give the economy and businesses a breather, after threats of strikes or work stoppages at the nation\u2019s ports and railways were averted over the past year.<\/p>\n

Local Teamsters unions have voted overwhelmingly to at least endorse the agreement, between UPS
\n UPS,
\n -0.31%<\/bg-quote>
\n and the Teamsters union, which represents 340,000 UPS workers, but not everyone was happy with the deal. Some part-timers felt the Teamsters could have used their leverage to wrest more from UPS, following a profit windfall at the company. And investors have held out for more detail from UPS executives themselves on what the deal might mean for the bottom line and for shipping prices. <\/p>\n

Analysts will be dissecting the impact of the agreement as shipping demand lags, trucking company Yellow Corp.
\n YELL,
\n -0.83%<\/bg-quote>
\n reportedly shuts down and FedEx Corp.
\n FDX,
\n -0.20%<\/bg-quote>
\n tries to slash costs. <\/p>\n<\/p><\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Online retail giant Amazon.com Inc.\u2019s AMZN, +8.27% second-quarter results and third-quarter forecast sales last week were a bet that more consumers would start buying more things, but Wall Street\u2019s expectations for the third quarter overall have only grown dimmer. With most of the 500 companies that make up the S&P 500 Index SPX already through […]<\/p>\n","protected":false},"author":1,"featured_media":45206,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-45205","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nEarnings have beaten Wall Street estimates by more than usual in 2nd quarter, but 3rd quarter isn\u2019t looking great | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Online retail giant Amazon.com Inc.\u2019s AMZN, +8.27% second-quarter results and third-quarter forecast sales last week were a bet that more consumers would\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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