Apple, Citigroup, J.P. Morgan, and Caterpillar are part of Zacks Earnings Preview: - Press Releases

Zacks Equity Research
Updated
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For Immediate Release
 
Chicago, IL – February 05, 2015 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Apple (AAPL-Free Report), Citigroup (C-Free Report), J.P. Morgan (JPM-Free Report) and Caterpillar (CAT-Free Report).
 
To see more earnings analysis, visit https://at.zacks.com/?id=3207.
 
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Revenue Weakness Stands Out in Q4 Earnings
 
Including Wednesday morning’s reports, we now have Q4 results from 274 S&P 500 members that combined account for 69.9% of the index’s total market capitalization. Total earnings for these 274 companies are up +6.7% from the same period last year, with 71.9% beating earnings estimates. Total revenues are up +0.2%, with 52.9% beating top-line estimates.

Comparing the results thus far with what we have been seeing from the same group of companies in other recent quarters in terms of growth rates, beat ratios, and guidance presents a mixed picture.
 
We have discussed the Apple (AAPL-Free Report) effect in this space before and the effect is very pronounced.
 
We should keep in mind however that Apple isn’t the only ‘unusual’ factor this earnings season. Results from the Finance sector, particularly tough comparisons at Citigroup (C-Free Report) and J.P. Morgan (JPM-Free Report), have been a drag on the aggregate growth picture. And then we have the whole oil situation, with profitability of the Energy sector companies following what has been happening to oil.
 
But irrespective of whether we look at the results as a whole or piecemeal, the weakness on the revenue side comes through – revenue growth rate is tracking below other recent quarters whether we look at the results with or without Apple, Finance or Oil.

Another common theme in the reports thus far is the impact of a strong dollar and sharp fall in oil prices. The oil price impact hasn’t been restricted to the Energy sector alone, even companies like Caterpillar (CAT-Free Report) have been affected. Estimates for Q4 had fallen more than normal due to the oil development and we are seeing the trend play out in a big way in estimate revisions for the current and following quarters.

In fact, the magnitude of energy-driven negative revisions for 2015 Q1 and Q2 is so severe that the first half 2015 earnings growth rate for the S&P 500 index as a whole has almost evaporated.
 
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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APPLE INC (AAPL): Free Stock Analysis Report
 
CITIGROUP INC (C): Free Stock Analysis Report
 
JPMORGAN CHASE (JPM): Free Stock Analysis Report
 
CATERPILLAR INC (CAT): Free Stock Analysis Report
 
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