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Q2 Earnings Season In Focus

Zacks Equity Research
Is (LXFR) Outperforming Other Industrial Products Stocks This Year?

Market indexes are blossoming over the past week or so, even as global uncertainties begin to pile up regarding trade tensions with China and other important commerce partners, leadership issues in the U.K. ahead of tomorrow’s NATO meeting in Brussels, and elsewhere. But there is a bright, shining beacon markets appear to be attracted to currently: Q2 earnings season.

Q2 may be among the strongest we’ve seen in our entire multi-year economic recovery (though Q1’s +24.6% year over year earnings growth will be tough to surmount), with a possible 4-handle on GDP for the quarter expected by a plurality of analysts later this month. Results from companies on the S&P 500 have already begun to start off this earnings season with a bang — companies like Nike NKE and FedEx FDX outperformed estimates in past weeks — and expectations are big coming into the heart of Q2 reporting.

We see at the end of this week some of the biggest banks in the country reporting, including JPMorgan JPM, Citigroup C and Wells Fargo WFC. And, while year over year growth is expected to be substantial for these and companies like them, the Finance sector overall is underperforming the overall market. This has more to do with interest rate level questions and concerns about the yield spread between the 2-year and 10-year bond than the machinations of the companies themselves.

For a comprehensive view of banks’ performance and what to look for in Q2, check out Zacks Director of Research Sheraz Mian’s latest Earnings Preview: What’s Keeping Bank Stocks Down?

Ahead of today’s opening bell, Zacks Rank #4 (Sell)-rated PepsiCo PEP put out a mixed earnings report, beating on the bottom line by a dime to $1.61 per share — up 7% in constant currency terms year over year. Revenues came in a smidge beneath expectations at $16.1 billion for the quarter, but shares are currently up about 2 1/2% in today’s pre-market. For more on PEP’s earnings, click here.

Another interesting stock, reporting after the closing bell today, should be VOXX International VOXX, a small-cap audio/visual and security firm specializing in auto and mobile (formerly Audiovox). This company, over the past two quarters has averaged a positive earnings surprise over 450%. Tomorrow, we look for results on Delta Air Lines DAL, Fastenal FAST and AngioDynamics ANGO.

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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
Wells Fargo & Company (WFC) : Free Stock Analysis Report
Citigroup Inc. (C) : Free Stock Analysis Report
Pepsico, Inc. (PEP) : Free Stock Analysis Report
Fastenal Company (FAST) : Free Stock Analysis Report
VOXX International Corporation (VOXX) : Free Stock Analysis Report
AngioDynamics, Inc. (ANGO) : Free Stock Analysis Report
NIKE, Inc. (NKE) : Free Stock Analysis Report
FedEx Corporation (FDX) : Free Stock Analysis Report
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