Q3 Earnings: Four Things To Know

With Q3 earnings season around the corner, Alpha Now has put together a list of the key things you should know including our four predictions for the S&P 500:

1. Guidance – What goes up must come down

Guidance is on a rollercoaster ride this quarter. With 3.8 negative pre-announcements to each positive one, guidance is stronger than what it has been in previous quarters. However, guidance is still more negative than historical averages.

2. Financials expected to steal the limelight

After a dismal quarter, financials are expected to make a full recovery with 10% earnings growth. Citigroup and JP Morgan will make a U-turn and are likely to be the shining stars of the group. On the flip side, Bank of America is expected to continue to struggle with legal issues.

3. Consumer Discretionary sector to take a hit?

It won’t be surprising if the consumer discretionary sector disappoints in Q3, with companies like Ford and Pulte Group expected to decline. However, the road may not be as bumpy for Amazon who could see a 22% increase in sales. Yet, although their products are enticing, profits are still likely to remain low. Read our Amazon Report for more on this.

4. Revenue wading through the water

Expect to see a 4% improvement in revenue, which is a slow, yet steady development from what revenue has previously been. Some of the notable companies expected to drive revenue growth are Chipotle Mexican Grill, Under Armour, and Netflix.

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