Important earnings this week from Apple, Alphabet, and Amazon

Equities 10 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  Q4 earnings have so far shown that considerable margin pressures are taking place and in particularly in the technology sector. Therefore a lot is at stake this week with major earnings reports from Apple, Alphabet, and Amazon all reporting on Thursday after the market close. Analysts are not particularly optimistic going into these technology earnings reflecting the pressures on margins. We also cover earnings tomorrow from UPS, Caterpillar and Snap.


Technology earnings to hit markets

This week is very important for equity markets as a large part of the index weight will report this week with the highlight being earnings from Apple, Alphabet, and Amazon all reporting on Thursday after the market close. With the weak outlooks from Intel and Microsoft there is nervousness in the air ahead of these giant earnings releases. Analysts expect Apple to report the first negative revenue growth rate in three years down 2% y/y and a 7% decline y/y in EPS. The indications we have got from memory chip manufacturers all indicate a significant slowdown in consumer electronics and it would be wild if Apple could escape those headwinds. Alphabet is the talk of town due to Microsoft’s $10bn investment in OpenAI and its ChatGPT technology and many are saying is a threat to Google’s search business; in an equity note tomorrow we will dive into this discussion providing our views on the matter. Analysts expect Alphabet to report its second straight quarter of negative earnings growth with EPS at $1.32 down 6% y/y. Amazon was the big loser together with the e-commerce segment last year and Amazon was particularly hard hit due to overinvestments during the pandemic. Things improved in Q3 with accelerating revenue growth but analysts remain sceptical for Q4 expecting only 6% revenue growth y/y and EPS of $0.52 up 9% y/y.

Amazon share price | Source: Saxo

But before the important technology earnings on Thursday, the market will already get its appetizer tomorrow with key macro earnings from UPS, Caterpillar, and Snap. All three companies will provide different input on the macro economy which can be of great use for the investor. UPS is the world’s largest logistic company and thus is a good temperature on cross-border trading and e-commerce. Analysts expect UPS to report a meagre 1.1% y/y revenue growth and flat EPS y/y at $3.58. Caterpillar is always interesting because of its footprint in cyclical industries such as mining and construction including its large revenue exposure to China. Analysts expect revenue growth of 11% y/y and EPS growth of 30% y/y driven by strong demand in its mining equipment business. In the last couple of earnings seasons Snap has been a market moving event as the company provides the first picture of global online advertising demand. Analysts are quite muted going into the Q4 earnings seeing only 0.5% revenue growth y/y but EPS increasing to $0.08 up from $0.01 a year ago.

Insane margin pressure in US technology companies

The conclusions so far about Q4 earnings are that the outlook is deteriorating, uncertainty remains elevated, and margins are coming down hard making it difficult for companies to deliver the consensus EPS estimates for FY23. The Nasdaq 100 companies are so far reporting a 1.2%-point reduction q/q in the profit margin in Q4 extending the 0.9% reduction q/q in Q3. Since the peak in profit margin in Q2 2021 the profit margin has declined by 3.9%-points in the Nasdaq 100 to the current level of 13.3% which is below the average of 13.8% since 2010. The margin squeeze theme will stay with market for the first half of the year and then depending on whether we get a recession or not the theme could extend into the second half. With equity markets priced for perfection on inflation, earnings, and recession we only need a small deviance from expectations before equity markets could be roiled again.

The list below highlights all the most important earnings releases this week across the different equity markets we track.

  • Today: Ryanair, UniCredit, Sumitomo Mitsui Financial Group, Canon, Philips, NXP Semiconductors, GE HealthCare Technologies
  • Tuesday: Canadian Pacific Railway, Daiichi Sankyo, Fujitsu, UBS Group, Exxon Mobil, Pfizer, McDonald’s, UPS, Caterpillar, Amgen, AMD, Mondelez, Marathon Petroleum, Electronic Arts, Spotify, Snap
  • Wednesday: Novo Nordisk, Orsted, Keyence, Hitachi, GSK, BBVA, Novartis, Meta, Thermo Fisher Scientific, Southern Copper
  • Thursday: DSV, Dassault Systemes, Siemens Healthineers, Infineon Technologies, Deutsche Bank, Sony, Takeda Pharmaceutical, Shell, ING Groep, Banco Santander, Siemens Gamesa Renewable Energy, Nordea, Roche, ABB, Apple, Alphabet, Amazon, Eli Lilly, ConocoPhillips, Qualcomm, Honeywell, Starbucks, Gilead Sciences, JD.com, Ford Motor, Ferrari
  • Friday: Coloplast, Sanofi, Intesa Sanpaolo, Denso, CaixaBank, Naturgy Energy, Assa Abloy, Regeneron Pharmaceuticals

Quarterly Outlook

01 /

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.