Earnings playbook: The first big week of the season includes reports from Netflix and big banks

Published Sun, Oct 13 20248:56 AM EDTUpdated Mon, Oct 14 20248:22 AM EDT

The first big week of the earnings season is here, with several major financial and consumer-facing stocks slated to report their latest results. Nearly 40 S & P 500 companies are scheduled to post their calendar third-quarter results, including Netflix and Procter & Gamble . Big banks Goldman Sachs and Bank of America are also on deck. The earnings season got off to a strong start last week, with JPMorgan Chase, Wells Fargo and BlackRock beating expectations. Overall, 73% of the companies that have posted earnings have exceeded analyst estimates, FactSet data shows. Tuesday Bank of America is set to report earnings before the bell, followed by a call at 8:30 a.m. ET. Last quarter: Bank of America jumped after saying a rebound in net interest income was coming . This quarter: Analysts expect a double-digit earnings decline from the year-earlier period, per LSEG. What CNBC banking reporter Hugh Son is watching: " Bank of America has fumbled the rate story on the way up, leading to outsized investment losses. How will they do as rates decline?" What history shows: Bank of America shares have risen in 10 of the last 12 earnings days, according to Bespoke Investment Group. The company has also beaten earnings expectations 79% of the time. Goldman Sachs is set to report earnings in the premarket. A call with management is also slated for 9:30 a.m. Last quarter: Goldman exceeded estimates, thanks to strong fixed income trading revenue . This quarter: Analysts polled by LSEG expect the bank to report strong year-over-year earnings growth. What CNBC banking reporter Hugh Son is watching: "Goldman Sachs should have tailwinds so long as the easing story is intact; rival JPMorgan posted solid beats on investment banking and trading, and these businesses should pick up steam if rates are falling." What history shows: Goldman exceeds expectations 86% of the time, according to Bespoke. Shares have also risen in four of the last five earnings days. United Airlines is set to report earnings after the close. A conference call is set for the next day at 10:30 a.m. Last quarter: United Airlines reported a 23% earnings jump but issued disappointing third-quarter guidance . This quarter: LSEG data shows analysts think United's earnings fell more than 10% year over year. What CNBC airlines reporter Leslie Josephs is watching: "United Airlines executives are expected to be upbeat about travel demand and yields, especially since the industry has been dialing back capacity in the oversupplied U.S. market. They'll of course face questions about the U.S. presidential election's impact on bookings after rival Delta forecast a 1-percentage point revenue hit because of subdued demand before and after the vote. If you're looking for an eye into Boeing's ongoing strike, listen to United's executives' commentary about their delivery schedule. Also expected: an update to talks with United's flight attendants' union, one of the last big labor groups left to reach a deal with a carrier in this cycle." What history shows: United earnings beat estimates 71% of the time, Bespoke data shows. However, shares average a 0.6% decline on earnings days. Wednesday Morgan Stanley is set to report earnings before the bell, followed by a call at 8:30 a.m. Last quarter: Morgan Stanley beat expectations, thanks to strong revenue from trading and investment banking . This quarter: The bank is expected to report solid year-over-year earnings and revenue growth, according to LSEG. What CNBC banking reporter Hugh Son is watching: " Morgan Stanley has several advantages at the moment; high market valuations and falling rates help the firm's wealth managers and relieve pressure on cash holdings." What history shows: Morgan Stanley earnings beat expectations 78% of the time, per Bespoke. The stock also averages a gain of 0.8% on earnings days. Thursday Netflix is set to report earnings after the bell, with a call scheduled for 4:45 p.m. Last quarter: Netflix earnings beat expectations, thanks to a 34% increase in ad-supported memberships . This quarter: Analysts see more than 30% earnings growth for the streaming giant from the year-earlier period, LSEG data shows. What to watch: Netflix heads into this report riding high, gaining about 6% over the past month. However, Deutsche Bank analyst Bryan Kraft thinks there's little margin for error. "We remain at a Hold rating given what we believe is a valuation, at 31x 2025E EPS, that leaves little opportunity for further multiple expansion and will likely contract as growth slows heading into 2025 due to the waning temporary net add benefit from paid sharing," Kraft wrote last week. What history shows: Netflix tends to struggle on earnings days, averaging a slight decline, according to Bespoke. Shares have also fallen in two of the last three earnings days, including a 9.1% drop in April. Friday Procter & Gamble is set to report earnings in the premarket, followed by a call at 8:30 a.m. Last quarter: P & G posted weaker-than-expected sales due to waning demand out of China . This quarter: The Ivory soap and Crest toothpaste maker is expected to post single-digit earnings growth for the fiscal first quarter. What to watch: Procter has struggled recently, losing more than 1% in the past month. Barclays doesn't see company's results moving the needle too much. Analyst Lauren Lieberman downgraded the stock on Sept. 30 to equal weight from overweight. "Unfortunately, while growth in the US, its home market, has held up well with continued value and volume share gains, we expect these other markets to continue to weigh on overall growth over the next 12 months," she wrote. What history shows: Bespoke data shows Procter & Gamble beats earnings expectations 85% of the time. Shares have also risen in five of the last six earnings days.