Earnings Season: Tesla and Netflix Results are Being Announced

Earnings Season Gaining Momentum

The earnings season is gaining momentum. Tesla (TSLA), Netflix (NFLX), General Motors (GM), and Ford Motor Company (F) will report their results this week. As of October 17, S&P 500 companies have reported results for 12% of their total. According to FactSet data, analysts expect an 8.5% increase in earnings per share for the third quarter of 2023. This will be the ninth consecutive quarter of positive growth, but it indicates a slowdown compared to the 12% growth in the second quarter of the year.

Expectations and Sector Representatives

Expectations for the quarter were somewhat lower, with analysts forecasting a 7.9% increase in earnings per share for S&P 500 companies in the third quarter. This week, results from key names such as Netflix, Tesla, GE Aerospace (GE), Coca-Cola (KO), Ford Motor Company, General Motors, and Intel Corporation (INTC) will be closely followed.

Many sectors, including airlines, toy manufacturers, and telecommunications providers, will be represented. Reports from consumer-focused companies like Procter & Gamble (PG) and Deckers Outdoors (DECK) will provide updates on consumer spending that continues to support the economy.

Institution Results and Market Reactions

American Express stock rose slightly after the company reported earnings exceeding expectations and provided an update on the revamped Platinum Card. Northrop Grumman (NOC) raised its profit forecast for 2025 due to conflicts in the Middle East and the Russia-Ukraine war. Elevance (ELV) shares also rose by 6% after the healthcare company's third-quarter earnings surpassed Wall Street estimates. Shares of Zions Bancorporation (ZION) increased by 3% after the bank indicated that its significant losses for the quarter were limited to just a few faulty loans.

General Assessment and Predictions

Bank of America analysts noted that 76% of S&P 500 companies reporting this week surpassed earnings forecasts, above the average of 68% for the first week. Among the results to be announced this week, names like Netflix, Tesla, Procter & Gamble, General Motors, and Ford stand out. In the following week, during the last week of October, 44% of the S&P 500 will report earnings.

Ally Financial (ALLY) stated that it has not seen significant deterioration in the subprime credit business. Third-quarter earnings came in at $1.18 per share, exceeding expectations. Truist (TFC) also increased its profit for the third quarter. Comerica (CMA) saw a slight decline in its stock, but net interest income increased by 7%.

CQ (CMA) reported generally stable operations in its third-quarter results. Fifth Third (FITB) excited investors after reporting earnings that surpassed expectations. Interactive Brokers (IBKR) experienced a 1% increase following a boost in customer transactions and strong third-quarter results.

CSX (CSX) and U.S. Bancorp (USB) also reported results above estimates. Charles Schwab (SCHW) reported earnings of $1.26 per share, exceeding Wall Street estimates.

Market General Outlook

Taiwan Semiconductor Manufacturing Company (TSM) announced a 39% increase in quarterly earnings. Its business relationships with major companies like Apple (AAPL) and Nvidia (NVDA) boosted the company’s revenues. Progressive (PGR), however, saw a 6% decline as it fell short of analyst expectations.