Third Quarter Earnings: What Are Investors Expecting?

Third Quarter Earnings Reports on the Way

With most of the third quarter earnings results behind us, this week investors are eagerly awaiting reports from The Walt Disney Company (DIS) and Alibaba (BABA).

So far, the third quarter earnings season has had a positive start. According to FactSet data, as of November 7, 91% of S&P 500 companies have reported results, and analysts expect a 13.1% increase in earnings per share for the third quarter. If this rate continues, it will mark four consecutive quarters of double-digit earnings growth.

Earnings expectations were quite low ahead of the third quarter, with analysts anticipating a 7.9% increase in earnings per share for S&P 500 companies as of September 30.

Last week, attention was drawn to results from technology and artificial intelligence players such as Palantir (PLTR), AMD (AMD), Supermicro (SMCI), and Constellation Energy (CEG). Additionally, reports from Uber (UBER), Spotify (SPOT), Snap (SNAP), and Airbnb (ABNB) were also in the spotlight.

This week, reports from several companies, including The Walt Disney Company, Applied Materials (AMAT), CoreWeave (CRWV), Occidental Petroleum (OXY), Rocket Lab (RKLB), Oklo (OKLO), Cisco Systems (CSCO), and Alibaba, will be announced.

Applied Materials (AMAT) shares fell more than 2% after its quarterly results, with the company reporting a slowdown in revenues but offering a more optimistic forecast for the first quarter. The company set its revenue forecast for the current quarter at $6.85 billion (+/- $500 million), compared to analysts' average expectation of $6.76 billion. Its earnings per share were reported at $2.38, exceeding the $2.06 predictions but showing a slowdown compared to the same period last year.

Disney (DIS) shares dropped 3% in pre-market trading after missing analyst estimates for third quarter earnings. The declines in the company's linear television business were offset by strong results in its parks and streaming divisions.

Cisco Systems (CSCO) shares rose more than 6% as the demand for data center expansion increased. McGraw Hill (MH) shares also saw a rise of over 22% after the company raised its full-year forecast. The company reported earnings per share of $0.57, surpassing the forecast of a $0.07 loss.

Venture Global (VG) shares rose by over 6% as its third quarter revenues increased by 260% compared to last year.

The earnings season is not yet over, and all eyes are on Disney and the reports of other large companies. Overall trends appear more positive, despite sharp declines experienced by some individual companies.