Earnings playbook: A complete guide for investors to the first reports of the season

Published Wed, Jan 12 20222:44 PM EST

Sara Salinas @in/saracsalinas @saracsalinas

The first of the fourth-quarter reports come in this week, with a few major banks and a key airline on deck to set the stage for what could be a tumultuous earnings season. Companies are facing rising costs, labor shortages and revived Covid concerns as the omicron variant drives new cases. CNBC runs through the big reports this week. Thursday Delta Air Lines is set to report quarterly results sometime around 7 a.m. ET, with an investor call to follow at 10 a.m. Last quarter: DAL posted a profit , but it warned rising fuel prices would squeeze its fourth-quarter bottom line. This quarter: Wall Street expects Delta to put up a per-share profit and revenue that's more than double year-ago levels. What CNBC airlines reporter Leslie Josephs is watching: "As Delta kicks off airline earnings season, its executives will likely detail the financial toll of cancellations resulting from winter storms and crew shortages. Investors have largely shrugged off airlines' recent struggles, though, and will be looking for signs of whether a surge in Covid cases is impacting leisure and more lucrative corporate bookings. Delta executives will certainly face questions about whether the airline is sufficiently staffed and on its cost outlook for the year." What history shows: Traditionally, Delta stock trades higher the day after a quarterly report, but shares have fallen in next-day trading for three of the last four quarters, according to Bespoke Investment Group. Friday JPMorgan Chase will release earnings at 6:45 a.m. ET and host a call with executives at 8:30 a.m. Last quarter: JPM exceeded profit expectations , helped by a $1.5 billion boost from better-than-expected loan losses This quarter: Analysts are forecasting EPS 20% below the same period a year earlier What CNBC banking reporter Hugh Son is watching: "Bank stocks have been a big beneficiary of rising expectations for interest rates, and JPM is up first with 4Q earnings. CEO Jamie Dimon has said his bank was "effectively stockpiling" cash to deploy later when rates have climbed. Given the recent moves in Treasury yields, analysts will want to know what the bank's strategy is now." What history shows: JPMorgan shares have lost ground following an earnings report over five of the last six quarters, according to Bespoke, shedding roughly 2% each time. Wells Fargo is due to report earnings at 7 a.m. ET, followed by an analyst call at 10 a.m. Last quarter: WFC saw a nearly 60% jump in profit and beat on revenue expectations This quarter: The Street is looking for 73% earnings upside, despite minimal year-over-year revenue growth What CNBC banking reporter Hugh Son is watching: "Shares of Wells Fargo, a top pick of several Wall Street analysts for 2022, have already climbed 15% so far this year. That's because it is considered one of the most interest-rate sensitive banks. Analysts will be keen to understand how the Fed's expected hikes this year will impact the firm's earnings." What history shows: Wells Fargo stock typically fares poorly after a quarterly release, trading higher just 37% of the time, according to Bespoke. Citigroup is set to report earnings at 8 a.m. ET, with an investor call scheduled at 11 a.m. Last quarter: C saw profit surge 48% , driven by strong trading revenue This quarter: Wall Street expects earnings to come in about 32% lower than the same quarter a year ago What CNBC banking reporter Hugh Son is watching: "Citigroup threw investors a curve ball last month when CFO Mark Mason disclosed that the bank was temporarily suspending stock buybacks because of impending regulatory demands. Given the bank's relatively weak stock, investors are keen for repurchases to resume this year — will executives commit to that?" What history shows: Last quarter shares of Citigroup snapped a six-quarter next-day losing streak and gained 0.77% on the day, according to Bespoke.

A trader in a face mask works on the trading floor at the New York Stock Exchange (NYSE) as the Omicron coronavirus variant continues to spread in Manhattan, New York City, U.S., December 20, 2021.

Andrew Kelly | Reuters

The first of the fourth-quarter reports come in this week, with a few major banks and a key airline on deck to set the stage for what could be a tumultuous earnings season.