Earnings playbook: An investor's guide to the big reports this week as earnings season picks up

Published Mon, Jan 17 20226:20 AM EST

Sara Salinas @in/saracsalinas @saracsalinas

Earnings season picks up this week, with quarterly reports from the remaining major banks, more airlines and the first tech company of the reporting period. JPMorgan Chase on Friday reported inflationary headwinds, lowering guidance and sending shares tumbling. That could prove a bad omen for Goldman Sachs, Bank of America and Morgan Stanley as they offer updates this week. United Airlines, American Airlines and Netflix are also due to report, alongside Procter & Gamble. CNBC breaks down what to watch for. Tuesday Goldman Sachs is set to report quarterly earnings at 7:30 a.m. ET, followed by an investor call at 9:30 a.m. Last quarter: GS crushed analysts' estimates on strong investment banking and trading results This quarter: Wall Street analysts expect a slight EPS downside and minimal revenue growth on a year-over-year basis What CNBC banking reporter Hugh Son is watching: "Goldman has thrived while trading and deal-making has boomed, but what happens when those activities slow down? That is a key question for CEO David Solomon's bank. Another: How will wage inflation impact Goldman after rivals at JPMorgan cited expenses as a drag to future earnings?" What history shows: Goldman's recent trading history around earnings reports is pretty mixed. The stock has gained ground 2 of the last 4 quarters, according to Bespoke Investment Group. Wednesday Bank of America is due to report its results at 6:45 a.m. ET, with an analyst call set for 11 a.m. Last quarter: BAC exceeded expectations on better-than-expected loan losses and record advisory and asset management fees This quarter: The Street expects almost 30% earnings growth year over year What CNBC banking reporter Hugh Son is watching: "Bank of America is often cited as a favored play on rising interest rates. Analysts will be curious about how CEO Brian Moynihan is navigating higher personnel expenses, however, after rivals mentioned upward pay pressure." What history shows: Last quarter, Bank of America shares snapped a 7-quarter next-day losing streak, rising more than 4% the day after its earnings report, according to Bespoke. Procter & Gamble should release earnings at 6:55 a.m. ET and will host a investor call at 8:30 a.m. Last quarter: P & G earnings topped estimates as price hikes helped offset costs, but the company warned of more inflation risk ahead This quarter: Analysts are forecasting earnings to barely edge out year-ago levels What CNBC restaurants reporter Amelia Lucas is watching: "Inflation and supply chain headwinds are once again in focus for Procter & Gamble. To mitigate higher costs, the company has been raising prices on certain products across its portfolio, but that could impact what consumers choose to buy. This also marks the first quarter with Jon Moeller as chief executive after former CEO David Taylor stepped down." What history shows: Procter & Gamble shares typically post minimal moves in either direction the day after an earnings release, according to Bespoke. Morgan Stanley is set to report earnings at 7:30 a.m. ET, followed by an investor call at 8:30 a.m. ET Last quarter: MS beat estimates , boosted by record investment banking and asset management results This quarter: Wall Street is looking for single-digit growth in both EPS and revenue What CNBC banking reporter Hugh Son is watching: "Morgan Stanley, with its emphasis on wealth management and Wall Street, has been firing on all cylinders as of late. Analysts expect management could update their annual return targets when they post 4Q results on Wednesday." What history shows: Morgan Stanley shares usually come out ahead the session following an earnings report, according to Bespoke, gaining just shy of 1% on average. United Airlines will report its quarterly results just after market close and will host a call with executives at 10:30 a.m. the following day Last quarter: UAL reported higher-than-expected revenue after travel demand rebounded This quarter: Analysts are forecasting continuing losses per share but massive revenue upside What CNBC airlines reporter Leslie Josephs is watching: "United isn't immune to the wave of omicron sweeping the country and investors will want to hear how much flight cancellations tied to a surge in Covid staff outages cost the airline. So far, investors have focused on the longer term forecast for a rise in bookings this year, but United executives are likely to provide greater detail on how many of its lucrative corporate clients are flying again. Also on the radar: What is the impact of the pause on Boeing's 787 deliveries? Competitor American has already trimmed its international flights for this year. United has had an added challenge in the grounding of its Pratt & Whitney-powered 777s, after engine failure last February. " What history shows: United shares have a rough track record in next-day trading, losing ground 7 of the last 8 quarters, according to Bespoke. Thursday American Airlines is due to report results around 7 a.m. ET, with an analyst call set for 8:30 a.m. Last quarter: AAL put up a profit thanks to federal aid and improving revenue This quarter: Wall Street is expecting a quarter very similar to United's — a per-share loss but big year-over-year revenue growth What CNBC airlines reporter Leslie Josephs is watching: "American last week trimmed its fourth-quarter loss forecast thanks to higher revenue, but it warned costs would be higher than expected. Higher costs from the re-ramp in service has been an issue for carriers, including American, which offered employees incentive pay over the holidays to avoid staffing shortfalls. The airline will likely give an update on its hiring efforts as it competes with other carriers for pilots, flight attendants, baggage handlers and other workers. This will be CEO Doug Parker's last earnings call. His successor, American's president Robert Isom, will give investors more detail on his plans for the airline before he takes over at the end of March, though he's expected to stay the course ." What history shows: American stock trades higher following a quarterly release half the time, according to Bespoke, but the fourth quarter is its strongest for next-day trading. Netflix will report earnings at 4 p.m. ET and should post its traditional pre-taped call with executives at 6 p.m. Last quarter: NFLX posted solid beats on both earnings and new subscribers This quarter: Analysts are predicting EPS 30% below year-ago levels What CNBC media reporter Alex Sherman is watching: "Netflix is down about 25% from its November highs. The question for this quarter is how much of that decline is based on 2021 4th quarter subscriber gains and 2022 1st quarter subscriber estimates? If Netflix's sub numbers fall slightly under forecast but are generally in range, it's possible investors will decide the recent pullback has already baked in a slight miss. At a more macro level, Netflix has consistently led 'The Streaming Wars' in global customers and expansive new content, but that narrative is now several years old. Investors may be tiring of what's become a less exciting, lower growth story." What history shows: The fourth quarter is traditionally strong for Netflix in next-day trading, according to Bespoke. The stock gains an average of 10% after a Q4 release.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, January 12, 2022.

Brendan McDermid | Reuters

Earnings season picks up this week, with quarterly reports from the remaining major banks, more airlines and the first tech company of the reporting period.