Earnings playbook: The investing game plan as Apple and Alphabet lead the busiest week of the season

Published Sun, Jul 24 20228:54 AM EDT

Brace yourselves. This upcoming week will be the busiest of the corporate earnings season, with more than 150 S & P 500 names set to report. Apple, Alphabet, Meta Platforms and McDonald's are all among those on deck. The earnings season has been a mixed bag thus far. Roughly 21% of S & P 500 components have reported through Friday, with nearly 70% beating analyst expectations, according to FactSet. There have been some big upside surprises, including Netflix. However, companies including Snap have posted much weaker-than-expected results. Take a look at CNBC Pro's breakdown of what's expected from next week's biggest reports. Tuesday Coca-Cola is set to report earnings before the bell, followed by a conference call at 8:30 a.m. ET. Last quarter: KO reported better-than-expected earnings on the back of a double-digit jump in revenue. This quarter: Analysts expect single-digit revenue growth for the beverage giant, according to Refinitiv. What CNBC restaurants reporter Amelia Lucas is watching: "Like most consumer companies, Coke has been leaning on price increases to pass along higher costs to consumers. But will the beverage giant need even more price hikes this year? And will consumers still be willing to pay more for their Powerade and Sprite? Rival PepsiCo said earlier this month it's expecting costs to spike higher in the second half of the year." What history shows: Coca-Cola has posted gains in each of the last three earnings days, according to Bespoke Investment Group. McDonald's is set to report in the premarket, with management slated to hold a conference call at 8:30 a.m. Last quarter: MCD's revenue topped expectations, thanks in part to higher prices and overseas same-store sales growth . This quarter: Refinitiv data shows McDonald's earnings are expected to grow slightly from the year-earlier period. What CNBC restaurants reporter Amelia Lucas is watching: "As the largest U.S. restaurant by sales, McDonald's is seen as a bellwether for the broader restaurant industry. Last quarter, executives said low-income consumers were starting to trade down, shrinking their orders or opting for cheaper items. Now the big question is if the trend has worsened." What history shows: McDonald's shares have popped more than 2% in each of the last three earnings days, shows Bespoke. General Motors is slated to post its latest quarterly figures before the open. Company management is scheduled to hold a call at 8:30 a.m. ET. Last quarter: GM maintained its 2022 outlook despite rising costs and supply chain issues . This quarter: The automaker's revenues are expected to remain flat year over year. However, the company's bottom line is expected to tumble by about a third, according to Refinitiv. What CNBC electric vehicles reporter John Rosevear is watching: "Supply chain, supply chain, supply chain. Covid-related disruptions have been playing havoc with the automotive supply chain for well over a year now, as anyone who has visited an auto dealership – and seen the empty lots – knows. We already know that GM's supply-chain problems continued into the second quarter , but is there an end in sight? CEO Mary Barra told investors in April that GM expected supplies of key components like semiconductor chips to normalize after the middle of the year. Is that happening? I'll be paying close attention to her comments on that front." What history shows: General Motors averages a marginal gain on earnings days, according to Bespoke. However, the stock fell more than 4% after its last quarterly report was released. Alphabet is scheduled to report after the bell, with management expected to hold a conference all at 5 p.m. ET. Last quarter: GOOGL posted earnings that missed analyst expectations on a big YouTube advertising revenue miss . This quarter: The tech giant is expected to report double-digit revenue growth, Refinitiv data shows. What CNBC tech reporter Jennifer Elias is watching: "Analysts expect to see Alphabet to show more resilience than other ad companies such as Facebook (Meta) and Snap, given Google's broad range of advertisers and it doesn't rely on Apple's iOS privacy changes. Analysts will also be paying attention to the company' cloud computing demand for any signs of softening. They'll also be looking for TikTok's impact on YouTube after the video platform showed a big miss last quarter." What history shows: Shares of the Google-parent company typically do well after reporting earnings, averaging a gain of 1.7%, according to Bespoke. Microsoft is set to post its latest quarterly results after the close. Company management is slated to hold a conference call with analysts at 5:30 p.m. ET. Last quarter: MSFT's results beat estimates across the board, with revenue growing by 18% year over year . This quarter: Analysts expect Microsoft to report single-digit earnings growth year over year, according to Refinitiv. What CNBC tech reporter Jordan Novet is watching: "Indications of market conditions suggest that Microsoft might not have had its best quarter yet. One estimate said PC shipments declined more sharply than it had in nine years, while digital advertising companies Snap and Twitter in recent days have reported running into macroeconomic headwinds. Those trends might hurt results in Microsoft's personal computing segment. But the company's commercial business, including the Azure public cloud and Office productivity software, should be resilient in a more challenging economic climate, Morgan Stanley analysts led by Keith Weiss, with the equivalent of a buy rating on Microsoft stock, wrote in a Thursday note." What history shows: Microsoft has posted strong gains after the release of its past two earnings reports, including a 4.8% pop on April 27. Chipotle is scheduled to report earnings after the close, followed by a conference call at 4:30 p.m. ET. Last quarter: CMG earnings topped expectations thanks to higher prices, which helped offset soaring costs . This quarter: Analysts see strong year-over-year earnings and revenue growth for Chipotle, according to Refinitiv. What CNBC restaurants reporter Amelia Lucas is watching: "Chipotle's pricing power has so far helped it withstand any significant consumer backlash over price hikes. But will that change this quarter? The burrito chain also has a robust delivery business through third parties, but spiking gas prices have made those orders even more expensive." What history shows: Chipotle shares average a gain of 1.65% after the fast-casual restaurant company reports earnings, Bespoke data shows. Wednesday Boeing will post earnings before the bell, and management will hold a call at 10:30 a.m. ET. Last quarter: BA posted a loss as the airplane maker grappled with delays on commercial and defense programs . This quarter: Analysts expect Boeing to report a loss for the previous quarter on small year-on-year revenue growth, Refinitiv data shows. What CNBC airlines reporter Leslie Josephs is watching: "Fresh from winning high-profile orders at the Farnborough Air show from customers such as Delta Air Lines amid a travel boom, Boeing executives will provide more detail about the host of challenges ahead: recession fears, regulatory hurdles, and supply chain and labor constraints — which CEO Dave Calhoun expects to last at least through 2023 . Boeing management is also likely to provide more detail about the certification outlook for its 737 Max 10, the largest in the family, and an update on the FAA's blessing of the 787 Dreamliner, which has been grounded for much of the past two years, hindering cash generation." What history shows: Boeing has beaten earnings expectations 72% of the time, but the stock only averages a gain of 0.5% on days the reports come out, according to Bespoke. Qualcomm is slated to report after the bell, with a conference call set for 4:45 p.m. ET. Last quarter: QCOM reported a 41% year-over-year surge in revenue driven by Android phone chip sales . This quarter: Analysts expect a strong quarter from the chipmaker, with earnings and revenue forecast to have grown sharply, according to Refinitiv. What CNBC tech reporter Kif Leswing is watching: "Smartphone demand is slowing around the world, and Qualcomm is exposed as the primary processor and modem maker for most high-end devices. If smartphone shipments decline over 7% in 2022, as Gartner forecasts, then Qualcomm could get hit hard even if it continues to take market share from less-expensive rivals. Management commentary on this topic will be closely watched. Also of interest to investors are questions about whether Qualcomm could continue to supply 5G modems for Apple iPhones through 2023 and 2024 — which would provide upside that the company hasn't included in previous forecasts." What history shows: Qualcomm shares average a 0.8% gain on earnings days, according to Bespoke. The chipmaker has also beaten earnings per share estimates 77% of the time. Ford is scheduled to post its latest quarterly results after the close. Management is expected to hold a call at 5 p.m. ET. Last quarter: F's net profit was dragged lower by the company's Rivian stake . However, the automaker maintained its 2022 guidance. This quarter: Ford earnings are expected to more than triple from the year-earlier period, Refinitiv data shows. What CNBC electric vehicles reporter John Rosevear is watching: "Ford is in the midst of a massive strategic realignment, separating its internal-combustion and electric vehicle businesses and investing billions to build out the latter. Last week, Ford gave investors a big update on its progress in securing the batteries and raw materials it will need to hit its ambitious EV production targets. That update was welcome, but what else is going on under Ford's hood? CFO John Lawler said in March that Ford plans to make $3 billion in cost cuts on the internal-combustion side of the business as part of this big realignment. I'll be listening closely to what Lawler and CEO Jim Farley say about the progress of that effort." What history shows: Bespoke data shows Ford beats analyst earnings expectations 70% of the time. However, the stock averages a loss of 0.4% on the back of its quarterly earnings reports. Meta is set to report earnings after the close, followed by a conference call at 5 p.m. ET. Last quarter: META posted a better-than-expected profit, boosted by average revenue per user that also beat analyst forecasts . This quarter: Facebook's parent company is expected to see earnings per share decline sharply from the year-earlier period, according to Refinitiv. What CNBC social media reporter Jonathan Vanian is watching: "After Snap's recent brutal earnings report, in which the social media business missed Wall Street expectations, all eyes will be on Meta to see if it will suffer the same fate. Like Snap, Meta's core business is based on online advertising — a precarious market considering that a possible recession could lead to companies and brands cutting back on their digital ad campaigns. Meta has the benefit of being a much bigger company than Snap, and its online ad business is second only to Google-parent Alphabet. If Meta experiences a hit in revenue, it likely won't be as significant as Snap. The problem, however, is that investors want to see signs that Meta's online ad business is recovering after several quarters of slowing growth. It's unclear whether the company's second quarter will be the one that eases the minds of anxious Meta investors." What history shows: Facebook's parent company has experienced volatile swings after its last two earnings releases, including a 17% surge after its first-quarter numbers came out. Thursday Amazon is set to report earnings after the bell, with management slated to hold a conference call at 5:30 p.m. ET. Last quarter: AMZN issued a bleak forecast and posted its slowest revenue growth since 2001 . This quarter: The e-commerce giant's earnings are expected to have fallen sharply year over year, according to Refinitiv. What CNBC tech reporter Annie Palmer is watching: "High costs and slowing e-commerce sales led to dour first-quarter earnings for Amazon in April. The company warned more trouble was on the way in the second quarter when it issued a revenue forecast that trailed analysts' estimates. Investors will be watching to see whether that prediction came true, and how the company is navigating macro pressures from ongoing supply chain issues, inflation and slower consumer discretionary spending. Another focus will be any commentary around Amazon's overexpansion issues. Last quarter, the company acknowledged that the pandemic boom had caught up to it, leaving it with too many workers and too much warehouse capacity. Analysts will be looking to see if Amazon expects those costs to fade soon." What history shows: Amazon shares average a gain of 0.8% after the e-commerce giant reports earnings, Bespoke data shows. Intel is slated to post earnings after the close. Company leadership is scheduled to hold a conference call at 5 p.m. ET. Last quarter: INTC offered disappointing guidance, which offset better-than-expected earnings . This quarter: Analysts expect Intel's earnings to have dropped by nearly half from the year-earlier period, Refinitiv data shows. What CNBC tech reporter Kif Leswing is watching: "The entire semiconductor industry is going sideways and valuations dropped over the last quarter as downturn worries have been fueled by electronics makers warning of decreased demand and chip stockpiles. Intel is in a precarious position during this time, as it shifts its business model to become a foundry for other companies in addition to making its own chips. It still faces challenges catching up to TSMC and Samsung in manufacturing, and it faces increasing competition from AMD and ARM-based processors in the datacenter. Expect Intel CEO Pat Gelsinger to continue to beat the drum for the CHIPS Act and give commentary on how it might help the company build a $100 billion factory in Ohio." What history shows: Intel shares tend to struggle on earnings days, falling by an average of 1.1% after the company reports, according to Bespoke. Apple is set to report earnings after the bell. Management is slated to hold a conference call at 5 p.m. ET. Last quarter: AAPL warned of a possible $8 billion hit due to supply chain constraints . This quarter: Refinitiv data shows analysts expect a double-digit earnings per share decline from a year ago. What CNBC tech reporter Kif Leswing is watching: "The biggest story during the June quarter was how Apple handled China Covid lockdowns. Apple expects a $4 billion to $8 billion headwind from supply issues because many factories were closed or limited but some analysts believe that Apple might come in at the low end of that range because of its skill at operations and network of suppliers. A bigger challenge for Apple would be if demand is starting to slow for its products because of economic conditions like inflation and weakened consumer spending. In the first quarter, Apple assured that it was more focused on supply issues than demand issues. If that changes, it could be a major signal for the rest of the market." What history shows: Apple has outperformed earnings estimates by a whopping 89% of the time, according to Bespoke, with the stock averaging a gain of 1.2% on earnings days. Friday Procter & Gamble will report earnings before the bell, followed by a conference call at 9 a.m. ET. Last quarter: PG's earnings and revenue beat analyst expectations thanks to higher prices . This quarter: Procter & Gamble is expected to report strong single-digit earnings growth, Refinitiv data shows. What CNBC is watching: Investors will be watching to see how well the company is faring, especially given how much inflation rose in the second quarter. JPMorgan analysts led by Andrea Teixeira said in a note last week that they expect P & G, among other companies in the space, to issue cautious outlooks for their upcoming fiscal years. "We believe management will be conservative based on most recent management commentary. We decided to also lower our FY23 estimates due to "upstream" labor and energy cost inflation impacting suppliers," they said. What history shows: Procter's earnings top analyst expectations 86% of the time, according to Bespoke. Exxon Mobil will report in the premarket, with management slated to hold a call at 9:30 a.m. ET. Last quarter: XOM reported quarterly earnings growth despite a $3.4 billion hit from a Russia-related charge . This quarter: Exxon earnings are expected to have more than tripled in the quarter, with revenue surging by nearly 100%, according to Refinitiv. What CNBC energy reporter Pippa Stevens is watching: "Exxon shares have come under pressure over the last month, alongside the broader S & P 500 energy sector, as oil prices have fallen back below $100 a barrel. One thing that analysts will be watching for in Exxon's report is the company's refining margins, and the extent to which Exxon benefitted from a surge in petroleum-product prices." What history shows: Exxon typically struggles on earnings days, averaging a loss of 0.8%, according to Bespoke. Chevron is set to post earnings before the open, followed by a conference all at 11 a.m. ET. Last quarter: CVX saw its profits quadruple thanks to higher oil and gas prices . This quarter: Analysts expect Chevron's revenue to have surged by more than 50% in the quarter, while the energy giant's bottom line is forecast to have nearly tripled, according to Refinitiv. What CNBC energy reporter Pippa Stevens is watching: "Chevron shares have been under pressure in the last month amid a decline in oil prices. Still, prices are well above where they started the year, and that's expected to show up in company's earnings. Investors will also be watching for commitment to keep spending down, with management prioritizing shareholder returns through buybacks and dividends." What history shows: Bespoke data shows Chevron only beats earnings expectations 59% of the time, while the stock averages a decline of 0.48% on earnings days.