Earnings playbook: Netflix and Goldman Sachs headline another big week of reports

Published Mon, Jan 16 20236:53 AM EST

It's a shortened week, but there are still several big quarterly earnings reports slated for release. Goldman Sachs and Morgan Stanley are expected to post their fourth-quarter earnings Tuesday, wrapping up the season for big banks. Meanwhile, Netflix reports Thursday, with investors eager to see how the company is faring as it implements its password-sharing crackdown. Roughly 30 S & P 500 companies have reported earnings through last Friday's close, according to FactSet. Of those names, about 80% have posted better-than-expected earnings. Still, FactSet senior earnings analyst John Butters said S & P 500 profits are expected to fall 3.9% year over year. That would be the index's first year-over-year earnings decline since the third quarter of 2020, he said in a note Friday. Check out some of the key companies slated to post results this week, and what investors can expect out of each report. Tuesday Goldman Sachs is set to report earnings before the bell followed by a conference call between management and analysts at 9:30 a.m. ET. Last quarter: Goldman reported earnings and revenue that beat analyst expectations, thanks to strong bond trading revenues . This quarter: Analysts expect the banking giant's profit to drop nearly 50% from the year-earlier period, according to Refinitiv. What CNBC banking reporter Hugh Son is watching: " Investor expectations are muted for Goldman Sachs after precipitous declines in investment banking and mixed trading results seen last week at rivals including JPMorgan Chase. Expect CEO David Solomon to address layoffs and the firm's consumer finance missteps." What history shows: Goldman earnings have beaten expectations 87% of the time, according to Bespoke. However, the stock's post-earnings performance has historically been muted. After its third-quarter numbers were released, Goldman shares closed 0.7% lower. Morgan Stanley is set to report earnings before the open. Company leadership is then set to hold a call at 8:30 a.m.ET. Last quarter: Morgan Stanley missed earnings expectations as investment banking revenue collapsed . This quarter: Analysts polled by Refinitiv expect the company's bottom line to decline by about 40% and its revenue to slide more than 10% on a year-over-year basis. What CNBC banking reporter Hugh Son is watching: "Morgan Stanley's business model will be put to the test this fourth quarter: Did their focus on wealth management insulate them from the steep declines in investment banking seen at rival banks? That's what investors are hoping to see when they report early Tuesday." What history shows: Bespoke data shows the bank's earnings per share beat expectations 78% of the time. The stock also averages a 0.8% gain on earnings day. Morgan Stanley has beaten earnings estimates in eight of the last 10 quarters, FactSet data shows. United Airlines is set to report earnings after the bell. A conference call will be held the following day at 10:30 a.m. ET. Last quarter: The airline posted earnings and revenue that beat expectations and shrugged off recession fears . This quarter: United's revenue is expected to have grown by nearly 50% in the fourth quarter, Refinitiv data shows . What CNBC airlines reporter Leslie Josephs is watching: "Will travel demand continue to make up for airlines' cost increases? So far, it appears they are, and United executives will face questions about how they will manage capacity for the coming year to cater to what has so far been resilient. Now that China is reopening, United will likely outline its flight plans for the year there. United also has hundreds of new jets on order but the aerospace industry is facing staffing and supply shortfalls, so just how quickly the carrier can get those planes - and refresh old ones will be key. Executives will also face questions about labor negotiations with pilots and flight attendants." What history shows: United earnings have beaten expectations 67% of the time, according to Bespoke, but the stock averages a 1% decline on earnings day. The company has beaten earnings expectations in thee of the last five reports, according to FactSet. Thursday Procter & Gamble is set to report earnings in the premarket, followed by a call at 8:30 a.m. ET. Last quarter: The consumer goods giant's earnings beat expectations thanks to higher prices . This quarter: Analysts see single-digit declines for Procter's top and bottom lines, per Refinitiv. What CNBC is watching: Procter is coming off a calendar quarter in which its stock rose 20%, marking its biggest quarterly advance since 1998. The consumer company also outperformed the S & P 500 for 2022, losing just 7.4%. But while Procter's momentum in the U.S. remains strong, sales from other regions may have pressured the company's results in the last quarter, according to UBS. "European scanner data has slowed, with management also noting that China is still a few quarters away from normalization," UBS analyst Peter Grom said in a Friday note. What history shows: Bespoke data shows Procter has a strong track record of outperforming earnings estimates, topping them 85% of the time. The stock is typically muted on earnings days, but it rose nearly 1% after its most-recent report. Netflix is set to report earnings after the close, with a conference call slated for 6 p.m. ET. Last quarter: Netflix added more than 2.4 million subscribers and revealed more details about its crackdown on password sharing . This quarter: Revenue for the streaming giant is expected to rise marginally, but its earnings per share are forecast to fall by more than 60% year over year, according to Refinitiv. What CNBC entertainment reporter Sarah Whitten is watching: "Netflix investors are aware that it will take time for the company's new advertising tier to generate significant revenue for the company, but paired with password sharing changes, there's an expectation that the streamer will see top line growth in the next year. The fourth quarter earnings report out Thursday should see around 4.5 million subscribers, according to data from FactSet. Additionally, this period in the calendar is typically the company's weakest in terms of operating margins due to higher marketing and content spending." What history shows: FactSet data shows Netflix has beaten earnings expectation for the last five quarters. And, while Bespoke data shows the stock averages a 0.17% decline on earnings days, it has rallied after the last two quarterly reports. — CNBC's Michael Bloom contributed reporting.