Earnings playbook: How to trade results from Disney and these other names ahead

Published Sun, May 7 20237:15 AM EDT

The earnings season may be winding down, but there are still some key companies slated to report. Around 30 S & P 500 stocks are scheduled to post their latest quarterly reports this week, most notably Disney. Investors will look for clues on how the entertainment giant plans to move forward amid its legal issues with the state of Florida. Other companies on deck are Electronic Arts and Occidental Petroleum. More than 80% of the S & P 500 has reported through Friday's close. Of those companies, 78% have beaten analysts' earnings expectations, FactSet data shows. That beat rate is about in line with a three-year average, according to data from The Earnings Scout. Take a look at what to expect from some of the biggest reports. Tuesday Occidental Petroleum is set to report earnings after the bell. The company is slated to hold a call the following day. Last quarter: OXY reported fourth-quarter earnings that missed analysts' expectations. This quarter: Analysts expect a sharp year-over-year earnings decline for the oil company, per Refinitiv. What CNBC is watching: Occidental shares have dropped more than 3% this year amid a decline in oil prices. However, Nitin Kumar of Mizuho is optimistic heading into earnings. "There are several moving pieces in OXY's ops plan for the year, but they are all building toward consistent cash return growth, which we expect to be the focus for investors," he wrote. We also learned on Saturday from Warren Buffett that Berkshire Hathaway is not planning to take full control of the company , knocking down speculation that had boosted the stock. What history shows: Data from Bespoke Investment Group shows Occidental beats earnings expectations 71% of the time. However, the stock averages just a 0.05% gain on earnings day. Shares are also down in eight of the last 10 earnings days. Electronic Arts is set to report earnings after the close, followed by a call at 5 p.m. ET. Last quarter: EA 's fiscal third-quarter earnings beat expectations. However, revenue came in lighter than forecast. This quarter: Analysts polled by Refinitiv expect flat revenue and a slight year-over-year decline for earnings per share. What CNBC is watching: The video game company's shares have lagged the S & P 500 this year, gaining 2.6% in that time. The stock is also coming off two straight losing years. However, Stifel's Drew Crum said a turnaround may be on the horizon. "We're forecasting another down period which would cap a disappointing FY2023 for EA, but assume improving fundamentals (and growth) for FY2024. And with the shares trading at reasonable valuations, in our opinion, remain Buy-rated on EA," he wrote May 1. What history shows: EA has a strong track record of outperforming earnings expectations, with a beat rate of 85%, per Bespoke. The stock also averages a 0.85% gain on earnings day. To be sure, shares dropped more than 9% after the company's fourth-quarter numbers were released. Wednesday Disney is set to report earnings after the bell. Management is slated to hold a call at 4:30 p.m. ET. Last quarter: DIS reported fiscal first-quarter earnings that beat expectations, boosted by streaming subscriber losses that weren't as bad as expected . This quarter: The media giant is expected to report a slight year-over-year revenue advance for the fiscal second quarter, according to Refinitiv. However, Disney's earnings per share are expected to have fallen. What CNBC is watching: Disney shares have rallied more than 15% this year, as the company lays off employees in an effort to reduce costs. However, the company is also dealing with a feud against Florida that has led to Disney suing Gov. Ron DeSantis, alleging the state has embarked on a " relentless campaign to weaponize government power " against it. Investors will be looking for clues on how cost-cutting efforts and the legal battle will affect Disney going forward. What history shows: Bespoke data shows Disney beats expectations 78% of the time. However, Disney shares tend to struggle on earnings day, averaging a slight loss after the company posts results.