Earnings playbook: Netflix and Tesla are set to report this week as reporting season ramps up

Published Sun, Jul 16 20237:15 AM EDT

The earnings season kicks into high gear this week as investors seek more clues on how well corporate America is doing. Fifty-four S & P 500 companies are slated to report, including Tesla and Netflix. American and United Airlines are also on deck. Big banks JPMorgan Chase, Wells Fargo and Citigroup got the ball rolling last week, posting better-than-expected earnings. JPMorgan rose on the back of its results, but Wells and Citigroup ended Friday's session lower. Roughly 30 S & P 500 names have reported thus far, with 80% of them exceeding analyst expectations, according to FactSet. Take a look at some of the key companies scheduled to post their latest numbers, and what to expect from them. Tuesday Bank of America is set to report earnings before the bell, followed by a call at 8:30 a.m. ET. Last quarter: BAC posted better-than-expected results thanks to higher rates . This quarter: Analysts polled by Refinitiv expect the banking giant's profit rose double digits in the second quarter. What CNBC is watching: Bank of America earlier this month raised its dividend by 2 cents to 24 cents per share. Citi analyst Keith Horowitz noted that the company has one of the best core deposit franchises in the business, "but there is less flexibility on the asset side due to large HTM portfolio, so we believe NII trends will lag larger peers (JPM and WFC)." The analyst has a neutral rating on Bank of America shares. What history shows: Bank of America beats earnings expectations 78% of the time, according to Bespoke. In fact, the bank's earnings have come in below estimates just twice since the second half of 2015. However, the stock averages a 0.8% decline on earnings days. Morgan Stanley is set to report earnings in the premarket, with a conference call slated for 9:30 a.m. ET. Last quarter: MS topped analyst expectations on strong bond revenue . This quarter: Analysts expect profits fell more than 15% year over year, per Refinitiv. What CNBC is watching: Morgan Stanley's results could be downbeat as the bank deals with weakness in investment banking, muted trading revenue and cost cuts. BofA's Ebrahim Poonawala also noted that Morgan Stanley's "ROTCE resiliency to be tested in face of revenue headwinds, regulatory changes." What history shows: The company's earnings per share beat estimates 77% of the time, per Bespoke, and the stock averages a 0.9% gain on earnings day. Morgan Stanley shares rose in the last two earnings days. Wednesday Goldman Sachs is set to report earnings before the market opens, followed by a call at 9:30 a.m. ET. Last quarter: GS revenue came up short of estimates after the bank took a $470 million hit on Marcus loans . This quarter: Analysts expect a sharp year-over-year drop in Goldman earnings, according to Refinitiv. What CNBC is watching: Like rival Morgan Stanley, Goldman could be plagued by weakness in investment banking and soft trading revenue. What history shows: Goldman beats earnings estimates a whopping 86% of the time, according to Bespoke. However, the stock struggles on earnings day, losing an average of 0.1%. Over the last two earnings days, the stock has fallen more than 1%. United Airlines is set to report earnings after the bell, with a conference call slated for the following day. Last quarter: UAL posted a net loss but guided for a profit in the second quarter . This quarter: Analysts polled by Refinitiv expect the airline's earnings to more than double. What CNBC airlines reporter Leslie Josephs is watching: "Despite strong demand and lower fuel prices, United had a rough end to the second quarter and start to the third after the Northeast was slammed day after day by thunderstorms, forcing hundreds of cancellations and thousands of delays with the airline's Newark hub particularly hard-hit. Executives will detail the financial impact and expand on CEO Scott Kirby's recent announcements that the company will have to trim its schedule at the congested Newark airport. Still, travel demand has remained strong, and international trips, one of United's strengths, have been particularly robust. United will also give an update on outstanding labor contracts, including recent progress for a potential deal with pilots." What history shows: United earnings beat expectations 69% of the time, Bespoke Investment Group data shows. However, the company's bottom line has missed estimates six of the last 12 earnings days, according to FactSet. Tesla is set to report earnings after the close, with a call slated for 5:30 p.m. ET. Last quarter: TSLA net income dropped more than 20% year over year. This quarter: Analysts on average forecast high single-digit earnings growth for the electric car maker, per Refinitiv. What CNBC is watching: Tesla shares have been on fire this year, more than doubling in value. That said, some analysts are worried that the company's price cuts will hurt margins. Last month, Goldman downgraded the EV maker , citing a difficult pricing environment for electric vehicles. What history shows: FactSet data shows Tesla has beaten analyst expectations 11 of the last 12 earnings days. The stock also averages a 1.27% gain on earnings day, per Bespoke. IBM is set to report earnings after the bell. Management is slated to hold a call at 5 p.m. ET. Last quarter: IBM earnings exceeded estimates as margins grew . This quarter: Analysts see flat year-over-year revenue and a double-digit drop in earnings, according to Refinitiv. What CNBC is watching: Bernstein's Toni Sacconaghi said key issues for IBM ahead of its second-quarter report include the health of its consulting business, the state of IT spending, "incremental detail about IBM's offerings and progress in AI; and further details around the Apptio acquisition." What history shows: Bespoke data shows IBM shares fall 0.64% on average on earnings day despite the company beating estimates 83% of the time. Netflix is set to report earnings following the close, with a call expected at 6 p.m. ET. Last quarter: NFLX posted mixed results and delayed its password-sharing crackdown . This quarter: Netflix is expected to report a decline in year-over-year earnings, Refinitiv data shows. What CNBC is watching: Netflix started cracking down on password sharing during the second quarter, leading to an uptick in subscribers. Investors will look for clues on whether the streaming giant can continue growing its subscriber base. What history shows: Netflix earnings have exceeded earnings expectations in seven of the last 10 quarters, FactSet data shows. Thursday American Airlines is set to report earnings before the bell, followed by a call at 8:30 a.m. ET. Last quarter: AAL eked out a profit as the airline ramped up flying . This quarter: American's earnings are expected to have doubled year over year, according to Refinitiv. What CNBC' airlines reporter Leslie Josephs is watching: "American continues to enjoy strong travel demand and lower fuel prices but executives will also face questions about the future in the Northeast U.S. JetBlue last week said it would walk away from the carriers' Northeast Alliance, which allows the carriers to coordinate schedules and share revenue, after a federal judge ruled the partnership is anticompetitive and that the carriers must dismantle it. American says it will appeal the ruling, but JetBlue won't, focusing instead on its plan to buy budget carrier Spirit. The airline will also likely update investors on labor negotiations with pilots and flight attendants, and its forecast for demand beyond the peak summer travel season." What history shows: American Airlines beats earnings expectations 89% of the time, according to Bespoke. However, the stock averages a 0.2% decline on earnings day.