EC What Will Q1 2021 Earnings Season Show?

Regular readers of our earnings commentary know that we started seeing a positive shift in the overall earnings picture in July last year. This improving trend in estimate revisions remained in place over the following months and actually accelerated over the last few months, as the chart below highlighting the evolution of 2021 Q1 earnings growth estimates shows.

As the chart above shows, the expectation is for total S&P 500 earnings to increase +18.5% in Q1 from the same period last year on +5.3% higher revenues. Today’s +19.4% earnings growth rate is up from +18.5% last week.

Part of the strong growth in Q1 is reflective of easy comparisons, as the last month of 2020 Q1 was weighed down by the pandemic, though the full impact showed up in Q2. Those easy comparisons are notable for the Finance, Consumer Discretionary, Transportation, and Energy sectors.

The Q1 earnings season will really get going when the big banks come out with results on March 14th. The wide majority of companies have fiscal quarters that correspond with the calendar quarters, which is March 31st for Q1.

But there are almost two dozen S&P 500 members that have fiscal quarters that ended in February and 8 such companies, including FedEx (FDX - Free Report), Nike (NKE - Free Report), Costco (COST - Free Report), and others have reported their fiscal February-ending quarterly results. We and other data aggregators club the results from these 8 index members as part of the 2021 Q1 tally.

We have another 4 S&P 500 members on deck to report fiscal February-quarter results this week, including Adobe (ADBE - Free Report) and General Mills (GIS - Free Report). Also reporting February-quarter results this week, but not part of the S&P 500 index, is GameStop (GME - Free Report), which has been in the news lately for reasons other than its core business

Looked at this way, we will have counted almost two dozen such Q4 results before JPMorgan (JPM - Free Report) reports its quarterly results on April 14th.

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William K. 4 weeks ago Member's comment

My prediction is that some will win big time, some will do OK, and some will lose their shirts. Who will do which is not so very clear right now.