Earnings Season Update and Analyst Reports for Apple, Bank of America & S&P Global

Thursday, December 14, 2023

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the evolving earnings picture as the early Q4 results come in, in addition to featuring new research reports published by our team analysts today. These include updated research reports on  Apple Inc. (AAPL), Bank of America Corporation (BAC), S&P Global Inc. (SPGI) and a many others. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.

You can see all of today’s research reports here >>>

Earnings Season Update

Adobe became the third S&P 500 company to release quarterly resuls that get counted as part of our 2023 Q4 earnings tally. The Adobe results were for the company's fiscal quarter ending in November, as were the earlier resutls from AutoZone and Oracle.

A number of other bellwethers like Nike and FedEx will similarly be coming out with their respective fiscal November-quarter results, which will get counted as part of the 2023 Q4 earnings season tally. The Q4 reporting cycle will really get going with the JPMorgan results on January 12th, 2024. But we will have seen such early November-quarter results by almost two dozen S&P 500 members by the time JPMorgan reports its results.

For the three S&P 500 members that have reported such Q4 results, total earnings up +16.3% from the same period last year on +6.7% higher revenues, with with two out of the three (66.7% of the total) beating EPS and revenue estimates. This is comparable performance relative to what we had seen from this group of three index members in the preceding period.

Looking at Q3 as a whole, combining the actuals for these three S&P 500 members with estimates for the still-to-come companies, total earnings are expected to decline -0.1% from the same period last year on +2.3% higher revenues. This would follow the +3.5% earnings growth in the preceding period, which came after three back-to-back quarters of earnings declines.

Unlike the last two quarters, estimates for Q4 have been under pressure since the quarter got underway, with the current -0.1% decline down from +5.5% in early October at the strart of the quarter. Estimates were largely stable in the comparable periods of the preceding two quarters. In this respect, the Q4 revisions trend represents a notable shift.

Today's Featured Analyst Reports

Apple shares have performed roughly in-line with the Zacks Tech sector (+44.3% vs. +44.5%) but have handily outperformed the S&P 500 index (up +21.3%). The company is benefiting from strong demand for iPhone. Apple expects the iPhone’s year-over-year revenues to grow on an absolute basis in first-quarter fiscal 2024.

Revenues for Mac are expected to significantly accelerate compared with the fourth-quarter fiscal 2023’s reported figure. It expects the year-over-year revenue growth for both iPad and Wearables, Home and Accessories to decelerate significantly from the September quarter due to a different timing of product launches.

For the Services segment, Apple expects average revenues per week to grow at a similar strong double-digit rate as it did during the September quarter. It is benefiting from increasing customer engagement in the services segment. The expanding content portfolio of Apple TV+ aids subscriber growth.

(You can read the full research report on Apple here >>>)

Shares of Bank of America have gained +4.0% over the past year against the Zacks Banks - Major Regional industry’s gain of +13.2%. Higher interest rates and decent loan demand will keep supporting the company’s net interest income (NII) growth in the upcoming quarters.

Yet, the current tough macroeconomic environment will continue to weigh on the company’s investment banking (IB) business. This, along with the volatile nature of the capital markets, will likely hurt fee income. Due to inflationary pressure, overall costs are expected to remain elevated.

(You can read the full research report on Bank of America here >>>)

S&P Global shares have outperformed the Zacks Business - Information Services industry over the past year (+27.5% vs. +22.4%). The company remains well-poised to gain from the growing demand for business information services. Buyouts help innovate, increase differentiated content and develop new products.

New service launches have been aiding the company's growth. Dividend payments and share buybacks boost investors' confidence and positively impact earnings per share. Increasing current ratio bodes well for the company.

However, S&P Global remains vulnerable to proceedings, investigations and inquiries concerning the ratings provided, leading to legal charges, damages or fines. Growth initiatives, higher compensations and incentives raise the company's expenses. More long-term debt than cash does not bode well for the company.

(You can read the full research report on S&P Global here >>>)

Other noteworthy reports we are featuring today include Workday, Inc. (WDAY), Intercontinental Exchange, Inc. (ICE) and 3M Company (MMM).

Director of Research

Sheraz Mian

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>