Investors will be completely focused on the disclosure of corporate earnings during the upcoming Martin Luther King Jr. vacation abbreviated week, especially when it's at a four-decade high. As many companies struggle to source materials and manpower, which is one of the reasons for prices accelerating, there could be both negative and positive surprises ahead for the fourth quarter earnings season.
Given the rotation to appreciate stocks this year, both the commodity and industrial sectors are expected to show strong performance. According to analysts' forecasts, the materials sector is expected to see profits grow by 62% and manufacturing by 52%, while high-growth technology stocks will struggle to outperform amid already high earnings expectations. cyclical stocks are up 9.5% since September, but tech sector earnings estimates are down 1.6%, according to a report on CNBC.com. Below, we've shortlisted three stocks from various sectors that we're watching as the fourth quarter earnings season gets underway:
1. Netflix
Streaming entertainment giant Netflix (NASDAQ:) will announce its quarterly results after market close on Thursday, January 20. Analysts expect $0.8454, an equity gain on sales of $7.71 billion.
Netflix stock has been under pressure since it hit an all-time high on Nov. 11. Investors are concerned that increasing competition and low subscriber growth . To counter a sluggish growth period after posting strong subscriber gains during the pandemic, Netflix increased the price of its monthly subscription packages for the US market last week. $1 increase for the basic plan, which only allows one user at a time, to a $2 increase for the premium service, which offers an ultra-high-definition image and four screens. The company's standard plan now costs $15.49 in the US, up from $1.50. Netflix shares closed at $525.69 on Friday, down about 20% over the past three months.
2. Procter & Gamble
Consumer goods giant Procter & Gamble (NYSE:) is expected to report earnings for the second quarter of 2022 before the market opens on Wednesday, January 19. Consensus expectations are for earnings per share of $1.66 on revenue of $20.34 billion.
The maker of Fluffy Fabric Softener, Puffs Facial Wipes and Luvs Diapers is one of the companies battling higher inflation and supply shortages. The Cincinnati, Ohio-based company told investors in October that it expects $2.3 billion in after-tax costs this fiscal year as a result of higher raw material and freight costs — up from its earlier forecast of $1.9 billion.
P&G shares closed Friday at $159.81, down 2% so far this year. The stock gained about 19% in 2021, benefiting from increased demand for household items during the pandemic. But the rising costs of chemicals, pulp and diesel are hitting margins at a time when a shortage of drivers makes transporting goods more expensive.
3. Schlumberger
With the market showing strength amid rising demand after a pandemic slump, oil and services giant Schlumberger (NYSE:) may report robust Q4 results on Friday, January 21, ahead of the opening.
Analysts expect the Houston-based company to generate $0.39 and equity gains of $6 billion. In a clear sign that the company, investors have pushed Schlumberger shares up about 33% from December's lows. business.
Schlumberger operates in more than 120 countries, providing the oil and gas industry's most comprehensive range of products and services, from exploration to production. Shares closed at $37.81 Friday after rising more than 4% for the day.
