Markets are currently experiencing one of the most active weeks for third-quarter earnings, dominated by reports from several major technology companies. As of October 24, approximately 29% of S&P 500 companies have reported their earnings, with analysts anticipating a 9.2% increase in earnings per share (EPS) for the third quarter. If this projected growth is confirmed, it would signify the ninth consecutive quarter of positive earnings growth, albeit a slowdown from the 12% growth reported in the second quarter of this year. Initial expectations were even more conservative, with analysts forecasting a 7.9% increase in EPS prior to this quarter.
A hallmark of this earnings season is the performance of five of the famed “Magnificent Seven” tech companies—Microsoft, Alphabet, Meta, Apple, and Amazon—which collectively represent about a quarter of the S&P 500 index. In addition to these tech giants, other notable companies reporting this week include Boeing, Visa, Starbucks, UnitedHealth Group, Verizon, Mastercard, Chipotle, Merck & Co., Shell, Exxon Mobil, Chevron, Coinbase, Caterpillar, ServiceNow, Anheuser-Busch InBev, and Eli Lilly.
In recent updates:
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Apple reported fourth-quarter earnings that beat both top and bottom-line estimates, though iPhone revenue fell short of analyst expectations, causing the stock to dip around 2% in extended trading. CEO Tim Cook expressed optimism about the company’s upcoming revenue, expecting the December quarter to be its best ever.
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Amazon saw a surge in its stock price by approximately 10% following a strong earnings report, driven largely by a 20% year-on-year increase in revenue from its Amazon Web Services (AWS) division. CEO Andy Jassy attributed this growth in part to advancements in artificial intelligence and announced plans for significant job cuts, clarifying that the layoffs were related to overhiring rather than AI advancements.
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Cigna experienced a steep drop in its stock after warning about margin pressures in its pharmacy benefit management segment, leading to a decline of over 12%. The company reaffirmed its 2025 profit guidance but highlighted the financial challenges faced by partners in government programs.
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Altria reported a decline in cigarette sales, with shares plummeting over 7%. The tobacco giant adjusted its earnings guidance for the fiscal year, reflecting ongoing challenges in the market.
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Crocs saw its stock rise by 7% after announcing plans for substantial cost savings and reporting earnings that exceeded analysts’ expectations, despite a year-on-year revenue decline.
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Eli Lilly significantly raised its annual revenue forecast, bolstered by strong sales of its weight-loss and diabetes medications, resulting in a stock increase of 6%.
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Merck experienced a decline in its stock despite posting earnings that beat estimates, as concerns lingered over the upcoming expiration of key product patents.
Amidst this busy earnings week, companies are navigating various challenges, including inflationary pressures and evolving consumer habits, impacting their financial outlooks and growth strategies. The steady stream of earnings reports continues to shape market sentiment as investors analyze corporate performance and future guidance.
