Originally published at: The week in charts: a US earnings special – InvestEngine Insights
In a week of light economic news, we turn our attention this week to the US earnings season. The third-quarter earnings season has kicked off with 181 of the 500 companies in the S&P having reported earnings thus far.
In terms of earnings growth, 70% of companies that have already reported earnings have beaten expectations with a majority of companies operating in the technology sector followed by the utilities sector.
Whilst we don’t like to comment on the performance of individual companies, it is important to gauge the performance of some of the largest components in the S&P 500 to determine the health of the US consumer and the wider economy.
Tesla
Tesla reported earnings that topped analyst estimates posting a surprise profit of £1.9Bn for the third quarter, sending the stock higher by 20% on the day. Wall Street cheered as Elon Musk reported a 8% rise in third-quarter profits after a rise in revenue to £19.4bn.
Musk also indicated that sales of Tesla electric vehicles could increase by as much as 30% next year as cost-cutting measures allowed it to reduce prices spurring demand.
General Motors
Sticking with the automotive theme, General Motors crushed Wall Street’s estimates and raised full-year guidance.
Having reported revenue of £37.5 billion in revenue and net income of £2.5bn the automaker exceeded analysts expectations. Despite an increase in the share price, GM outlined that electric vehicle sales are one of the main drivers in the financial results, having grown by 60% on a year-over-year basis.
GM noted that the regulatory environment will get tougher as it continues to optimise its internal combustion engine business while working on making its EVs segment profitable.
American Express
Despite consumer spending slowing down in the US, American express has beat earnings expectations reporting third-quarter profits above analyst estimates. Expense management has helped to cushion a blow from softer consumer spending.
As American Express usually carries a more affluent client base, these have allowed the company to maintain smaller provisions for credit losses compared with other peers that serve a broader spectrum of customers.
Boeing
The troubled aerospace giant reported a £4.6Bn loss for the third quarter, taking the top spot for the largest loss since 2020. A series of ongoing labour strikes and company-wide restructures have continued to dampen investor expectations.
The revenue miss comes amid broader challenges, cultural and operational hurdles and the CEO has acknowledged these issues and pledged to transform the company.
Boeing shares remained aground as the firm estimates that strike actions cost approximately £38.5m a day. The ongoing labour unrest and rejected deals continue to be centre stage for the business.
US election
As the US presidential election approaches the finishing straight, we take a look at the latest odds for the race to the White House.
Former president Donald Trump’s chances of winning back the White House are now better than they were before he debated President Joe Biden in June.
On October 1, Harris was ahead on the betting site, according to Polymarket, with a 50% chance of winning to Trump’s 49%. But, she has lost momentum in polling and betting sites in recent weeks.
The betting market also gives Trump better odds of winning the seven battleground states, including, Georgia, Pennsylvania, North Carolina, Arizona, Wisconsin, Michigan and Nevada.
We shall see what the 5th of November brings.
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