The first-quarter 2022 earnings season will gather pace this week as more than 250 companies are slated to report their quarterly numbers. Earnings results of corporate America are likely to return to normalcy after last year’s astonishing growth. Earnings results of 2021 were favorably impacted in comparison to the pandemic-led lockdowns in 2020.
This week, five U.S. corporate behemoths are likely to beat earnings estimates. Investment in these stocks should bear fruit in the near term. These are
Netflix Inc.
NFLX
,
Tesla Inc.
TSLA
,
Dow Inc.
DOW
,
Freeport-McMoRan Inc.
FCX
and
Newmont Corp.
NEM
.
Q1 Earnings Results at Early Stage
As of Apr 14, 35 S&P 500 companies reported earnings results. Year over year, the total earnings of these companies were down 17.6% on 8.8% higher revenues. Moreover, 80% of these companies beat both earnings and revenue estimates. For the first quarter as a whole, total earnings of the S&P 500 Index are expected to be up 4.3% year over year on 10% higher revenues.
Our Choice
Five U.S. corporate giants will report first-quarter 2022 earnings results this week. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 3 (Hold) and has a positive
Earnings ESP
. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Our research shows that for stocks with the combination of a Zacks Rank #3 or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
The chart below shows the price performance of above-mentioned five stocks in the last quarter.
Image Source: Zacks Investment Research
Netflix
is expected to dominate the streaming space, courtesy of its diversified content portfolio. This is primarily attributable to heavy investments in the production and distribution of localized and foreign-language content.
NFLX’s efforts to attract viewers through investing in more regional programming have added significantly to its user base. Moreover, partnerships with major telcos across the world are expected to enhance the subscriber base of Netflix in international markets.
NFLX has an Earnings ESP of +0.91%. The company recorded earnings surprises in three out of the last four reported quarters, with an average beat of 26.7%. The Zacks Rank #3 Netflix is set to release
earnings results
on Apr 19, after the closing bell.
Tesla
has acquired a substantial market share within the electric car segment. Increasing Model 3 delivery, which forms a significant chunk of TSLA’s overall deliveries, is aiding its top line. Along with Model 3, Model Y is contributing to its revenues. The global auto industry is gradually moving toward electric vehicles. Tesla is expected to be the largest beneficiary of this trend.
Despite the chip crisis, Tesla reported record deliveries of 310,048 units for first-quarter 2022. Additionally, TSLA’s energy generation and storage revenues are growing, thanks to the positive reception of Megapack and Powerwall products.
Tesla has an Earnings ESP of +10.21%. It has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings improved 3.6% over the last 30 days.
TSLA recorded earnings surprises in the last four reported quarters, with an average beat of 33.3%. The Zacks Rank #3 company is set to release
earnings results
on Apr 20, after the closing bell.
Dow
should gain from cost synergy savings and productivity initiatives. Dow is focused on maintaining cost and operational discipline through cost synergy and stranded cost-removal initiatives. Actions to reduce operating costs are expected to support DOW earnings in 2022.
Dow’s restructuring program is also expected to deliver margin benefits. Investment in high-return projects should also be accretive to its earnings. Management is investing in several high-return growth projects including expanding downstream silicones capacity.
Dow has an Earnings ESP of +5.45%. The Zacks Consensus Estimate for current-year earnings improved 7.8% over the last 30 days. DOW recorded earnings surprises in the last four reported quarters, with an average beat of 11.1%. The Zacks Rank #1 company is set to release
earnings results
on Apr 21, before the opening bell.
Freeport-McMoRan
is conducting exploration activities near existing mines to expand reserves. FCX is expected to gain from the progress in exploration activities that will boost production capacity. Freeport’s Lone Star project provides additional upside.
FCX is also well-positioned to benefit from automotive electrification, which is positive for copper as electrical vehicles are copper intensive. Higher copper prices are also expected to support its margins. Freeport’s efforts to reduce debt is also encouraging.
Freeport has an Earnings ESP of +5.07%. It has an expected earnings growth rate of 23.3% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.8% over the last 30 days.
FCX recorded earnings surprises in three out of the last four reported quarters, with an average beat of 4.6%. The Zacks Rank #3 company is set to release
earnings results
on Apr 21, before the opening bell.
Newmont
is making notable progress with its growth projects. NEM is likely to gain from a number of projects including the Tanami expansion, Yanacocha Sulfides and Ahafo north. The merger with Goldcorp is expected to be value-accretive to Newmont’s cash flow and generate significant synergies. NEM remains focused on improving operational efficiency.
Newmont has an Earnings ESP of +8.37%. It has an expected earnings growth rate of 15.5% for the current year. The Zacks Consensus Estimate for current-year earnings improved 0.6% over the last 7 days. The Zacks Rank #3 company is set to release
earnings results
on Apr 22, before the opening bell.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar
.
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