14 out of 16 companies deliver EPS wins this week-Earnings Scorecard

Wall Street found it difficult to retain its short-lived bounce back after seeing its worst session in over three months, as investors grew concerned about the state of the U.S. economy. The market, however, pared some losses on Friday, after November’s core PCE report came in cooler than expected.

The Federal Reserve’s favored inflation gauge-core PCE- ticked down in November, and edged up 0.1% M/M, less than the +0.2% consensus.

The Wall Street took one of its worst hits in over three months after the Federal Reserve’s hawkish interest rate cut this week. The Fed on Wednesday delivered a 25 basis point rate cut, which was widely expected, but the central bank’s updated dot plot was what kept the investors on their toes.

The Fed now sees higher inflation and fewer rate cuts in 2025, with Jerome Powell stressing caution going forward.

To add to investors’ worries, a stopgap spending plan backed by President-elect Donald Trump was rejected in the House of Representatives, which fuelled concerns of a government shutdown.

Despite increasing worries regarding the economy, earnings this week painted a rather better picture, with 14 out of 16 S&P 500 companies beating EPS estimates.

Among the eight consumer companies that reported earnings this week, five of them beat estimates for both revenue and EPS. Underscoring the remarkable growth in the cruise sector after COVID-19 nearly capsized the industry, Carnival Corporation (CCL)’s full year 2024 revenues hit an all-time high and profits swelled by 2500% from a loss of $0.06 in 2023 to a profit of $1.44 in 2024.

Another big name in the sector, Nike (NKE) delivered a better-than-feared FQ2 earnings report, leaving investors to bet on early signs of a turnaround under the company’s new CEO. Despite the beat on estimates, Nike’s revenue decreased 8% year-over-year on a reported basis, with declines seen across the North America, Europe Middle East & Africa, and Greater China regions.

Out of the companies in the Industrial sector, parcel delivery giant FedEx (FDX) shone through, surprising investors with the news of the separation of FedEx Freight, the business that handles large cargo. The separation will create two independent publicly listed companies as part of the company’s streamlining efforts.

On the earnings front, FedEx (FDX) disappointed investors with mixed results and a lowered forecast. Revenue fell about 1% to $22B and missed the consensus estimate of $22.15B. Adjusted EPS is now forecast to be around $19.00 and $20.00 per share, vs. the prior forecast of $20.00 to $21.00 per share.

Among the three tech sector companies that reported earnings this week, Accenture (ACN) and Jabil (JBL) cheered investors, with better than expected results and upbeat forecast.

Accenture (ACN)’s first quarter revenue climbed 9% (in U.S. dollar terms) year-on-year to $17.7B, surpassing analysts’ estimates. The company also raised its revenue growth outlook for fiscal 2025.

Micron (MU) on the other hand, despite posting earnings in-line with consensus, disappointed investors as it issued an outlook for the fiscal second-quarter that was well below expectations by a wide margin.

Looking to the next quarter, Micron expects adjusted earnings to be between $1.33 and $1.53 per share, well below the $1.92 per share estimate. Sales are forecast to be between $7.7B and $8.1B, with the midpoint well below the $8.99B estimate.