The earnings slate ramps up in a big way this week. Included in the 784 total companies reporting this week are the five largest stocks in the S&P 500. As shown below, Alphabet (GOOG) will kick things off tomorrow followed by Facebook (FB) and Microsoft (MSFT) on Wednesday and Amazon (AMZN) and Apple (AAPL) Thursday evening.
Our Earnings Explorer tool lets users conduct in-depth analysis of individual companies and how their share prices typically react to quarterly results. Below we highlight the ins and outs of quarterly earnings for the five largest stocks in the S&P 500 — all of which report Q1 results this week.
Below is a snapshot from our Earnings Explorer that shows how Alphabet’s (GOOG) share price has historically performed on its earnings reaction day. For GOOG’s Q1 earnings report specifically, the stock has historically averaged a small one-day gain of 0.30% in reaction to the news with positive returns just 53% of the time. Conversely, GOOG’s best earnings reports have come on its Q3 release where the stock has averaged a one-day gain of 4.62% in reaction to the news. For GOOG, the first quarter has also been the one that the company most often misses sales estimates.
As for Facebook (FB), which reports on Wednesday, historically the stock has beaten EPS estimates 94% of the time and sales estimates 90% of the time. In terms of share price reaction, FB has been a big winner on earnings with an average one-day gain of 2.7%. Looking at Q1 specifically, FB shares have averaged a gain of 3.38% on earnings reaction days with positive returns 57% of the time.
Microsoft (MSFT) heads into Q1 earnings as the largest stock (by market cap) in the S&P 500 and on a bit of a hot streak. As shown in the snapshot below, MSFT has seen gains on seven of its last eight earnings reaction days dating back to April 2018. On Q1 earnings days, MSFT has averaged a full day gain of 1.17% and has closed higher 72% of the time. Q3 is the only other quarter that has seen MSFT average gains on earnings reaction days. The worst quarter for MSFT earnings has historically been Q2 (reported in July). MSFT has averaged a decline of 1.74% on its Q2 earnings reaction days with positive returns only 35% of the time.
Amazon (AMZN) has been notable recently in that it managed to break out to fresh all time highs. With that strength at its back, AMZN heads into what is typically its strongest quarter in terms of share price reaction. Amazon has the highest sales and beat rates in the first quarter, and as a result, the strongest stock price reaction of any quarter. As shown below, AMZN has averaged a full day gain of 4.86% on Q1 earnings days compared to a 1.23% gain for all quarters. It has also been in the green around two-thirds of the time.
Like AMZN, Apple (AAPL) also heads into what has historically been one of its strongest quarters for earnings on a hot streak. The stock has risen on every earnings day of the past five quarters and Q1 earnings has been the second strongest for the stock with an average one-day gain of 2.07%. Additionally, every quarter of the past year has seen Apple report a triple play (EPS beat, sales beat, raised guidance). While nothing is out of the realm of possibilities, given the current environment’s impact on business, it is questionable if the company will keep up that streak of triple plays. For example, today it was reported that there will be delays in the new iPhone’s production. Regardless of whether or not the triple plays streak stays alive, AAPL has been seasonally strong in Q1, consistently beating EPS and sales estimates with the stock price reacting accordingly. Start a two-week free trial to Bespoke Institutional to access our interactive Earnings Explorer and much more.