April 8, 2019

Q1 2019 Earnings Season Starts This Week

CNBC – Worst earnings season in about three years could wreck 2019′s rally, Nick Colas warns
It may be an earnings season to forget. DataTrek Research’s Nicholas Colas believes the upcoming round of quarterly numbers will be the most contentious in about three years, and he’s worried they could spark the next stock market downturn. “Right now expectations are for a negative 3.9% comp from last year. That’s the worst comp and the first negative comp since 2Q of ’16,” the firm’s co-founder said Friday on CNBC’s “Trading Nation. ”

Summary

Q1 2019 earnings seasons gets underway this week with Delta and Bed Bath and Beyond reporting. On Friday, many large financials report earnings. Analysts continue to expect a poor quarter.

Comment

Below are the last set of earnings estimates from Wall Street before the official reports start flooding in.

Q1 2019 earnings (green) are expected to fall nearly 4% from last year’s levels. Q2 2019 earnings (orange) are expected to rise just 0.56%. Both of these trends continue their march lower.

An earnings recession is often defined as two consecutive quarters of negative growth. While Q2 growth projections are not yet negative, there is still plenty of time for analysts to lower their estimates.

For the full year, 2019 S&P 500 earnings growth (blue) is expected to grow at just 4.57%. Similar declines can be seen in ex-energy (red), ex-tech (orange) and ex-financial (green) earnings projections.

Company earnings guidance has been falling for nine months and is poised to turn lower for the first time in two years.