As the first full week of earnings season unfolds, investors are keeping a close eye on several companies set to report their financial results in the coming days. This week began with major banks releasing their earnings reports, setting the tone for what may lie ahead. The spotlight now shifts to companies like United Airlines and Netflix, scheduled to report later this week. However, as earnings season extends into the next week, CNBC has identified certain stocks that could be facing possible earnings “blow-ups.”
Among the companies that have captured the attention of investors is Starbucks. With a staggering 43 downward revisions in earnings estimates in the past three months, the coffee chain’s estimated earnings per share for the current quarter have plummeted more than 16% to 94 cents a share. Analysts have also slashed their price target for Starbucks by 16.5% over the same period. Consequently, the stock has experienced significant pressure, dropping 11.6% in the past three months and more than 21% year-to-date. Starbucks is expected to unveil its fiscal third-quarter results on July 25, adding to the anticipation surrounding its performance.
Southwest Airlines is another company on the radar, having received 28 downward revisions in earnings per share estimates, resulting in a consensus estimate decline of 35.1% in the past three months. With current earnings estimated at 52 cents per share for the just-ended quarter, Southwest Airlines faces mixed performance, with shares up 2.4% in three months but down 0.6% in 2024. The company recently faced pressure from activist investor Elliott Management, signaling potential leadership changes due to lagging performance and growth constraints. Southwest is scheduled to announce its second-quarter results before the market opens on July 25.
Charlotte-based steelmaker Nucor is also in the spotlight after cutting its second-quarter earnings guidance, leading to 21 earnings estimate cuts in the past three months. The company now anticipates earnings of $2.53 per share for the latest quarter, marking a significant 30% decline from previous estimates made in April. Nucor’s shares have dipped approximately 13.5% in the past three months and over 4.5% year-to-date. Using electric arc furnaces to produce new steel from scrap steel, the company faces challenges as it prepares to release its results after the market close on July 22.
Additionally, Old Dominion Freight Line and Intel Corp. have also made the list of companies with potential earnings blow-ups. Old Dominion Freight Line saw 35 downward revisions in earnings per share estimates in the past three months, while Intel Corp. experienced significant declines in EPS estimates over the past three and six months, tumbling 56.5% and 74%, respectively. These companies are closely monitored by investors as they navigate through their upcoming earnings releases, which will shed light on their financial performance and future outlook.
As investors brace themselves for the flurry of earnings reports set to be unveiled in the days ahead, the focus remains on companies that could potentially face earnings challenges. With various factors influencing their financial results, these companies are under the scrutiny of market analysts and investors alike. As the earnings season progresses, the performance of these companies will undoubtedly have a significant impact on their stock prices and market perception.