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Earnings playbook: How to trade a busy week of reports from companies including Microsoft and Meta

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Big Tech takes center stage in what could be a make-or-break week for S & P 500 earnings. About 150 S & P 500 companies are slated to report, including Microsoft, Meta Platforms, Amazon and Alphabet. Those results come during a tough time for Wall Street, as higher rates and conflict in the Middle East rattle investor sentiment. The earnings season has been a mixed bag thus far, but pretty positive. Of the more than 80 S & P 500 names that have reported, about 73% have beaten expectations, according to FactSet. Take a look at CNBC Pro’s breakdown of what’s expected from each of these key reports. Tuesday General Motors is set to report earnings before the bell, followed by a call at 8:30 a.m. ET. Last quarter: GM raised its full-year outlook and ramped up cost cuts . This quarter: Analysts polled by LSEG expect earnings fell by double digits from the year-earlier period. What CNBC automotive reported Michael Wayland is watching: “While Wall Street will take note of GM’s third-quarter results, they’ll be more interested in any updates regarding ongoing labor strikes and negotiations involving the United Auto Workers union. GM said the strike, now in its sixth week, was responsible for roughly $200 million in lost production during the third quarter, largely due to a work stoppage at its midsize pickup truck plant in Missouri. The automaker also is expected to give more insight into how the negotiations as well as slower-than-expected demand for electric vehicles may influence previously announced multibillion investments in EVs.” What history shows: Data from Bespoke Investment Group shows GM beats earnings expectations 86% of the time. However, the stock only averages a 0.1% gain on earnings days. Coca-Cola is set to report earnings in the premarket, with a call slated for 8:30 .am. ET. Last quarter: KO beat analyst earnings estimates and increased its guidance for the full year. This quarter: The beverage giant’s earnings and revenue are expected to be about flat on a year-over-year basis, according to LSEG. What CNBC is watching: Results aside, investors will look for clues from management on what they are seeing in terms of GLP-1 drugs and their impact on demand for Coca-Cola products. Currency impact will also be watched by investors, as a chunk of Coca-Cola’s sales come from outside the U.S. The stock has struggled this year, losing 14.2%, but JPMorgan analyst Andrea Teixeira still likes it. “We continue to believe that KO remains attractive on a relative basis within our coverage universe given the sustained top-line momentum with better shot at volume growth within large caps and P & L flexibility to continue to deliver on guidance, even with a strengthening USD,” the analyst said in a note last week. What history shows: Coca-Cola has beaten earnings expectations for 14 straight quarters, according to FactSet. To be sure, shares have fallen in two of the last three earnings days. Microsoft is set to report earnings after the bell. Leadership is slated to hold a call at 5:30 p.m. ET. Last quarter: MSFT issued disappointing revenue guidance that overshadowed better-than-expected results for the fiscal fourth quarter. This quarter: Analysts expect Microsoft earnings grew by more than 10% year over year, LSEG data shows. What CNBC tech reporter Jordan Novet is watching: “Microsoft investors will be eager to see how much revenue growth will come from artificial intelligence-related cloud-computing spend in the fourth quarter when management issues guidance. They’ll also parse comments from executives to figure out if clients have largely finished trying to make their existing cloud workloads more efficient. The company starts selling its Microsoft 365 Copilot subscriptions for AI capabilities in its productivity applications on Nov. 1, so guidance that implies accelerating growth in the segment that contains Office would be notable. And Microsoft closed its $68.7 billion Activision Blizzard acquisition on Oct. 13, so investors will focus on how the game publisher’s revenue will be incorporated into its parent company’s finances.” What history shows: Bespoke data shows Microsoft beats earnings estimates 80% of the time. However, the stock was volatile after the last two reports were released. Alphabet is set to report earnings after the bell, with a call slated for 4:30 p.m. ET. Last quarter: GOOGL posted earnings that exceeded analyst expectations thanks to strong growth in cloud . This quarter: The tech giant’s earnings are expected to have grown sharply from the year-earlier period, LSEG data shows. What CNBC is watching: The Google parent is riding high heading into next week’s report, with a 53% gain for 2023. Investors will look for clues on whether the tech giant can maintain its AI-driven momentum heading into year-end. What history shows: Despite a 68% earnings beat, per Bespoke, the tech giant’s stock has fallen in three of the last four earnings days. Wednesday Boeing is set to report earnings in the premarket, with leadership scheduled to hold a call at 10:30 a.m. ET. Last quarter: BA said aircraft deliveries gave it a cash boost, but the company still posted a loss for the second quarter . This quarter: The aircraft maker’s revenue is expected to have risen by more than 10% from the year-earlier period, according to LSEG. What CNBC is watching: Boeing comes into its third-quarter report day struggling. The stock has fallen nearly 10% over the past month. Earlier in October, the company said it was broadening inspections for a 737 Max production defect. Bottom line: Boeing will need a strong report to stem further losses. What history shows: Boeing shares have posted gains after the last three earnings releases, including an 8.7% rally following the company’s second-quarter report. Meta Platforms is set to report earnings after the close. Management is expected to hold a call at 5 p.m. ET. Last quarter: META gave upbeat third-quarter guidance and posted better-than-expected earnings . This quarter: The social media giant’s earnings are expected to have more than doubled year over year, per LSEG. What CNBC is watching: There’s a high bar set for Meta heading into its third-quarter report, with many on the Street expecting strong results and positive forward guidance. “With street cautious on expense/capex guide, key driver for stock will be 4Q revenue guidance, and we expect a strong 4Q vs sector as Meta can benefit from: 1) eCommerce ad acceleration (easy comps & China driven ad competition), 2) Ramping Reels and messaging monetization, and 3) Growing AI/ML capabilities,” Bank of America analyst Justin Post wrote in a note. What history shows: Meta consistently tops analyst earnings expectations, with an 87% beat rate, per Bespoke. The stock also averages a 2% gain on earnings days. IBM is set to report earnings after the bell, with a call slated for 5 p.m. ET. Last quarter: IBM earnings beat estimates, but revenue came up short . This quarter: The legacy tech company is expected to report slight year-over-year revenue growth, according to LSEG. What CNBC tech reporter Jordan Novet is watching: ” IBM’s peers in consulting have flagged challenging business conditions in recent months. That climate might inhibit growth in IBM’s consulting unit, which represents almost one-third of total revenue. But the company’s software division might see gains from Apptio, a seller of tools for managing cloud costs that IBM bought in August. Investors will focus on changes to IBM’s full-year guidance, which calls for $10.5 billion in free cash flow.” What history shows: Bespoke data shows IBM beats earnings estimate 83% of the time. And while the stock averages a 0.6% loss on earnings days, it has risen after two of the last three reports. Thursday Merck is set to report earnings in the premarket, with a call slated for 9 a.m. ET. Last quarter: MRK got a revenue boost from Keytruda, but the Prometheus deal led to a quarterly loss . This quarter: The company is forecast to report slight year-over-year earnings and revenue growth, LSEG data shows. What CNBC is watching: Merck shares have struggled recently, losing more than 3% over the past month. That said, Goldman Sachs analyst Chris Shibutani reiterated a buy rating on the pharmaceutical giant ahead of the report. “Our stance [is] buttressed by the consistency with which the company has been executing,” he said. “Keytruda and Gardasil are genuine embodiments of the overused franchise moniker. Management has been consistent in messaging that the exceptionally robust growth that Keytruda delivered in 2022 was not a pace that should be expected to be sustainable.” What history shows: Merck’s stock have fallen in two of the last three earnings days. Ford Motor is set to report earnings after the bell, followed by a conference call at 5 p.m. ET. Last quarter: F reported solid earnings and revenue and raised its full-year outlook . This quarter: The automaker’s earnings are expected to have grown by around 50% from the year-earlier period, according to LSEG. What CNBC automotive reporter Michael Wayland is watching: “Ford is largely in the same boat as its crosstown rival GM regarding third-quarter earnings, however with less profits. While the results will be noted by Wall Street, the main concern is the UAW strike and negotiations. That includes the impact of the talks to the automaker’s near-term earnings as well as long-term plans for investments in EVs. UAW negotiations are particularly important for Ford, as it has 57,000 U.S. union workers — the most of any Detroit automaker.” What history shows: Despite Ford beating earnings estimates nearly 70% of the time, per Bespoke, the company’s stock has fallen after the last three reports were posted. Amazon is set to report after the close. Leadership is expected to hold a call at 5:30 p.m. ET. Last quarter: AMZN reported blowout earnings and issued optimistic guidance. This quarter: The e-commerce giant is expected to report earnings per share growth of more than 100%, according to LSEG. What CNBC is watching: Amazon shares are riding high this year, rallying more than 50%. Expectations for the company heading into its third-quarter report are also high, though investors will look to see if the company can maintain this momentum given a worsening macro outlook. “The consumer has proven resilient overall, but we recognize growing concerns around spending & confidence, particularly w/some recent retail earnings reports suggesting softness at the low-end & trade-down into more value-based products,” JPMorgan analyst Doug Anmuth wrote. What history shows: Amazon beats earnings expectations 63% of the time, according to Bespoke. however, the stock has fallen in three of the last four earnings days. — CNBC’s Michael Bloom contributed reporting.

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