Earnings Season Playbook: Q3 2023 Reports To Watch

Just like that, we’re in Q4, which means Q3 2023 earnings season is upon us. Equities have risen most of the year despite corporate profits lingering below their Q4 2021 level (more on that below). However, the last three months have pressured the stock market’s returns for 2023. After a 5.6% dip since July 31, the S&P 500 is currently up 12.8% YTD. 

Despite the recent retreat, the Magnificent Seven stocks still constitute 29% of the S&P 500, their earnings results have the potential to move the broader market substantially. Positive results could lift the entire index, while disappointing figures might drag it down, underscoring their pivotal role in the modern equity environment.

Long-term yields have soared to decade-highs, introducing a fresh risk-free return avenue through Treasuries. This shift isn’t good news for stocks since investors now seek greater returns from the “riskier” equity market. The Utilities Sector has been one of the biggest laggards, as more income-centric or risk-averse investors can now get a 4.8% yield on the 10-year Treasury.

If rates stay higher for longer, borrowing costs will impact corporate profits and drag on earnings. Higher rates also slow down the consumer, who has over $1 trillion in revolving credit. Finally, a strengthening US dollar creates profit headwinds for multinational companies.

“Earnings Season”: the months during which most publicly traded publicly traded companies release quarterly financial results & earnings reports, notably earnings-per-share (EPS) and revenue, usually in January, April, July, and October.

Corporate Profits at the Market Level

Since the March 2020 bottom, equities rallied on strong corporate profits and improving sentiment—until 2022. According to Standard & Poor’s, the composite EPS for all S&P 500 stocks reached an all-time high of 53.94 in Q4 2021.

However, as of Q1 2023, the most recent data available, composite EPS retreated 10.3% from its previous peak. Based on forward estimates, S&P 500 earnings are anticipated to revisit their previous high by Q3 2023.

Stock Earnings Calendar

To keep you organized this earnings season, this calendar below provides scheduled reporting dates for the 50 largest U.S. companies.