The 2024 Q3 earnings season has kicked into a much higher gear with the release of the big banks’ results last Friday. The period looks to be constructive, with earnings growth expected to be positive again despite recent downward revisions that have contrasted with recent periods.
Let’s take a closer look at a few key companies – Taiwan Semiconductor Manufacturing TSM, Netflix NFLX, and American Express AXP – that are on the reporting docket for this week.
TSM Witnessing AI Frenzy
Taiwan Semiconductor, a current Zacks Rank #2 (Buy), has seen its earnings outlook shift bullishly across the board following favorable quarterly results that have reflected rock-solid demand. Shares have benefited accordingly, up 80% year-to-date and widely outperforming.
The outlook for the quarter to be reported remains bullish, with the $1.74 Zacks Consensus EPS estimate up nearly 7% since mid-July and suggesting 35% year-over-year growth. Revenue revisions have followed a similar trajectory, with forecasted sales of $22.7 billion 31% higher than the same period last year.
TSM’s demand has been fueled by the AI frenzy given its outsized role in chip manufacturing, further displayed by the strong forecasted growth rates.
Image Source: Zacks Investment Research
And the company delivered a positive statement for its current period (Q3) following the release of its Q2 results, stating, ‘Moving into third quarter 2024, we expect our business to be supported by strong smartphone and AI-related demand for our leading-edge process technologies.’
Netflix Focuses on Subscriber Growth
As usual, subscriber metrics will be key in the upcoming Netflix release, though it’s critical to note that the company will no longer report quarterly membership numbers starting next year in 2025 Q1. The stock sports a favorable Zacks Rank #2 (Buy), with revisions for the upcoming print largely remaining stable and unchanged since mid-July.
Big growth is expected to be delivered, with our consensus expectations alluding to a 36% pop in EPS on 14% higher sales. Ad-supported membership tiers paired with a password-sharking crackdown have provided considerable benefits for the streaming titan.
A positive development within the company has been margin expansion, leading to higher profits over recent periods. As shown below, margins bottomed in late 2022, reversing course entirely since. Please note that the chart below is on a trailing twelve-month basis.
Image Source: Zacks Investment Research
AXP Achieves Record Sales
Revisions for AXP’s quarter to be reported have overall been bearish since mid-July, with the company expected to post $3.27 per share in earnings. Still, it’s critical to note here that the current $3.27 per share estimate is up from the $3.22 per share expected near the beginning of August.
So, while the overall revisions trend may be negative, putting more weight on the recent positive revisions is more worthwhile.
Image Source: Zacks Investment Research
The company was firing on all cylinders throughout its latest period, with $16.3 billion in quarterly revenue reflecting an all-time record. And it continues to grow its customer base nicely, with new card acquisitions of 3.3 million and double-digit growth in fee revenues also reflecting notable highlights.
AXP’s sales growth has continued to be impressive, as we can see in the quarterly chart below.
Image Source: Zacks Investment Research
Bottom Line
Earnings season is always an exciting time for investors, with companies finally pulling the curtain back and unveiling what’s transpired behind the scenes.
And concerning notable releases coming this week, all three companies above – Taiwan Semiconductor Manufacturing TSM, Netflix NFLX, and American Express AXP – are on the reporting docket.
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