The second-quarter earnings season kicks off this week, with investors getting their first glimpses into the state of corporate America. JPMorgan Chase and Citigroup, as well as Delta Air Lines are slated to post their latest quarterly results. Snack and beverage giant PepsiCo is also on deck. Expectations for this earnings season are downbeat, with analysts forecasting a roughly 7% year-over-year drop, FactSet data shows. That said, recent data points to a resilient economy — even as the Federal Reserve raises rates — and could bode well for companies. Take a look at some of the key companies slated to report, and what to expect from them. Thursday PepsiCo is set to report earnings before the bell, followed by a conference all at 8:15 a.m. ET. Last quarter: PEP reported better-than-expected results and raised its full-year outlook . This quarter: Analysts expect muted year-over-year earnings growth for the beverage and snack giant, per FactSet. What CNBC is watching: PepsiCo’s results can serve as barometer for the health of the consumer, especially as the Federal Reserve continues to raise rates and inflation remains high. Deutsche Bank analyst Steve Powers said in a note last month he expects “another fine quarter for PEP and management should be positioned to at least comfortably reaffirm FY23 guidance of +8% organic growth and $7.27 in dollar-based EPS.” To be sure, he has a hold rating on PepsiCo — which is up only 1.3% year to date. What history shows: Data compiled by Bespoke Investment Group shows PepsiCo beats earnings estimates 78% of the time. In fact, the company’s earnings have exceeded expectations every quarter since early 2019, according to FactSet. The stock also averages a 0.4% gain on earnings day. Delta Air Lines is set to report earnings in the premarket, and management is slated to hold a call at 10 a.m. ET. Last quarter: DAL posted a loss for the first quarter, but issued a positive forecast as the peak travel season approached . This quarter: Analysts polled by FactSet expect a sharp earnings per share surge from the year-earlier period. What CNBC airlines reporter Leslie Josephs is watching: “The travel boom and lower fuel prices helped lift Delta’s second-quarter forecast last month and investors will be looking for more detail on whether it will continue at the current clip. The airline is upbeat on long-term travel demand, but the second-quarter call will be a chance for executives to get more detailed about bookings beyond the peak summer season, especially as many customers return to traditional booking patterns. Executives will also provide a view of corporate bookings, which before the pandemic roiled business travel, usually picked up the slack during off-peak vacation periods.” What history shows: Delta has a strong track record on earnings, exceeding estimates 67% of the time, per Bespoke. The stock also averages a 1.4% gain on earnings day. That said, Delta’s earnings have come in below expectations in three of the last four quarters. Friday JPMorgan Chase is set to report earnings before the market open, followed by a call at 8:30 a.m. ET. Last quarter: JPM reported record revenue thanks to higher interest rates . This quarter: The banking giant is expected to report earnings growth of more than 40% from the year-earlier period, FactSet data shows. What CNBC banking reporter Hugh Son is watching: “As the first to report and the largest U.S. bank by assets, JPMorgan Chase will be key to watch for a read on the industry’s deposit trends, loan losses (especially in commercial real estate and credit cards) and the outlook for slumping Wall Street businesses. The only hitch is that JPM has been outperforming the industry on several metrics lately; will that continue?” What history shows: JPMorgan Chase shares average just a 0.09% gain on earnings day, per Bespoke. That said, the stock rallied more than 7% after the bank posted its first-quarter results on April 14. The banking giant also beats earnings expectations 82% of the time. Wells Fargo is set to report earnings in the premarket. Management is slated to hold a call with analysts at 10 a.m. ET. Last quarter: WFC posted earnings and revenue that beat analyst expectations . This quarter: Analysts expect Wells Fargo to report earnings growth of nearly 60%, according to FactSet. What CNBC banking reporter Hugh Son is watching: “Key for Wells Fargo will be its guidance on net interest income, which has been under pressure as customers have sought yield away from bank accounts. Ironically, the 2018 Federal Reserve asset cap has given this bank an advantage: it couldn’t absorb as much of the Covid-era deposits as rivals did, and so it didn’t bulk up on the low-yielding bonds that caused problems for regional lenders.” What history shows: Wells Fargo only beats earnings expectations 54% of the time, per Bespoke. However, the bank exceeded estimates in eight of the last 10 quarters. Citigroup is set to report earnings before the bell, followed by a conference call at 11 a.m. Last quarter: C shares rose after the bank’s revenue for the first quarter topped estimates . This quarter: Citigroup’s earnings per share are expected to have fallen nearly 40% in the second quarter, per FactSet. What CNBC banking reporter Hugh Son is watching: “Citigroup faces headwinds on both revenue and expenses, which could make for a disappointing quarter. The bank has said investment banking and trading revenue were headed for 20%+ declines, at the same time expenses are climbing because of severance costs.” What history shows: Citigroup has topped earnings expectations in every quarter since mid-2020, per FactSet. The stock has also posted a gain in three of the last four earnings days. — CNBC’s Michael Bloom contributed to this report.
This story originally appeared on CNBC
