Big Banks Kick Off 2024 Q3 Earnings Season with Promising Results
The 2024 Q3 earnings season is gaining momentum as major banking institutions released their results last Friday. Despite recent downward adjustments, the period appears positive, with earnings growth expected to return to a favorable trend.
Stay informed on all quarterly releases: See Zacks Earnings Calendar.
This week, let’s examine three noteworthy companies – Taiwan Semiconductor Manufacturing (TSM), Netflix (NFLX), and American Express (AXP) – as they prepare to announce their earnings.
TSM Thrives Amid AI Demand
Taiwan Semiconductor, currently rated Zacks Rank #2 (Buy), has seen positive adjustments to its earnings forecasts following robust quarterly performance and strong demand. The company’s stock has surged 80% year-to-date, significantly outperforming the market.
For the upcoming quarter, analysts expect a growth spurt, with the Zacks Consensus EPS estimate rising nearly 7% to $1.74 since mid-July. This suggests a solid 35% increase compared to last year. Revenue predictions also follow suit, projecting sales of $22.7 billion, a 31% jump from the same timeframe in 2023.
Demand for TSM’s products is significantly driven by the surge in artificial intelligence, which underscores its central role in chip manufacturing.
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In a positive forecast for Q3 following Q2 results, TSM stated, ‘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 Focus on Subscriber Growth
Subscriber metrics will be crucial in Netflix’s upcoming earnings report. Notably, the company will discontinue reporting quarterly membership figures starting Q1 2025. Currently holding a favorable Zacks Rank #2 (Buy), Netflix’s revisions for the forthcoming quarter remain stable since mid-July.
The consensus anticipates a remarkable 36% increase in EPS alongside a 14% rise in sales. The introduction of ad-supported membership options and a crackdown on password sharing have significantly boosted the streaming giant’s growth.
Another positive development is margin expansion, leading to increased profitability. Margins reached their lowest point in late 2022 but have dramatically improved since then.
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American Express Posts Record Revenue
American Express (AXP) has seen negative revisions for the upcoming quarter since mid-July, with earnings forecasted at $3.27 per share. However, this estimate has increased from $3.22 per share earlier in August, hinting at some positive momentum.
Despite the overall bearish revision trend, focusing on recent upward adjustments is worthwhile. The company excelled during its latest reporting period, achieving an all-time record of $16.3 billion in quarterly revenue. AXP also added 3.3 million new cards, contributing to strong growth in fee revenues.
AXP’s sales trajectory remains impressive, as illustrated in the chart below.
Image Source: Zacks Investment Research
Conclusion
Earnings season is always an intriguing time for investors, as companies reveal their performances from the previous months. Investors should keep a close eye on the upcoming reports from Taiwan Semiconductor Manufacturing, Netflix, and American Express.
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Netflix, Inc. (NFLX): Free Stock Analysis Report
American Express Company (AXP): Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report
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The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.
