Key points
- A more supportive Q3 results season generally for both Europe and the US compared to expectations
- Whilst profit warnings have been coming through, they have not been as plentiful as both we and the market expected
- Results were supported by the outsized growth reported by the Energy sector in both Europe and US, and Utilities in Europe
- The European results season was stronger relative to the US, notably helped by FX tailwinds, with an estimated c.17% positive impact from US$ appreciation vs Euro
- Earnings revisions have inflected at the Global, European and (to a lesser extent) US levels post results season, but in a large part supported by outsized growth in the Energy sector
- Notable profit warnings and/or disappointing guidance during the period came from Amazon, Alphabet, Meta, Target, Tesla, Walt Disney, Warner Bros Discovery, Nike, Nvidia and Microsoft in the US, and Adidas, Volvo, VW, H&M, and Roche in Europe
Strong reporting season, helped by currency tailwinds and outsized growth from Energy and Utilities
Strong growth in Energy (+57% sales, +130% earnings) and Utilities (+48% sales and earnings) helped by higher energy prices
Growth flattered by euro weakness versus US$ – we estimate a c.17% tailwind from US$ alone, on sales and earnings growth during the quarter
Source: Martin Currie and FactSet as at 31 October 2022.
Key points
- A more supportive Q3 results season generally for both Europe and the US compared to expectations
- Whilst profit warnings have been coming through, they have not been as plentiful as both we and the market expected
- Results were supported by the outsized growth reported by the Energy sector in both Europe and US, and Utilities in Europe
- The European results season was stronger relative to the US, notably helped by FX tailwinds, with an estimated c.17% positive impact from US$ appreciation vs Euro
- Earnings revisions have inflected at the Global, European and (to a lesser extent) US levels post results season, but in a large part supported by outsized growth in the Energy sector
- Notable profit warnings and/or disappointing guidance during the period came from Amazon, Alphabet, Meta, Target, Tesla, Walt Disney, Warner Bros Discovery, Nike, Nvidia and Microsoft in the US, and Adidas, Volvo, VW, H&M, and Roche in Europe
Strong reporting season, helped by currency tailwinds and outsized growth from Energy and Utilities
Strong growth in Energy (+57% sales, +130% earnings) and Utilities (+48% sales and earnings) helped by higher energy prices
Growth flattered by euro weakness versus US$ – we estimate a c.17% tailwind from US$ alone, on sales and earnings growth during the quarter
Solid results season, even if weaker than previous trends – supported by the outsized growth achieved in Energy sector
Strong growth in Energy (+50% sales, +149% earnings) supported by higher oil price
Lower earnings due to headwinds from input costs, wage inflation and US$ strength
Results season more mixed compared to US or Europe
The aggregate surprise on both sales and earnings was skewed by industrials (+6.9% sales and +49.8% earnings surprise)
Earnings growth achieved was only +2.8%, supported by financials (+83%), Consumer, Telecoms and Real Estate all posted > -40% earnings surprises
Source: Martin Currie and FactSet as at 31 October 2022.
The European results season was stronger relative to the US, notably helped by FX tailwinds
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