Companies Which to Headline First Busy Earnings Week of 2023

Microsoft, Tesla, and Johnson & Johnson will all report earnings this week, giving investors a better idea of the state of the global economy. There is growing concern over a possible recession, so these earnings reports will be closely watched for any clues about the future.

Other companies that will release their latest quarterly reports include AT&T Inc. and Verizon Communications Inc. (telecom companies), Visa Inc. and American Express Co. (credit card companies), and Southwest Airlines Co. (an airline).

There are more than 90 S&P 500 components that are scheduled to report earnings in the coming week, according to FactSet.

The reports will show how companies are doing as economists worry that high interest rates could make the U.S. economy go into a recession this year. Companies are not optimistic about growth in the near term, but prices are still high. There are some signs that inflation has peaked, which could help consumers.

The tech industry is currently facing thousands of job cuts. Microsoft and Google parent Alphabet Inc. have both recently announced significant layoffs across their global workforces in order to adapt to cooler growth.

"We've seen periods of dramatic growth over the past two years," Alphabet Chief Executive Officer Sundar Pichai wrote in a memo to employees on Friday. "To match and fuel that growth, we hired for a different economic reality than the one we face today."

Microsoft will release its quarterly results on Tuesday, while other major tech companies IBM and Intel will report their quarterly numbers on Wednesday and Thursday respectively. Other software companies have recently said that customers are being more cautious with their spending due to economic uncertainty.

Tesla's results for the quarter are expected to be released on Wednesday, and analysts are divided on what effect they will have on the company's stock price. Tesla's stock has declined by around 40% over the past three months, due in part to the company's lower-than-expected vehicle deliveries and recent price cuts on some models. Some investors believe that the results will calm concerns about Tesla's business, while others believe that they will add pressure to the stock price.

The fourth-quarter earnings season is off to a weak start, according to FactSet. The data tracker said that with 11% of S&P 500 companies having reported, earnings are on track to drop 4.6% from a year earlier. This would be the first decline since the third quarter of 2020. Revenue is projected to grow 3.7%.

The results from Visa, Mastercard, and American Express will provide a glimpse into consumer-spending patterns. Visa and Mastercard are set to publish their results on Thursday, with American Express scheduled to report on Friday.

On Tuesday, 3M Co. will reveal how consumers are handling higher prices and whether relief might be in sight. On Wednesday, Kimberly-Clark Corp. will do the same, and on Friday, Colgate-Palmolive Co. will follow suit.

On Thursday, Procter & Gamble Co. reported lower earnings as it sold fewer items in its latest quarter and raised prices an average of 10%. CEO Jon Moeller warned that the outlook isn’t improving. He said that the company is facing headwinds from a number of factors, including slower economic growth in some key markets and higher costs for raw materials and transportation.

"I, like many people, want the world to be a better place," Mr. Moeller said. "However, we must accept that there is a lot of uncertainty in the world."

On Thursday, both Southwest and American Airlines Group Inc. are set to report on the demand for air travel. This comes after Southwest faced severe disruptions in December following its inability to recover quickly from winter storms. The carrier has said the meltdown will wipe out profits in the fourth quarter.

Boeing Co. is expected to provide an update on aircraft sales a day earlier than General Electric Co., who is due to report earnings Tuesday. This could potentially provide insight into demand for industrial sales from both companies.

Johnson & Johnson's earnings report for the quarter ending March 31, 2021, could provide some insight into how much consumer spending is going toward discretionary items such as skin and beauty products. The health-products company has recently slashed production of its unpopular Covid-19 vaccine, so this report could give some indication of how that is affecting its bottom line.

On Friday, Chevron Corp. is expected to release its earnings, following CEO Michael Wirth's warnings about oil prices at the World Economic Forum in Davos, Switzerland. "The current system is very constrained at the moment, as there have been so many interventions from governments, creating rigidity," Mr. Wirth said.

Other companies that will be releasing earnings reports this week include Verizon on Tuesday and AT&T on Wednesday.

On Tuesday, Union Pacific Corp. is expected to report on the state of supply chains, followed by CSX Corp. on Wednesday. Both companies are likely to offer updates on how they are coping with the current challenges.