What to Expect From These 3 Q4 Earnings Late Reporters

 | Feb 27, 2024 15:16

  • Macro factors have shifted in recent weeks, but that has not upset the market’s rally a whole lot

  • As the Q4 reporting period wraps up, our team spots three firms with later-than-usual earnings reports

  • March is also an active month for shareholder meetings and other industry conferences

    • Almost two months in, 2024 has been a year of surprises. Perhaps the biggest macro story that has done an about-face is the forward interest rate market. Traders went into the year expecting upwards of seven quarter-point rate cuts by the Federal Reserve. Today, following a hot set of January CPI and PPI data and last week’s FOMC minutes that further pinched the prospects of an ease any time soon, odds favor just three or maybe four cuts for 2024, according to the latest Fed Fund futures data and analysis by Jim Bianco. Of course, things will continue to change, but markets have proven to be generally resilient in this tighter outlook, at least according to the modest gain in the S&P 500® year to date.

    h2 A Quiet Oil Patch/h2

    What has also fooled some investors is the quiet price action in the oil markets. Go back in time just a few months, and geopolitical jitters were heating up amid tensions in the Red Sea (NYSE:SE) and with the continued conflict in Ukraine. It turned out that economic weakness in China and record-high US oil production were bearish factors keeping WTI under the $80 mark. Energy sector equities are collectively about flat for the year and remain among the cheapest areas of the large-cap space, according to the latest Factset sector P/E data.

    h2 Earnings Dates & Shareholder Events on Tap/h2

    With the bulk of earnings season now behind us, single-stock stories may take center stage, as well as new developments learned at corporate events like conferences, trade shows, and investor days. 

    h2 Upcoming Off-Trend Earnings Dates/h2

    Academic research shows that when a company confirms a quarterly earnings date that is later than when they have historically reported, it’s typically a sign that the company will share bad news on their upcoming call, while moving a release date earlier suggests the opposite.

    This week, we feature two companies moving in opposite directions. Republic Services (NYSE:RSG) has been flying high as the market for garbage is apparently far from a dumpster fire. Meanwhile, Bayer AG (ETR:BAYGN) (BAYN.DE), listed on the German Xetra Dax, reduced its dividend sharply as it struggles with high interest rates and weak free cash flow. Both firms feature high Datebreaks Factors, suggesting that investors should pay particular attention to the firms’ respective upcoming earnings dates. We wrap up with a quick look at Devon Energy (NYSE:DVN) which also has a confirmed earnings date later than usual.

    h2 Republic Services: A Post-Pandemic Winner/h2
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    February 27 is trash day on Wall Street. That’s when RSG reports Q4 2023 results in the after hours. Wall Street Horizon’s data initially showed an unconfirmed earnings date of Thursday, February 15 AMC, but in January, the company confirmed its quarterly report to take place this Tuesday. The stock price has been among the S&P 500’s sharpest winners in the last year, rising nearly 40% in the last 12 months, even outpacing its industry counterpart Waste Management (NYSE:WM). 

    The later-than-usual report could raise some caution flags among investors, but data from Option Research & Technology Services (ORATS) shows that the company has topped analysts’ earnings estimates in each of the past 12 quarters. This time around, a small 2.7% earnings-related stock price move is priced into the options market, which is within historical norms. The action doesn’t end there for Republic Services – its management team is scheduled to speak at two upcoming corporate conferences: the Bank of America (NYSE:BAC) Global Agricultural and Materials Conference this Wednesday and Thursday and the Raymond James & Associates 45th Annual Institutional Investors Conference from March 3 through 6. 

    Republic Services 3-Year Stock Price History: An S&P 500 Winner Since Early 2023