The S&P 500’s Alcoa (AA, Financial) still continues to signify the beginning of earnings season, and this year’s first quarter appears to be one that will continue to see a continued decline in earnings growth. Analysts are projecting the fourth consecutive quarter of earnings declines for S&P 500 companies, and the outlook for Dow 30 companies appears to be similar with banks expected to report their worst earnings in 10 years.
Alcoa, the S&P 500’s first reporting company, released earnings after the closing bell on Monday. The company reported revenue of $4.95 billion, down 15% from the comparable quarter and 6% from the fourth quarter of 2015. EPS were also lower as expected, down 75% to 7 cents from the comparable quarter’s 28 cents.
For the week through Tuesday, the company’s stock is up 1.16% versus a gain of 0.69% from the S&P 500. However, year-to-date Alcoa is reporting a loss of 3.95% versus the S&P 500’s increase of 0.87%.
In the Dow Jones Industrial Average, JPMorgan (JPM, Financial) is the first of the bank stocks to report earnings with expected revenue of $23.4 billion, down 5.7% from the comparable quarter. Earnings for the quarter are expected to be $1.26, down from $1.45 in the first quarter of 2015. Bank earnings from Goldman Sachs (GS, Financial) are also expected to trend lower with the company reporting expected earnings on April 19 of $2.45, 59% lower than the comparable quarter.
For the week through Tuesday, JPMorgan is up 2.75% and Goldman Sachs is up 2.64% versus the DJIA’s 0.82% gain. Year-to-date, however, JPM is down 10.15% and Goldman Sachs is reporting a loss of 6.28%, while the DJIA is reporting a gain of 1.70%.
In the following interview with CNBC, industry analysts discussed their insights for the quarter’s valuations and why there are few short-term growth catalysts on the horizon.
Disclosure: I do not currently own shares of either Alcoa or JPMorgan.
