Earnings Season to Begin with U.S. Banks, Delta

As the markets move beyond a tumultuous 2022, traders may be looking forward to this week’s upcoming earnings releases in order to get a foretaste of what’s in store for 2023. In the coming days, some of the United States’ most important financial institutions as well as Delta Airlines are set to release their latest quarterly results.

U.S. Banks Open Earnings Season

This coming Friday, several of the biggest names in the American banking industry are expected to release their quarterly earnings reports before the ring of the opening bell on Wall Street. Bank of America (BAC), JPMorgan (JPM), Citigroup (C), and Wells Fargo (WFC) will be among those opening the first earnings season of 2023 on the 13th.

All other things being equal, it may be expected that firms in the American banking sector would do well during a period of fiscal tightening. When the Federal Open Market Committee (FOMC), which determines the course of monetary policy for the world’s largest economy, moves to raise interest rates, the net interest margins gained by banks generally benefit.

Despite this, a generally risk-averse market mood may have had deleterious effects on bank earnings. It’s being posited by some market experts that underwriting of both equity and debt took a hit in the most recent quarter, with the results of such to be seen in Friday’s earnings releases. 

Bank of America is expected to show a slight year-over-year increase in earnings per share (EPS) from 82 to 83 cents for Q4 2022. In contrast, industry peer JPMorgan is expected to show a decline in earnings per share from last year’s fourth quarter figures of over 5% to $3.16. Citigroup’s EPS is estimated to show an even greater year-over-year proportional decline of nearly 40% to $1.21 for the fourth quarter of 2022. Rounding out Friday’s bank earnings with the biggest expected decline of all, Wells Fargo’s earnings per share could drop by more than half year-over-year to 64 cents. (Source:Yahoo Finance)

How this data may affect the share values of these four top financial institutions remains to be seen, but many experts expect this earnings season to be the first of at least two difficult quarters for U.S. companies.

Delta Earnings to Lift Off?

Major American airline Delta Air Lines (DAL) is also expected to release its results for 2022’s fourth quarter on Friday before the opening of the trading day as well. Compared to the banking sector, it seems that Delta is in a relatively secure position going into earnings season.

Market watchers are estimating that a bump in consumer demand for air travel will have had a positive impact on Delta’s bottom line over the final quarter of last year. A major contributing factor to this jump in the purchase of tickets may have been the holiday season in the U.S. It’s expected that 86% of seats on Delta flights were filled from September through the end of the year, a rise of 8% from the year-ago figure.

Estimates for Delta’s Q4 2022 earnings per share come in at $1.33, a five-fold increase from Q4 2021’s number. Additionally, revenues are expected to come in at $13.08 billion, a year-over-year jump of nearly 40%. Whether these encouraging figures may push traders to help Delta recoup some of the 7.8% loss in share value seen since the beginning 2022 remains to be seen.

Recent earnings seasons have been full of surprises, and with the markets being marked by volatility in recent years, it’s anyone’s guess what developments are in store. Traders and investors alike will have to wait and see.