Investors Looking for Earnings Guidance in Second-Quarter Reports

For this week’s Sentiment Survey special question, we asked AAII members what information they will be looking for companies to give when they report second-quarter earnings. Some of the respondents gave more than one answer.

Slightly more than one out three of respondents (36%) say they are looking for companies to report full-year and quarterly forward guidance. Respondents also say they will be looking for information on current and forecasted earnings (named by 12% of respondents) and revenues (named by 17% of respondents).

This compares to 9% of respondents who say they will be looking for companies to provide information on how the coronavirus pandemic has impacted their business and their strategy going forward if the current situation persists. About 8% of respondents say they do not have any expectations for second-quarter earnings due to economic uncertainty. Additionally, 8% of respondents say they are interested in seeing information on companies’ employment, hiring and layoff plans. Finally, 6% of respondents say they will be looking for information on whether companies will maintain their dividends and 4% of respondents say they will be looking out for the amount of cash on hand companies are holding.

Here is a sampling of the responses:

• “I will be looking for companies to resume providing earnings guidance; however, given the rise in coronavirus cases in recent weeks, I’m not confident many will be willing to do so.”
• “I will be interested to see what steps the companies are taking to mitigate all the current negativity around the pandemic to protect their bottom line and/or be part of the solution rather than just looking for a handout from the government.”
• “Management’s outlook for the economy and their own company’s business prospects over the next 12–18 months. What is the company’s strategy to adapt to the new economic environment?”
• “None as there is way too much uncertainty for them to give meaningful guidance. Best to wait for third- and fourth-quarter 2020 and 2021 when the situation may be clearer.”
• “Will be looking for the medium and long-term impact of the coronavirus on the sales and operations and how the executives are driving resilience and sustainability without too much focus on the quarterly results.”

If you want to become an effective manager of your own assets and achieve your financial goals, consider a risk-free 30-day Trial AAII Membership