Majority of Investors Not Surprised by First-Quarter Earnings

This week’s Sentiment Survey special question asked AAII members to share their thoughts about first-quarter earnings reports. The overwhelming majority of respondents (64%) state that earnings were more or less in line with expectations. Many within this majority expect earnings to take a bigger hit in the second quarter. They also express concern about many companies not releasing guidance.

Additionally, 17% of respondents state that they believe current low earnings estimates and guidance indicate that earnings will take a bigger hit in the coming quarters. Finally, 15% of respondents state that they think first-quarter earnings reports are more or less immaterial at this time and do not fully reflect the impact that the coronavirus pandemic is having on many companies.

Here is a sampling of the responses:  

• “About what I expected. Even if the reports aren’t too bad right now, there will be lasting damage. I don’t think the recovery will be as quick as the market is expecting.”
• “Current reporting is inconclusive and simply doesn’t reflect the cascading economic consequences to come.”
• “I believe the first quarter was not reflective of the coronavirus pandemic. My personal feeling is that the second quarter will be much more telling.”
• “The lower earnings across the spectrum of securities is a harbinger of things to come.”

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