Bank of America, Apple, Facebook, and Microsoft are part of Zacks Earnings Preview:

For Immediate Release

Chicago, IL – April 22, 2014 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Bank of America (BAC-Free Report), Apple (AAPL-Free Report), Facebook (FB-Free Report) and Microsoft (MSFT-Free Report).

To see more earnings analysis, visit http://at.zacks.com/?id=3207.

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Q1 Earnings Growth Very Weak

The 2014 Q1 reporting season peaks this week, with almost 600 companies reporting results, including 154 S&P 500 companies. It has been an unimpressive earnings season thus far, with earnings growth non-existent, fewer companies coming out with top-line surprises, and guidance no better than what we have been seeing in recent quarters.

Part of the reason for the underwhelming earnings picture at this stage is the weak Finance sector results, particularly from the big banks, which are heavily represented in the starting line-up of results. With results from almost half of the Finance sector’s total market capitalization already out, total Q1 earnings for the sector are down -10% from the same period last year on -3.3% lower revenues. The tough Bank of America (BAC-Free Report) comparison is no doubt a major reason for the -10% total earnings decline, but the sector’s earnings would still be down -2.4% even if we exclude Bank of America from the aggregate numbers.

We haven’t seen that many results from the Technology sector at this stage, with total earnings for the one-third of the sector’s total market capitalization that have already reported up +4.7% on +3.7% higher revenues. We will have to see whether Apple (AAPL-Free Report), Facebook (FB-Free Report) and Microsoft (MSFT-Free Report) can do better in their earnings announcements this week.

With results from almost 1/3rd of the S&P 500 coming out this week, the aggregate Q1 earnings picture will evolve to some extent. But I suspect that the trend of weak growth and sub-par guidance that we have already seen will largely remain intact.

Scorecard for 2014 Q1 (as of Monday, April 21st)

Total earnings for the 87 S&P 500 members that have reported results are down -3.1% from the same period last year, with a ‘beat ratio’ of 63.6% and a median surprise of +2.7%. Total revenues are up +1.3%, with a revenue ‘beat ratio’ of 42% and the median company missing top-line expectations by -0.3%.

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