Update Equities: Earnings season well underway
We are now in the latter part of the earning season. In the US, most companies have issued their results, of which 75% were better than expected because of conservative analyst guidance. In Europe, around half of the results were better than expected, with just over half of the companies having reported. Below is a summary of this week’s results.
Industrials and aerospace/defence emerged as standout performers. These companies in particular set a confident tone: Safran delivered a strong year and went a step further by raising its medium‑term ambitions, while BAE Systems guided toward another phase of healthy growth. Airbus struck a more balanced note, showing firm operational progress even as its delivery trajectory softened slightly. Elsewhere across autos and broader industrials, messaging was pragmatic rather than pessimistic, with Volkswagen emphasizing cost discipline and portfolio focus.
Travel, leisure, and online platforms also leaned positive, underpinned by resilient demand. Airbnb highlighted robust booking trends and maintained an upbeat outlook, while Booking.com reported strong trading momentum alongside a shareholder‑friendly stock split, reinforcing confidence in the sector’s underlying fundamentals.
Healthcare developments were steadier, though not without selective bright spots. Moderna surprised on the upside, contrasting with Medtronic’s results, which landed closer to the middle of expectations. Meanwhile, Danaher’s interest in acquiring Masimo underscored the continued consolidation trend within medical technology, a theme that remains supportive for well‑positioned operators.
Technology, artificial intelligence (AI) and semiconductors presented a more complex picture. Headline risk was mixed, but the structural pull of the sector remained strong. Apple’s product cadence and its push toward AI‑enabled hardware helped keep sentiment constructive, while talk of improving Samsung chip pricing added a cyclical tailwind. In contrast, security software proved choppier: Palo Alto delivered solid growth but tempered near‑term earnings expectations. On the AI platform front, funding discussions around OpenAI and product and partnership updates from Anthropic highlighted the rapid pace of capability build‑out, even as US defence‑related scrutiny introduced a policy overhang for parts of the ecosystem.
Materials and commodities were volatile rather than weak. BHP demonstrated underlying resilience, while Glencore’s update reflected the challenges of operating amid politicized supply chains and growing scale imperatives. In chemicals, however, Bayer’s litigation developments dominated the narrative, reversing recent positive share-price momentum with a sharp pullback.
Consumer staples continued to lag. General Mills’ softer multi‑year outlook and Nestlé’s ongoing portfolio pruning highlighted pressure from a tougher consumer environment and more challenging category dynamics.
Taken together, the picture is one where industrials and travel‑related platform names are leading, healthcare remains steady, and technology continues to benefit from strong structural drivers, despite policy and earnings cross‑currents. The consumer staples sector, by contrast, remains on the back foot.
Jan Wirken