Quarterly Earnings Watch

Q3 2020 | Notes from the Global Growth Equity Desk

By Laura Granger and Jonathan Bauman

Key Takeaways

  • Most companies beat earnings expectations, which are rising as analysts grow more optimistic heading into 2021. The magnitude of the earnings “beats” again set records.
  • The market had a muted reaction to earnings news due to concern about the pandemic and U.S. politics.
  • Cyclical companies dependent on strong economic growth lagged, though European cyclicals showed signs of improving.
  • Surprisingly strong auto sales are emerging as a new theme. Enduring trends supporting green energy, 5G and pandemic-driven changes in consumer behavior remained key earnings drivers.
  • Despite the progress, we don’t expect earnings to reach pre-pandemic levels until late 2021 or 2022.

With the spread of COVID-19 worsening and noise from the U.S. presidential election rising, the market had a muted reaction to earnings news.

Quarterly Earnings Watch

The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

American Century Investments is not responsible for and does not endorse any comments, content, advertising, products, advice, opinions, recommendations or other materials on or available directly or via hyperlinks from Facebook, Twitter or any third-party website. Facebook, Twitter and LinkedIn are registered trademarks of their respective owners.