Earnings Season Global: Beats, Misses and Guidance — 2026-10-16
Global earnings season kicked off with a split narrative: US banks delivered mixed results led by Morgan Stanley’s equities surge, while TSMC posted its sixth consecutive record profit driven by AI demand. In Europe, the DAX struggled as investors remained skeptical of high tech valuations despite strong corporate beats from Johnson & Johnson.
Earnings Season Global: Beats, Misses and Guidance — 2026-10-16
Top developments
TSMC posts record profit on AI boom
On October 15, TSMC reported third-quarter net income of NT$763.1 billion, marking its sixth consecutive quarter of record profits and beating estimates amid sustained AI chip demand. Revenue reached $46.72 billion, with the company raising its 2026 revenue growth forecast to approximately 44%. Despite the beat, TSMC struck a "prudent" tone for 2027, citing macroeconomic uncertainties, which tempered some investor enthusiasm. This result is critical for the global semiconductor supply chain, signaling that AI infrastructure spending remains robust.
Morgan Stanley leads bank beats with equities surge
Morgan Stanley topped Q3 expectations on October 14, reporting EPS of $3.03 against a consensus of $2.91. The beat was driven by equities trading revenue, which exceeded estimates by $909 million, pushing net revenues up 12% year-over-year to $20.34 billion. While JPMorgan, Goldman Sachs, Wells Fargo, and Citigroup also reported results on October 13, the sector showed mixed outcomes, with Bank of America’s profit weighed down by money laundering penalties.
Johnson & Johnson raises guidance despite stock pressure
Johnson & Johnson beat Q3 estimates on October 13 with adjusted EPS of $2.59 (vs. $2.53 expected) and revenue of $25.4 billion, up 5.9% year-over-year. The company raised its full-year 2026 revenue and profit outlook, supported by growth in Innovative Medicine and MedTech divisions. However, shares faced downward pressure post-earnings, reflecting broader market skepticism about valuation levels in defensive sectors.
Charles Schwab reports record results but shares fall
Charles Schwab posted record Q3 2026 results on October 15, yet its shares declined in the market. While specific figures for the drop were not detailed in the transcript summary, the disconnect between record operational performance and share price reaction highlights the market's focus on future guidance and macro headwinds rather than past performance alone.
State Street beats on fee and interest income growth
State Street Corporation reported strong Q3 2026 results on October 14, with EPS of $3.69, up 33% year-over-year. The growth was driven by double-digit increases in fee revenue, net interest income, and total revenue, positioning it as one of the stronger performers among major financial institutions this week.
Local view
In Germany, the DAX index remained in a sideways trend around 25,000 points as of October 15, with traders hesitant despite new US inflation data. Tagesschau noted that while quarterly numbers were released, they were insufficient to break the prevailing skepticism regarding high technology valuations. Handelsblatt reported that Nordea missed expectations due to lower lending margins, contrasting with Ericsson's profit boost from mobile network business. In Japan, ToMO Blog highlighted Sumisho Holdings' upward revision of its half-year ordinary profit forecast to a 15% increase, alongside dividend hikes, signaling continued strength in Japanese trading companies.
Context & numbers
The S&P 500 forward 12-month P/E ratio stands at 19.1, which is below the 5-year average, suggesting valuations may not be as stretched as perceived. For Q3 2026, early data from FactSet indicates that out of 19 S&P 500 companies reporting actual results, 16 have beaten estimates, maintaining a high beat rate trend seen in previous quarters where revenue beats exceeded 76% of companies. TSMC’s Q4 guidance of $52.3 billion to $54.3 billion in sales provides a concrete benchmark for semiconductor demand heading into year-end.
On the radar
- Daimler Q3 Results: Scheduled for October 28, 2026, where investors will look for updates on automotive demand and margin pressures.
- Swiss Steel Asset Sales: The company is planning to sell its plants in Hagen and Krefeld, a move that may impact European steel supply chains.
- PNE Group Outlook: The renewable energy firm lowered its earnings outlook due to delayed sales, a signal to watch for broader wind sector health.
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