This is what we were getting at in the introduction to Sunday's "Ahead Of A Big Week of Earnings Reports". The quarter being reported this month isn't the one to worry about, it is the current quarter that will be reported in January - February 2023 that will show the effects of the pullback in consumer and corporate spending.
From CNBC, October 17:
The first crop of earnings reports was a disappointment, but most of the early bank reports on Friday were decent, and Bank of America
also reported earnings above expectations Monday morning.
Thirty- five companies have reported third-quarter earnings so far. Of that group, 68.5% have beaten estimates, lower than the prior four-quarter average of 78.1% but higher than the historic average of 66.2%, according to Refinitiv.
Like the second quarter, many have been anticipating an earnings apocalypse — a dramatic collapse in earnings.
The evidence so far suggests a contraction but not a collapse.
The third-quarter estimated earnings growth rate for the S&P 500 is now 3.6%, down from 11.1% on July 1. Excluding energy, however, the growth rate drops to minus-3.1%.
Those huge oil profits have concealed that nine of 11 S&P sectors have already seen downward earnings revisions. Technology has seen a substantial downward revision — from up 5.8% on July 1 to minus-4.0% today.
There have been similar downward revisions in the fourth quarter as well. Technology has gone from an expected gain of 8.6% on July 1 to minus-0.4% now, for example....
....MUCH MORE
