Earnings season is officially underway, with Netflix's results stealing the show last week. So far, earnings season is ramping up alongside improving sentiment in the stock market. The S&P 500 is up nearly 7% year to date, following a rough fourth quarter of 2018, in which the index declined more than 14%. Will corporate earnings impress, potentially helping further improve market sentiment?

Whatever happens to the overall market, two companies scheduled to report earnings this week that will be worth taking a close look at are Starbucks (SBUX -1.39%) and Intuitive Surgical (ISRG 1.16%). Both stocks have significantly outperformed the S&P 500 over the past year, with Starbucks up 7% and Intuitive Surgical up 26% -- impressive returns over a 12-month period in which the S&P 500 fell 5%. Can the two companies keep up their momentum?

A woman using Starbucks' app on her mobile phone.

Image source: Starbucks.


Check out the latest Starbucks earnings call transcript.

Scheduled to report its fiscal first-quarter results on Thursday, Starbucks will need to keep up its reaccelerated comparable-store sales growth and maintain a healthy outlook for its business to keep investors satisfied.

Halfway through last year, Starbucks reduced its outlook for its third-quarter comparable-store sales, guiding for anemic 1% growth in the metric. Fortunately, things turned around quickly and the company impressed investors with 3% comparable-store sales growth. The improvement in this key metric is key, as Chief Operating Officer Rosalind Brewer said in the company's fourth-quarter earnings call that strong comps ultimately drive sales leverage and help the company's operating margin.

Investors should look for Starbucks to report first-quarter comparable-store sales growth within its guidance range for the key metric for fiscal 2019: growth between 3% and 4%.

In addition, investors should look for Starbucks to maintain this optimistic view for its comparable-store sales trend in 2019. Any downward revisions to guidance could be a red flag.

Intuitive Surgical

Check out the latest Intuitive Surgical earnings call transcript.

Intuitive Surgical is also scheduled to report its quarterly results on Thursday. But since Intuitive Surgical recently reported preliminary results for the period, investors already have some key data on the fourth quarter.

Fourth-quarter revenue came in at an estimated $1.05 billion, up 17% year over year. This was driven by 290 shipments of the da Vinci Surgical Systems (the company's minimally invasive surgical robot) and an 18% year-over-year increase in instrument and accessory revenue.

The company still hasn't provided data on its fourth-quarter non-GAAP earnings per share. The consensus analyst estimate for the key metric is $3.06, representing 20% year-over-year growth.

Investors should also look for Intuitive Surgical to maintain its guidance for 13% to 17% growth in procedures for the full year of 2019 compared to 2018. Procedure growth is one of the most closely watched metrics by investors as it helps to show adoption and utilization trends for the company's products and services.