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3 Stocks to Consider After Beating Earnings Estimates
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With the earnings season now in full force, valuable data to gauge the broader economy will be rolling in.
Below, I will share three stocks that posted earnings beats this morning, and that I think may be appealing additions to many investors’ portfolios.
General Electric
In 2023 General Electric (GE - Free Report) stock recorded one of its best performances in modern history gaining 60% in the year. General Electric also enjoys a Zacks Rank #2 (Buy) rating reflecting upward trending earnings revisions. Following the high marks and impressive stock performance GE posted a strong quarter and full year of earnings.
General Electric reported Q4 earnings that exceeded expectations, with a 9% decrease in EPS to $1.13, surpassing the anticipated 28% drop. Revenue climbed 15% to $19.4 billion, beating expectations of a drop to $17.18 billion. Despite the positive results, GE stock opened lower after reaching a six-year high the previous day. However, by mid-day the stock rallied to unchanged, indicating strong buying pressure.
The company is undergoing a transformation into a pure-play aerospace company, planning to break out its power and renewables business as GE Vernova in April. GE's health care spinoff, GE HealthCare Technologies, debuted on the Nasdaq in January 2023.
In 2023, GE reported total orders of $79.2 billion, a 25% increase, and total revenues of $68.0 billion, a 17% rise. The profit margin increased by 1,640 basis points to 15.0%, and adjusted profit margin rose by 310 basis points to 8.8% organically. Full-year continuing EPS was $7.98, a significant improvement, and adjusted EPS reached $2.81.
For Q1 2024, GE expects high-single-digit revenue growth, adjusted EPS of $0.60 to $0.65, and free cash flow in line with net income growth.
Johnson & Johnson
Johnson and Johnson (JNJ - Free Report) currently has a Zacks Rank #3 (Hold) rating, but was able to beat earnings estimates, nonetheless.
Johnson & Johnson reported Q4 earnings and revenue that slightly exceeded expectations. The pharmaceutical and medical devices businesses experienced a surge in sales, contributing to a total of $21.40 billion in sales for the quarter, marking a 7.3% increase from the same period in 2022.
Net income for the quarter was $4.13 billion, or $1.70 per share, compared to $3.23 billion, or $1.22 per share, in the year-ago period. Adjusted earnings per share were $2.29, slightly beating the expected $2.28. J&J provided a full-year guidance for 2024, anticipating sales between $87.8 billion and $88.6 billion, with adjusted earnings ranging from $10.55 to $10.75 per share.
The medical devices business generated sales of $7.67 billion, up 13.3%, while pharmaceutical sales reached $13.72 billion, with a notable contribution from drugs like Darzalex and Stelara.
Despite challenges such as the loss of patent protection on Stelara, J&J remains optimistic about its pharmaceutical unit's growth, projecting a compounded annual growth rate of 5% to 7% between 2025 and 2030.
JNJ stock is down (-1.2%) on the day, but is printing a large reversal candle, indicating strong buying interest.
Image Source: TradingView
Verizon Communications
Verizon Communications (VZ - Free Report) too has a Zacks Rank #3 (Hold) rating but is surging higher following earnings. VZ stock is up nearly 6% following the meeting.
Verizon Communications reported Q4 earnings that met Wall Street estimates, with earnings per share of $1.08 on an adjusted basis, a 9% decrease from the previous year, and revenue of $35.1 billion, dipping 0.3%. Despite this, VZ stock rose to an 11-month high.
The key highlight was the addition of 449,000 postpaid phone customers, surpassing expectations and indicating momentum in the consumer market. Verizon CEO Hans Vestberg emphasized continuous improvement, particularly in postpaid phone net adds, marking the best performance in two years.
Despite challenges, such as the loss of the "best network" marketing claim, Verizon aims for a balanced approach to growth and profitability in 2024. For the full year 2023, Verizon reported a total consolidated operating revenue of $134.0 billion, down 2.1% from the previous year, and full-year cash flow from operations increased to $37.5 billion. Consumer wireless service revenue saw a 3.2% YoY increase in Q4 2023, driven by pricing actions and higher adoption of premium price plans.
The company added 318,000 postpaid consumer phone customers in Q4, with the C-Band deployment contributing to improved performance. Verizon's focus on generating growth in service revenue, free cash flow, and EBITDA is part of its strategy amid industry challenges and changes.
Verizon Communications is trading at a one year forward earnings multiple of 8.6x, which is below the industry average and below its 10-year median of 12x. It is also worth noting that the company pays a hefty 6.7% dividend yield to shareholders.
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3 Stocks to Consider After Beating Earnings Estimates
With the earnings season now in full force, valuable data to gauge the broader economy will be rolling in.
Below, I will share three stocks that posted earnings beats this morning, and that I think may be appealing additions to many investors’ portfolios.
General Electric
In 2023 General Electric (GE - Free Report) stock recorded one of its best performances in modern history gaining 60% in the year. General Electric also enjoys a Zacks Rank #2 (Buy) rating reflecting upward trending earnings revisions. Following the high marks and impressive stock performance GE posted a strong quarter and full year of earnings.
General Electric reported Q4 earnings that exceeded expectations, with a 9% decrease in EPS to $1.13, surpassing the anticipated 28% drop. Revenue climbed 15% to $19.4 billion, beating expectations of a drop to $17.18 billion. Despite the positive results, GE stock opened lower after reaching a six-year high the previous day. However, by mid-day the stock rallied to unchanged, indicating strong buying pressure.
The company is undergoing a transformation into a pure-play aerospace company, planning to break out its power and renewables business as GE Vernova in April. GE's health care spinoff, GE HealthCare Technologies, debuted on the Nasdaq in January 2023.
In 2023, GE reported total orders of $79.2 billion, a 25% increase, and total revenues of $68.0 billion, a 17% rise. The profit margin increased by 1,640 basis points to 15.0%, and adjusted profit margin rose by 310 basis points to 8.8% organically. Full-year continuing EPS was $7.98, a significant improvement, and adjusted EPS reached $2.81.
For Q1 2024, GE expects high-single-digit revenue growth, adjusted EPS of $0.60 to $0.65, and free cash flow in line with net income growth.
Johnson & Johnson
Johnson and Johnson (JNJ - Free Report) currently has a Zacks Rank #3 (Hold) rating, but was able to beat earnings estimates, nonetheless.
Johnson & Johnson reported Q4 earnings and revenue that slightly exceeded expectations. The pharmaceutical and medical devices businesses experienced a surge in sales, contributing to a total of $21.40 billion in sales for the quarter, marking a 7.3% increase from the same period in 2022.
Net income for the quarter was $4.13 billion, or $1.70 per share, compared to $3.23 billion, or $1.22 per share, in the year-ago period. Adjusted earnings per share were $2.29, slightly beating the expected $2.28. J&J provided a full-year guidance for 2024, anticipating sales between $87.8 billion and $88.6 billion, with adjusted earnings ranging from $10.55 to $10.75 per share.
The medical devices business generated sales of $7.67 billion, up 13.3%, while pharmaceutical sales reached $13.72 billion, with a notable contribution from drugs like Darzalex and Stelara.
Despite challenges such as the loss of patent protection on Stelara, J&J remains optimistic about its pharmaceutical unit's growth, projecting a compounded annual growth rate of 5% to 7% between 2025 and 2030.
JNJ stock is down (-1.2%) on the day, but is printing a large reversal candle, indicating strong buying interest.
Image Source: TradingView
Verizon Communications
Verizon Communications (VZ - Free Report) too has a Zacks Rank #3 (Hold) rating but is surging higher following earnings. VZ stock is up nearly 6% following the meeting.
Verizon Communications reported Q4 earnings that met Wall Street estimates, with earnings per share of $1.08 on an adjusted basis, a 9% decrease from the previous year, and revenue of $35.1 billion, dipping 0.3%. Despite this, VZ stock rose to an 11-month high.
The key highlight was the addition of 449,000 postpaid phone customers, surpassing expectations and indicating momentum in the consumer market. Verizon CEO Hans Vestberg emphasized continuous improvement, particularly in postpaid phone net adds, marking the best performance in two years.
Despite challenges, such as the loss of the "best network" marketing claim, Verizon aims for a balanced approach to growth and profitability in 2024. For the full year 2023, Verizon reported a total consolidated operating revenue of $134.0 billion, down 2.1% from the previous year, and full-year cash flow from operations increased to $37.5 billion. Consumer wireless service revenue saw a 3.2% YoY increase in Q4 2023, driven by pricing actions and higher adoption of premium price plans.
The company added 318,000 postpaid consumer phone customers in Q4, with the C-Band deployment contributing to improved performance. Verizon's focus on generating growth in service revenue, free cash flow, and EBITDA is part of its strategy amid industry challenges and changes.
Verizon Communications is trading at a one year forward earnings multiple of 8.6x, which is below the industry average and below its 10-year median of 12x. It is also worth noting that the company pays a hefty 6.7% dividend yield to shareholders.
Image Source: Zacks Investment Research