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Under Armour Beats Q3 Earnings, Stock Down 14%

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Tuesday, October 25, 2016

It’s the busiest day we’ve yet seen in Q3 earnings season. While others mull over the likelihood of an AT&T (T - Free Report) buyout of Time Warner — especially two weeks before the U.S. presidential election in which both major candidates (plus Bernie Sanders) are opposed to the deal — we will focus on the cornucopia of Q3 earnings results before the bell today.

Under Armour (UA - Free Report) shares are getting beaten up in the pre-market following a convincing beat on top and bottom lines this morning: 29 cents per share beat the Zacks consensus estimate by 4 cents and mark a 26% gain year over year. Revenues of $1.47 billion topped the $1.45 billion expected.

However, profit margins are down year over year, and Under Armour shares are down sharply as a result — 14% as of this writing — as the conference call illustrated the need for the company to spend on advertising to keep up in its very competitive market.

Eli Lilly (LLY - Free Report) missed bottom-line estimates by 8 cents to 88 cents, also a penny-lower than earnings per share a year ago. Quarterly sales of $5.19 billion also missed expectations of $5.35 billion. However, the company’s CEO was pleased to announce Lilly’s seven newest products on the markets are up 7% in the quarter. Shares are down 1 1/8% before the opening bell.

General Motors (GM - Free Report) , with a Zacks Style Score of “A,” beat earnings estimates by nearly 15% at $1.44 per share. Its $42.8 billion in the quarter easily topped the $40.09 billion expected. Positive guidance forecast of $5.50-$6.00 per share is well beyond the $5.02 per share reported in the year-ago quarter. GM shares are up slightly in the pre-market.

Caterpillar (CAT - Free Report) is trading down ahead of the bell today following a mixed Q3 earnings report — EPS of 85 cents easily topped the 75 cents per share expected, while revenues of $9.16 billion was notably below the $9.8 billion in the Zacks consensus. The company is predicting roughly in-line revenues in the fiscal year from 2015.

Procter & Gamble (PG - Free Report) posted a 6% positive earnings surprise in Q3 to 86 cents per share. Top-line totals of $15.76 narrowly edged expectations, but fell 7% from Q3 2015. That said, 3% organic growth for a company the size of Procter & Gamble is something of a notable achievement.

We expect Apple (AAPL - Free Report) earnings after the bell today, along with AT&T and Chipotle (CMG - Free Report) . So far so good on the earnings front; we’re currently seeing the first positive earnings cycle in the S&P 500 since the June quarter of 2015.

Mark Vickery
Senior Editor

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