Friday, July 21st, 2017

To finish off this first busy week of Q2 earnings season — and with a lack of new economic headlines and/or tweets from the President this morning — perhaps we’re best served with a quick run-down of earnings reports ahead of today’s opening bell. We also look for an 11th straight day of gains on the Nasdaq, which would be the longest such stretch in 8 years.

General Electric GE posted beats on its Q2 top and bottom lines this morning, with 28 cents per share topping the Zacks consensus by 3 cents, and revenues of $29.56 billion surpassing the $29.13 billion expected. This marks the 4th earnings beat in the last 5 quarters for GE (that 5th quarter was a meet, not a miss), and the company has reiterated its fiscal 2017 guidance. GE also announced that incoming CEO John Flannery will be taking over for Jeff Immelt as of August 1st, and will secure the reins to the Chairmanship as of the first of the year.

Zacks Rank #2 (Buy)-rated Honeywell HON modestly beat estimates on the bottom line to $1.80 per share. $10.08 billion in quarterly sales also topped expectations. The New Jersey-based industrial major raised its fiscal 2017 guidance, and this Q2 earnings report also represents the 4th beat in the last 5 quarters (the 5th quarter was also a meet, not a miss).

Oil & gas services major Schlumberger SLB handily outperformed estimates on both top and bottom lines, with 35 cents a share beating the Zacks consensus by 5 cents and revenues of $7.46 billion surpassing the $7.26 billion expected. The company’s Drilling business was up 77% in the quarter, and its Production Group income rose 170% year over year.

Fifth Third Bank FITB put up mixed Q2 results this morning, topping estimates by 4 cents to 46 cents per share but with a miss on the top-line: $1.50 billion in revenues compared with the $1.53 billion expected. Higher net interest income and lower provisions for loan and lease losses — down 43% — were the quarterly highlights. Fifth Third has beaten earnings estimates in 3 of its last 4 quarters.

Railroad major Kansas City Southern KSU posted a strong Q2 before today’s opening bell, with earnings of $1.45 per share beating the Zacks consensus by 8 cents — +24% year over year — on quarterly sales of $5.25 billion that outpaced the estimate of $5.16 billion. Freight revenues grew 11% overall, with Operating Income up 21% to $2 billion. The company also bought back $850 million in KSU shares in the quarter.

Posting a real blow-out quarter this morning is Encana ECA, the Calgary, Alberta, Canada-based natural gas E&P firm, which blew away expectations on both top and bottom lines. Its 18 cents per share more than quadrupled the 4 cents anticipated, on sales of $1.08 billion that easily topped the $773 million in the Zacks consensus. This revenue beat represents 197.5% growth year over year. Operating costs fell 16% since this time a year ago. We expect an upgrade to its current Zacks Rank #4 (Sell) based on this stellar quarterly performance.

Mark Vickery
Senior Editor

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Key Earnings Reports For Jul 22, 2017