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Research Daily

Sheraz Mian

Q4 Scorecard and Analyst Reports for Texas Instruments & Lockheed Martin

LMT ABT TXN HPQ CNI

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Thursday, January 26 2017

Today's Research Daily features an updated scorecard for the Q4 earnings season and fresh research reports on 16 major stocks, including Texas Instruments (TXN) and Lockheed Martin (LMT). To see of all of the 70 or so research reports issued by our analyst team today, click here >>>

Q4 Earnings Scorecard: Including all of this morning's earnings reports, we now have Q4 results from 148 S&P 500 members or 29.5% of the index's total membership. Total earnings for these 148 index members are up +5.9% on +2.3% higher revenues, with 68.2% beating EPS estimates and 55.4% beating revenue estimates. This is better earnings and revenue growth performance than we have seen from this group of 148 S&P 500 members in other recent periods, even after adjusting for the strong growth from the Finance sector. The proportion of companies beating EPS and revenue estimates, however, is tracking moderately below other recent periods.

Looking at Q4 as a whole, combining the actual results from the 148 index members with estimates from the still-to-come 352 companies, total earnings are expected to be up +5.3% from the same period last year on +3.8% higher revenues. This is the best earnings and revenue growth pace in the last 8 quarters.

Strong Buy rated Texas Instruments shares have gained +55% over the last one year, outperforming the Zacks Semiconductor industry which has gained +51.4% over the same period. The company’s fourth quarter revenues and earnings grew year-over-year. The analyst likes the company’s improved margin outlook, secular strength in the auto and industrial markets, a stronger mix of analog and embedded processing products, benefits of restructuring actions and more 300mm capacity coming online. The only negatives at this point appear to be strengthening competition particularly for auto chips given recent market consolidation.  (You can read the full research report on Texas Instruments here >>)

Lockheed Martin shares have gained +19.6% over the past year, modestly underperforming the aerospace/defense sector, which has gained +22.6% over the same period. However, Lockheed Martin ended 2016 on a strong note, with its fourth-quarter numbers beating expectations. Driving this momentum is Lockheed Martin’s status as a bellwether for the defense space and the company's impressive cash flow generation abilities which it generously shares with its shareholders. The analyst likes the company's solid outlook, impressive revenue growth and potential share buybacks. However, the threat of sequestration looms large for this company, as it draws a major portion of its revenues from the defense department. (You can read the full research report on Lockheed Martin here >>)

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Sheraz Mian

Director of Research

Note: Note: Sheraz Mian regularly provides earnings analysis on Zacks.com and appears frequently in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. If you want an email notification each time Sheraz publishes a new article, please click here>>>

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