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These 3 Companies Delivered Beat-and-Raise Quarters
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Earnings season continues to chug along, picking up notable steam since the beginning of last week’s results from a few mega-cap technology players. We’ve received many positive surprises throughout the period as companies continue to navigate a unique macroeconomic situation.
Regarding positivity, three companies – Colgate-Palmolive (CL - Free Report) , ServiceNow (NOW - Free Report) , and Coca-Cola (KO - Free Report) – all delivered results that had shareholders pleased, with each lifting their outlooks and seeing buying pressure post-earnings.
Given the bullish reactions, what was there to like in each respective release? Let’s take a closer look.
Colgate-Palmolive
Colgate-Palmolive is a global leader in the oral care hygiene market, providing household, healthcare, and personal care products. Regarding headline figures, Colgate-Palmolive posted a 7.5% surprise relative to the Zacks Consensus EPS Estimate and reported revenue 2% ahead of expectations.
Earnings saw year-over-year growth of 16%, whereas revenue climbed 10%. As shown below, the company’s top line has shown solid growth throughout 2023.
Image Source: Zacks Investment Research
In addition, the company’s gross profit margin improved 130 basis points to 58.5%, and operating cash flow grew 39% year-over-year to $2.6 billion. Both measures reflect enhanced profitability while also representing the third consecutive quarter of margin expansion, which is undoubtedly what shareholders wanted to hear.
Given the strong results and continued margin turnaround, CL upped its FY23 guidance; Colgate-Palmolive now expects revenue growth in a band of 6% - 8% (previously 5% - 8%). The company also expects continued margin expansion and double-digit EPS growth for its FY23.
Shares saw bullish momentum following the release, with CL shares now trading at their 200-day daily moving average. Investors should keep an eye out if CL shares can hold and continue trading above this key level.
Image Source: Zacks Investment Research
ServiceNow
ServiceNow provides cloud computing services that automate digital workflows to accelerate enterprise IT operations. The company posted a 14.5% EPS beat and reported revenue modestly ahead of expectations, representing year-over-year growth rates of 49% and 25%, respectively.
The company’s revenue trajectory has been remarkable over the recent years.
Image Source: Zacks Investment Research
ServiceNow’s subscription revenues climbed 27% to $2.2 billion, above prior guidance and driven by continued business momentum as the company continues to attract customers. In fact, the company exited the quarter with more than 1700 total customers with more than $1 million in annual contract value (ACV), up 17% compared to the year-ago quarter.
And undoubtedly to the likes of investors, the company launched its Vancouver Platform in Q3, which embedded generative AI across workflows on its Now Platform. Following the strong quarter, NOW upped its FY23 subscriptions and operating margin guidance.
Shares may not interest those with a value-conscious approach, as the current 13.1X forward price-to-sales (F1) is undoubtedly expensive. Still, investors haven’t minded forking up the premium given the company’s forecasted growth, with sales expected to climb 23% in its current year (FY23) and an additional 20% in FY24.
Image Source: Zacks Investment Research
Coca-Cola
Beverage titan Coca-Cola reported a 7% beat relative to the Zacks Consensus EPS Estimate and posted revenue 4.3% ahead of expectations, representing year-over-year growth rates of 7.3% and 8%, respectively.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
In addition, the company’s cash-generating abilities have improved; year-to-date cash flow from operations climbed $861 million to $8.9 billion, with year-to-date free cash flow growing $636 million to $7.9 billion. It’s also worth noting that Coca-Cola’s operating margin took a slight hit, primarily affected by currency headwinds.
Coca-Cola raised its organic revenue (non-GAAP) guidance for FY23 following the print, now expecting growth in a band of 10% – 11%. Shares saw a solid pop following the release, with the momentum continuing.
Image Source: Zacks Investment Research
Bottom Line
Earnings season continues its rapid pace this week, with a full slate of earnings on deck.
So far, the period has been primarily positive, especially for Colgate-Palmolive (CL - Free Report) , ServiceNow (NOW - Free Report) , and Coca-Cola (KO - Free Report) .
All three companies posted better-than-expected results and lifted their outlooks, undoubtedly a powerful pairing.
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These 3 Companies Delivered Beat-and-Raise Quarters
Earnings season continues to chug along, picking up notable steam since the beginning of last week’s results from a few mega-cap technology players. We’ve received many positive surprises throughout the period as companies continue to navigate a unique macroeconomic situation.
Regarding positivity, three companies – Colgate-Palmolive (CL - Free Report) , ServiceNow (NOW - Free Report) , and Coca-Cola (KO - Free Report) – all delivered results that had shareholders pleased, with each lifting their outlooks and seeing buying pressure post-earnings.
Given the bullish reactions, what was there to like in each respective release? Let’s take a closer look.
Colgate-Palmolive
Colgate-Palmolive is a global leader in the oral care hygiene market, providing household, healthcare, and personal care products. Regarding headline figures, Colgate-Palmolive posted a 7.5% surprise relative to the Zacks Consensus EPS Estimate and reported revenue 2% ahead of expectations.
Earnings saw year-over-year growth of 16%, whereas revenue climbed 10%. As shown below, the company’s top line has shown solid growth throughout 2023.
Image Source: Zacks Investment Research
In addition, the company’s gross profit margin improved 130 basis points to 58.5%, and operating cash flow grew 39% year-over-year to $2.6 billion. Both measures reflect enhanced profitability while also representing the third consecutive quarter of margin expansion, which is undoubtedly what shareholders wanted to hear.
Given the strong results and continued margin turnaround, CL upped its FY23 guidance; Colgate-Palmolive now expects revenue growth in a band of 6% - 8% (previously 5% - 8%). The company also expects continued margin expansion and double-digit EPS growth for its FY23.
Shares saw bullish momentum following the release, with CL shares now trading at their 200-day daily moving average. Investors should keep an eye out if CL shares can hold and continue trading above this key level.
Image Source: Zacks Investment Research
ServiceNow
ServiceNow provides cloud computing services that automate digital workflows to accelerate enterprise IT operations. The company posted a 14.5% EPS beat and reported revenue modestly ahead of expectations, representing year-over-year growth rates of 49% and 25%, respectively.
The company’s revenue trajectory has been remarkable over the recent years.
Image Source: Zacks Investment Research
ServiceNow’s subscription revenues climbed 27% to $2.2 billion, above prior guidance and driven by continued business momentum as the company continues to attract customers. In fact, the company exited the quarter with more than 1700 total customers with more than $1 million in annual contract value (ACV), up 17% compared to the year-ago quarter.
And undoubtedly to the likes of investors, the company launched its Vancouver Platform in Q3, which embedded generative AI across workflows on its Now Platform. Following the strong quarter, NOW upped its FY23 subscriptions and operating margin guidance.
Shares may not interest those with a value-conscious approach, as the current 13.1X forward price-to-sales (F1) is undoubtedly expensive. Still, investors haven’t minded forking up the premium given the company’s forecasted growth, with sales expected to climb 23% in its current year (FY23) and an additional 20% in FY24.
Image Source: Zacks Investment Research
Coca-Cola
Beverage titan Coca-Cola reported a 7% beat relative to the Zacks Consensus EPS Estimate and posted revenue 4.3% ahead of expectations, representing year-over-year growth rates of 7.3% and 8%, respectively.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
In addition, the company’s cash-generating abilities have improved; year-to-date cash flow from operations climbed $861 million to $8.9 billion, with year-to-date free cash flow growing $636 million to $7.9 billion. It’s also worth noting that Coca-Cola’s operating margin took a slight hit, primarily affected by currency headwinds.
Coca-Cola raised its organic revenue (non-GAAP) guidance for FY23 following the print, now expecting growth in a band of 10% – 11%. Shares saw a solid pop following the release, with the momentum continuing.
Image Source: Zacks Investment Research
Bottom Line
Earnings season continues its rapid pace this week, with a full slate of earnings on deck.
So far, the period has been primarily positive, especially for Colgate-Palmolive (CL - Free Report) , ServiceNow (NOW - Free Report) , and Coca-Cola (KO - Free Report) .
All three companies posted better-than-expected results and lifted their outlooks, undoubtedly a powerful pairing.