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Q3 Earnings Blasting Off: GS, MS, JNJ and More

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Tuesday, October 17, 2017

Good news is here, investing friends! Q3 earnings results are not only clear and present, but results are better than expected among most household name stocks ahead of the bell this morning. In a quarter rife with stresses from the nation’s capital, natural disasters both here and abroad, and other stock market headwinds, stronger-than-expected earnings are providing a good tonic for us this morning.

Goldman Sachs (GS - Free Report) tore the cover off the ball, figuratively speaking. The Wall Street investment giant easily surpassed top and bottom-line estimates: $5.02 per share beat the $4.31 expected, and revenues of $8.3 billion topped the $7.6 billion in the Zacks consensus estimate. This was also higher than the $8.2 billion recorded in the year-ago quarter. This marks the fourth quarter in the last five that Goldman Sachs has beaten earnings estimates, for a 4-quarter trailing average of 11.6%.

Morgan Stanley (MS - Free Report) also beat expectations for both earnings and revenues: the investment bank’s top line brought in $9.2 billion, versus the $9.0 billion expected, on earnings per share of 93 cents — easily outpacing the 81 cents anticipated. Investment banking revenues, in particular, grew 18.4% in the company’s Q3.

Household products giant Johnson & Johnson (JNJ - Free Report) beat earnings estimates by a solid dime to $1.90 per share, as top-line results also came in above expectations: $19.65 billion versus $19.28 billion in the Zacks consensus. Guidance for fiscal 2017 was also raised. Pharma sales in the quarter grew an impressive 15.4%.

For its fifth straight earnings beat (at least), United Healthcare (UNH - Free Report) also posted a positive surprise ahead of today’s opening bell: $2.66 per share bested the $2.57 expected. Revenues of $50.3 billion in the quarter rose 8.7% year over year on growth in medical enrollment.

On the other side of the street, Harley Davidson (HOG - Free Report) illustrated some of the difficulties in today’s market, just meeting the 40 cents per share expected in the Zacks consensus, down 40% from year-ago results. Sales of $962.1 million did top the $960.8 million expected, but these numbers are both down from the $1.1 billion reported in Q3 2016. Baby boomers buying fewer bikes looks to be the culprit here; in related news, Peter Fonda is 77 years old.

New Import/Export Numbers

September results for both import and export prices beat expectations this morning, up 0.7% last month from the 0.6% consensus, as well as the unrevised headline from the previous month. Exports performed even better, up 0.8% as opposed to the +0.5% expected. Imports year over year are in-line at +1.9%, while exports are +2.7% since this time last year. More grist for the interest rate hike mill. You know the Fed is paying attention to this.

Mark Vickery
Senior Editor

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