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Q3 Earnings Results Impress: GS, MS, UNH & More

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Tuesday, October 16, 2018

If you’re a market participant looking to re-direct your focus away from international challenges like Saudi Arabia, North Korea, Russia, et. al., you’re in luck: Q3 earnings reports are hitting the tape fast and furious at this hour. We will take this opportunity to summarize a handful of them.

But first, we’d like to extend our condolences to the family of Paul Allen, co-founder of Microsoft (MSFT - Free Report) , who has passed away at the age of 65. Allen was, along with business partner Bill Gates, a visionary of personal computing. He had a while back gotten out of the day-to-day of running a major tech firm, and owned professional sports teams the Seattle Seahawks in the NFL and Portland Trailblazers in the NBA. Allen has finally lost his long battle with cancer.

Also, keep in mind we see Q3 earnings results from Netflix (NFLX - Free Report) after today’s market close. The company has posted a positive surprise in 18 of the last 20 quarters, and last missed expectations a year ago, for Q3 2017. Currently, we expect 68 cents per share — a year-over-year increase of nearly 135% — on $3.99 billion expected in quarterly sales, itself an increase of 33.6%. Netflix stands at a Zacks Rank #3 (Hold) but a Style Score (Value - Growth - Momentum) of F.

Goldman Sachs (GS - Free Report) — the investment banker’s investment bank — easily outperformed expectations on both top and bottom lines, with $6.28 per share zooming past the $5.42 in the Zacks consensus and revenues of $8.65 billion beating the $8.37 billion expected. Fixed Income, Currency and Commodities (earnings FICC) missed expectations — $1.31 billion as opposed to $1.45 billion anticipated, but otherwise Goldman performed well in the quarter. Shares are up a point and a half before the bell, but are still down 15% year to date. For more on GS’s earnings, click here.

Morgan Stanley (MS - Free Report) also pushed past expectations in its Q3 earnings report this morning, with $1.17 per share well ahead of the $1.00 expected and the 93 cents per share from the year-ago quarter. Revenues of $9.87 billion outperformed estimates by 3.6% and notably above the $9.2 billion a year ago. Shares are up 3.5% in today’s pre-market, but still have a ways to go for break-even on the year. For more on MS’s earnings, click here.

Another impressive Q3 earnings report came from U.S. healthcare giant UnitedHealthcare (UNH - Free Report) , a Zacks Rank #2 (Buy) stock with a Style Score of A. Earnings of $3.41 per share topped the $3.30 expected (including one-time items) on sales of $56.56 billion which outpaced the $56.34 in the Zacks consensus, UnitedHealthcare shares are up 18% year to date, and another 2.2% ahead of today’s market open. For more on UNH’s earnings, click here.

And Johnson & Johnson (JNJ - Free Report) put up better-than-expected results in its quarterly report — $2.05 per share on the bottom line amounted to a 2-cent beat, whereas $20.35 billion in revenues surpassed estimates by 2.2%, and higher than the year-ago quarter’s $19.65 billion for the health and hygiene retailer, which is also a Zacks Rank #2. The company also raised guidance for the quarter, though shares are only up a minuscule amount ahead of regular trading today. For more on JNJ’s earnings, click here.

Mark Vickery
Senior Editor

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