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Q3 Earnings Season Rolls On: Some Hits, Some Whiffs

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Friday, October 19, 2018

With little on the docket today regarding new economic data besides calendar Q3 earnings reports — Existing Home Sales come out after the market opens today, with expectations that September will be slightly weaker than August — then earnings reports is where we shall focus. Pre-market trading is bringing indexes solidly back into the green, especially the Dow, which may open up triple digits this morning.

That said, early morning quarterly earnings releases are decidedly a mixed bag: some hits, some strikeouts. The main thing to keep in mind is the pitches will keep coming — for this morning, next week, and in the following few weeks afterward. By Thanksgiving, the game will have been played. For insight on how Q3 Earnings Season is going so far, check Zacks Director of Research Sheraz Mian’s latest article: Is Optimism About Earnings Still the Watchword?

Health and home care giant Procter & Gamble (PG - Free Report) demonstrated strong organic growth in its fiscal Q1 2019, posting $1.12 per share versus $1.09 expected. Quarterly sales beat estimates slightly to $16.69 billion, up a tad from year-over-year revenues. P&G has not posted a negative earnings surprise in 4 full years, yet the Zacks Rank #4 (Sell)-rated company (ahead of today’s earnings report) had been trading down 12.7% year to date. However, this morning’s beat has prodded the shares up 5.8% in the pre-market. For more on PG’s earnings, click here.

Industrial conglomerate Honeywell (HON - Free Report) also beat on both top and bottom lines this morning, putting up $2.03 per share on $10.76 billion, surpassing the $1.99 per share and $10.73 billion expected. The company cited particular strength in its Aerospace unit, up 10% year over year. The Zacks Rank #3 (Hold) stock is trading up 2% since the earnings release. For more on HON’s earnings, click here.

However, North American railroad operator Kansas City Southern (KSU - Free Report) missed on both revenues and earnings this morning, down a penny from expectations to $1.57 per share on $699 million which came in short by 1.15% of the Zacks consensus. Though the company demonstrated growth year over year, this is Kansas City Southern’s second earnings miss in its last three quarters. For more on KSU’s earnings, click here.

U.S. bank State Street Corp. (STT - Free Report) also underperformed in its Q3 report this morning, missing earnings estimates by a penny to $1.87 per share on $2.95 billion in revenues — down from the even $3 billion expected. For the Boston, MA-based Zacks Rank #3 company, this is its first earnings miss in three years. For more on STT’s earnings, click here.

But international branding major V.F. Corp. (VFC - Free Report) outpaced estimates in its fiscal Q2 2019 report, posting $1.43 per share which beat by a solid dime and was notably higher than the $1.23 per share from the year-ago quarter. Sales of $3.91 billion in the September quarter beat estimates by more than a full percentage point, and above last year’s $3.51 billion in the same quarter. The company’s stock is up nearly 18% year-to-date, and +1% again today ahead of the opening bell. For more on VFC’s earnings, click here.

Mark Vickery
Senior Editor

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