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Key Morning Earnings for May 2: DO, HO, RACE, SYY

As Q1 earnings season continues, more and more companies are starting to post their earnings results. On Monday, four big names in the oil, automobile, and food services industries reported their quarterly earnings before the bell. Let’s take a look.

Diamond Offshore Drilling, Inc. DO

The oil and gas drilling company reported strong first quarter results. Adjusted earnings per share came in at $0.64, comfortably beating the Zacks Consensus Estimate of $0.28 per share. Total revenue of $470.5 million topped our consensus estimate of $415 million but missed the year-ago figure of $620.1 million. Diamond Offshore’s Q1 performance can be attributed to its ongoing efforts to improve cost structure.

Helmerich & Payne, Inc. HP

An oil and gas exploration and production company, Helmerich & Payne reported disappointing second quarter results. Earnings per share came in at a loss of $-0.24, wider than the Zacks Consensus Estimate of a loss of $-0.22. Revenues of $438.2 million beat our consensus estimate of $393.7 million, but reflected over a 50% decline from the year-ago period. The company’s underperformance came amid sharply lower drilling activity.

Ferrari NV RACE

The luxury sports car maker reported better than expected Q1 earnings. Earnings per share came in at $0.45, beating the Zacks Consensus Estimate of $0.31 per share. Revenues for the quarter were $744.6 million. Results were boosted by better margins and higher shipment numbers, with total shipments surging 15% year-over-year to 1,882. Thanks to this strong momentum, Ferrari raised its 2016 adjusted EBITDA to $918 million (€800 million) from $884 million (€770 million).

Sysco Corp. SYY

Sysco, the largest North American food distributor, reported impressive third quarter results. Adjusted earnings of $0.46 per share surpassed the Zacks Consensus Estimate of $0.42 per share by 9.5% and increased 15% year-over-year. Revenues of $12 billion edged past the consensus estimate of $11.91 billion by 0.7%. Sysco’s focus on acquisition, margin improvement, and volume growth offset by unfavorable currency impact of 1.0% led to its strong performance.

Energy Sector Scorecard (as of 5/2/16)

Including all of this morning’s reports, we now have Q1 results from 72.7% of the sector’s market capitalization in the S&P 500. Total earnings for these Energy sector companies are down -96.3% from the same period last year on -29.5% lower revenues, with 52.6% beating EPS estimates and 57.9% coming ahead of revenue expectations. This is weaker performance than we have seen from the same group of Energy companies in other recent periods.

For the S&P 500 as a whole, we now have Q1 results from 314 index members that combined account for 73.1% of the index’s total market capitalization. Total earnings for these companies are down -7.3% from the same period last year on -2.4% lower revenues, with 71.7% beating EPS estimates and 57.6% coming ahead of revenue estimates. Relative to other recent periods, this is weak earnings and revenue growth from these 310 index members. But positive surprises are more numerous relative to other recent periods, both for earnings as well as revenues.

Looking at Q1 as a whole, combining the actual results from the 314 S&P 500 members that have reported with estimates for the still-to-come 186 index members, total earnings are expected to be down -7.3% on -0.9% lower revenues – the 4th quarter in a row of earnings declines for the index. Estimates for 2016 Q2 have started to come down, with total earnings for the S&P 500 index now expected to be down -5.5% from the same period last year.

For a more detailed look at the Q1 earnings season, check out our weekly Earnings Preview report at this link - http://www.zacks.com/commentary/79580/why-are-more-companies-beating-q1-estimates

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SYSCO CORP (SYY): Free Stock Analysis Report
 
HELMERICH&PAYNE (HP): Free Stock Analysis Report
 
DIAMOND OFFSHOR (DO): Free Stock Analysis Report
 
FERRARI NV (RACE): Free Stock Analysis Report
 
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