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Busiest Day Of The Q3 Earnings Season

Welcome to the fully open spigot of Q3 earnings season. It is the single busiest day of the quarter, and after the bell we will see results from GOOGL, MSFT, INTC and others. Plenty of S&P 500 companies have already reported earnings before the opening bell today, and if that’s not enough, we’ve also got tons of economic data and newsworthy financial information to get to. So let’s get started:

European Central Bank (ECB) President Mario Draghi has extended the quantitative easing program that has helped foster the Eurozone back to good health. Euro buybacks, which were scheduled to have expired in December, will now taper off beginning in January and continue through September of next year.

Buybacks will be cut in half to 30 billion euros per month. As a result, we see the euro fall in value, but not drop out of its range. In his statement, Draghi expressed that risks to growth in the Eurozone are “broadly based” and the economic expansion is “solid.”

Initial Jobless Claims also stayed range-bound at 233K last week, up 10K from the slightly revised 223K the previous week. Continuing claims stayed even at 1.893 million. A few weeks ago, we saw a spike in initial jobless claims following the double-whammy of Hurricanes Harvey and Irma, but weekly claims have reverted back to the favorable 225-250K range we’ve seen for the past couple years.

Wholesale inventory rose 0.3% in its latest read, while Retail inventory fell 1%. Growth via inventory increases is widely considered one of the weakest economic growth metrics, whereas drawdowns on inventory make room for new products to hit the market. Consider this report another modest positive for the current U.S. economy.

Q3 Earnings, Continued

Twitter TWTR shares are spiking up 12% in today’s pre-market following a better-than-expected Q3 earnings report: 10 cents per share topped the 7 cents we were expecting, whereas $589.6 million in quarterly sales modestly outpaced the $589.3 million in the Zacks consensus. Monthly active users grew 4% to 330 million, as the company has taken steps to clean up its operations in light of allegations of abuse of the platform. CEO Jack Dorsey is also pointing Twitter in the direction of video streaming to increase usage going forward.

Ford Motor Company F followed a recent strong Q3 report from GM by beating estimates on both top and bottom lines this morning: earnings of 43 cents per share outperformed the 32 cents expected in the Zacks consensus. Quarterly revenues of $33.6 billion improved over the $32.9 billion estimate. The automotive giant also raised the lower end of its full-year guidance from $1.65 per share to $1.75, and recorded an all-time high in pre-tax profit from its Asia-Pacific region. Shares went up 1.6% on the report.

United Parcel Service UPS reported $1.45 per share in its quarterly report this morning, beating estimates by a penny. Revenues came in strongly ahead of expectations: $15.98 billion surpassed the $15.61 billion in the Zacks consensus. Though UPS reported a $50 million cost as a result of the hurricanes, the company also raised the lower end of earnings guidance for full-year 2017. UPS also looks forward to a potential record holiday season in Q4, though pre-market trades have sent shares into slightly negative territory.

However, biopharma major Celgene Corp. CELG shares have fallen more than 16% in today’s pre-market on quarterly revenue numbers that came in far short of expectations. Though profits beat estimates, $1.91 per share versus $1.88 anticipated, $3.29 billion in Q3 sales missed the $3.42 billion estimate. Full-year profit and revenue guidance has been lowered, as well as long-term targets to year 2020.


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