The Zacks Analyst Blog Highlights: Intel, UnitedHealth Group, Johnson & Johnson, JPMorgan Chase and Goldman Sachs - Press Releases
For Immediate Release
Chicago, IL – July 20, 2015 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include theIntel Corp (INTC), UnitedHealth Group Inc. (UNH), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM) and Goldman Sachs Group, Inc. ( GS).
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Here are highlights from Friday’s Analyst Blog:
Dow 30 Stock Roundup
The Dow notched up strong gains during a week after Greece and its creditors finally arrived at an agreement. Stocks ended higher on Monday after Greece and its creditors struck a deal for a bailout program. The blue-chip index gained on Tuesday powered by gains in energy shares amid a rise in oil prices.
Stocks edged lower on Wednesday after anti-austerity clashes erupted ahead of the Greek parliamentary vote. The Dow moved up on Thursday after the Greek government approved austerity measures to secure a bailout package from its creditors. The Dow has gained 2% during the first four trading days.
Last Week’s Performance
Stocks ended higher on Monday after Greece and its creditors struck a deal for a bailout program. Eurozone leaders agreed on a bailout deal for the debt-laden country in return for tougher policy overhauls and pension reforms. The Dow Jones gained 1.2% or 217.27 points.
To seal “Greekment,” Greece needs to undertake a series of austerity measures. Eurozone leaders agreed to give Greece new bailout aid of about 86 billion euros, provided Greece implements such austerity measures. The deal needs to be approved by national parliaments including Greek parliament ahead of the formal negotiations on financial aid through the European Stability Mechanism.
The tentative deal to bailout Greece boosted European equity markets. In addition to the European markets, China’s stock market also advanced for the third straight day. The benchmark Shanghai Composite Index gained 2.4% on Monday.
The blue-chip index gained 0.4% on Tuesday powered by gains in energy shares amid a rise in oil prices. Energy shares advanced due to rise in oil prices. Initially, oil prices took a beating after Iran reached a nuclear agreement with six world powers including the U.S.
However, crude oil prices recovered after it became apparent that Iran will take several months to ramp up its production to previous levels. Additionally, it will take around two months for the U.S. to get congressional approval for the pact.
Additionally, gains in biotech stocks lifted the healthcare sector, eventually boosting the broader markets. Meanwhile, investors kept an eye on second quarter earnings results and June’s disappointing retail sales numbers for clues on the timing of a rate hike. Contrary to estimates, retail sales declined 0.3% in June.
Stocks edged lower on Wednesday after anti-austerity clashes erupted ahead of the Greek parliamentary vote. Greece will vote on austerity measures that will help the debt-laden country secure a bailout package from its lenders. The vote also determines whether Alexis Tsipras can hold his government together. However, the Dow declined a meager 0.02%.
Meanwhile, in her testimony before Congress, Federal Reserve Chairwoman Janet Yellen said she expects the U.S. economy to strengthen and the central bank to hike interest rates “at some point this year.” PPI increased 0.4% in June, exceeding the consensus estimate of a 0.2% increase. Industrial production increased 0.3% in June after declining 0.2% in May.
The blue chip index gained 0.4% on Thursday after the Greek government approved austerity measures to secure a bailout package from its creditors. Approval for tougher policy overhauls and pension reforms came in despite violent protests by anti-austerity demonstrators ahead of the Greek parliamentary vote.
Eurozone finance ministers said: “We reached today a decision to grant in principle a 3-year ESM stability support to Greece, subject to the completion of relevant national procedures.” Additionally, the European Central Bank (ECB) President Mario Draghi said that the central bank will give more aid to Greece. Draghi was confident that the cash-strapped country will be able to make a debt payment of 4.2 billion euros to the ECB on Jul 20.
Meanwhile, the Federal Reserve Chairwoman Janet Yellen concluded her two-day testimony to the Senate Banking Committee by saying that she doesn’t want the inflation rate to linger below the target rate of 2%.
Components Moving the Index
Intel Corp (INTC) reported first quarter earnings including intangibles amortization and restructuring charges of 55 cents, which were ahead of the Zacks Consensus Estimate of 50 cents. Shares gained 1.4% in after-hours trading on Wednesday.
Intel’s reported revenue was $13.20 billion, in line with the guidance range of $13.2 billion (+/-$500 million) and topping the Zacks Consensus Estimate of $13.04 billion. The gross margin for the quarter was 62.5%, up 203 basis points (bps) sequentially and down 196 bps year over year, better than the guidance of 62% at the mid-point.
Intel guided to third-quarter revenue of around $14.3 billion (+/-$500 million), up 8.4% sequentially and down 1.7% from the Sep quarter of 2014 (slightly better than the consensus estimate of $14.08 billion).
UnitedHealth Group Inc. (UNH) reported second-quarter 2015 earnings of $1.64 per share, beating the Zacks Consensus Estimate of $1.57. Earnings soared 15.5% year over year.
UnitedHealth posted revenues of $36.3 billion, up 11.3% year over year and surpassed the Zacks Consensus Estimate of $35.7 billion. The increase was backed by business expansion in both health care benefits and health care services.
The second-quarter consolidated medical care ratio decreased 20 basis points (bps) year over year to 81.4%.Total operating cost came in at $33.4 billion, up 11.3% year over year, primarily due to higher medical and operating costs.
The insurer expects 2015 revenues of approximately $154 billion, up $11 billion from the previous outlook. Earnings are now expected in the range of $6.25 to $6.35 per share, up from $6.15 to $6.30.
Johnson & Johnson ’s (JNJ), second-quarter 2015 earnings (excluding special items) came in at $1.71 per share, a couple of cents above the Zacks Consensus Estimate of $1.69 per share but 3.9% below the year-ago earnings.
Second quarter sales of $17.8 billion were just above the Zacks Consensus Estimate of $17.7 billion. Revenues, however, declined 8.8% from the year-ago period.
While operational results declined 0.9%, currency fluctuations had a negative impact of 7.9%. Including one-time items, Johnson & Johnson reported second quarter earnings of $1.61 per share, up 6.6% from the year-ago period.
J&J raised its earnings outlook for 2015 to $6.10 - $6.20 per share (guidance provided with first quarter results: $6.04 - $6.19 per share). The Zacks Consensus Estimate currently stands at $6.14 per share.
JPMorgan Chase & Co. (JPM) reported earnings of $1.54 per share, crushing the Zacks Consensus Estimate of $1.44. The bottom line also improved 5.5% over the year-ago earnings of $1.46 per share.
Most impressively, legal expenses were as low as $291 million, which lent significant support to earnings. Managed net revenue of $24.5 billion in the quarter was down 3% from the year-ago quarter. However, it compared favorably with the Zacks Consensus Estimate of $24.4 billion.
The Goldman Sachs Group, Inc. (GS) reported second-quarter 2015 earnings per share of $1.98, as compared with the year-ago figure of $4.10. Notably, results included $1.45 billion in net provisions for mortgage-related litigation and regulatory matters.
Excluding such provisions, earnings per share came in at $4.75. The Zacks Consensus Estimate was $3.70. Goldman’s net revenue inched down 1% year over year to $9.1 billion in the quarter under review. However, revenues outpaced the Zacks Consensus Estimate of $8.8 billion.
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INTEL CORP (INTC): Free Stock Analysis Report
UNITEDHEALTH GP (UNH): Free Stock Analysis Report
JOHNSON & JOHNS (JNJ): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
GOLDMAN SACHS (GS): Free Stock Analysis Report
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