These 3 Companies Recently Lifted Guidance
The Q3 earnings cycle is in full swing, with various companies reporting daily. Plenty of companies have posted better-than-expected results so far, helping to kick the period off positively and lifting sentiment.
So far, several companies have lifted guidance, including UnitedHealth UNH, AT&T T, and PPG Industries PPG. There are various positive reasons why a company raises its outlook, perhaps reflecting increased demand, successful cost-saving measures, or favorable market conditions, to list a few.
What was there to like in each respective release? Let’s take a closer look.
UnitedHealth
UNH shares enjoyed a solid run into the report over the last month before slightly cooling post-earnings, as shown below. The company exceeded the Zacks Consensus EPS Estimate by 3.6% and posted a revenue surprise of 1%, reflecting year-over-year growth rates of 13% and 14%, respectively.
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Growth was driven by an expansion of offered services and growth within Optum, with UNH raising its FY23 adjusted net earnings outlook to a band of $24.85 – $25.00 per share. In addition, the company returned more than $11.5 billion in dividends and share repurchases to investors throughout the period.
The company has boasted a shareholder-friendly, growing its dividend payout by 16% annualized over the last five years.
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UnitedHealth has been a consistent earnings performer as of late, exceeding both Zacks Consensus EPS and Sales Estimates in three consecutive quarters.
AT&T
AT&T shares faced adverse price action following a summer report concerning lead-covered cables that the company left behind. Nonetheless, shares are up 17% since their bottom following the news, with the recent favorable print causing more buyers to jump in.
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The company posted earnings of $0.64 per share, narrowly exceeding the Zacks Consensus EPS Estimate and modestly lower than the year-ago figure. Quarterly revenue totaled $29.9 billion, improving 1% year-over-year and driven by solid 5G and fiber subscriber growth.
Free cash flow also positively surprised, totaling $5.2 billion and growing 33% from $3.9 billion. Given the favorable quarter, AT&T boosted its full-year free cash flow guidance to roughly $16.5 billion, above prior views of $16 billion. Adjusted EBITDA guidance was also improved, with full-year growth of 4% now expected vs. 3% previously.
PPG Industries
PPG Industries posted record Q3 sales and adjusted EPS – quarterly revenue totaled $4.6 billion and was fractionally above expectations, whereas adjusted EPS of $2.07 beat our consensus expectation by 6%. Shares have continued to slide following the release, down 16% over the last three months.
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PPG raised its full-year 2023 adjusted EPS guidance, expecting adjusted earnings in a band of $7.58 - $7.64 per share. Both of the company’s segments showed improved profitability throughout the period, driven by lowered input costs and higher selling prices.
It’s worth noting that the company’s shares are trading below their respective 50 and 200-day daily moving averages, reflecting selling pressure. And given the recent negative reaction to the quarterly release, shares could continue heading lower.
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Bottom Line
Earnings season has taken center stage, with a flurry of reports scheduled to come in future weeks. So far, the period has started off positively, undoubtedly to the likes of investors.
So far, UnitedHealth UNH, AT&T T, and PPG Industries PPG have revealed quarterly results, with each upping guidance following better-than-expected prints.
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AT&T Inc. (T) : Free Stock Analysis Report
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