We are in the middle of the second-quarter 2022 earnings season, with as many as 964 companies slated to report their quarterly financial numbers this week. So far, earnings results have come in better than expected and corporate America is yet to reveal any major signal regarding a near term recession. This was one of the primary reasons for an impressive Wall Street rally in July.
Here, we have selected five companies that are slated to report earnings results after the closing bell today. The combination of a favorable Zacks Rank and a possible earnings beat should drive their share prices. These companies are Lumen Technologies Inc. LUMN, Albemarle Corp. ALB, Atmos Energy Corp. ATO, Plains All American Pipeline L.P. PAA and Host Hotels & Resorts Inc. HST.
Q2 Earnings Results So Far
As of Jul 29, 279 companies within the S&P 500 Index reported their financial numbers. Total earnings of these companies are up 4.7% year over year on 14.1% higher revenues, with 75.6% beating EPS estimates and 65.6% beating revenue estimates. Our latest projection is that for the second quarter as a whole, total earnings of the S&P 500 Index will rise 5.7% year over year on 12.3% higher revenues.
Our Top Picks
Five companies will report earnings results today after the market closes. Each of these stocks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and has a positive Earnings ESP. You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the combination of a Zacks Rank #3 (Hold) or better and a positive Earnings ESP, the chance of an earnings beat is as high as 70%. These stocks are anticipated to appreciate after their earnings releases. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The chart below shows the price performance of our five picks in the last quarter.
Image Source: Zacks Investment Research
Lumen Technologies is expected to benefit from its growth initiatives in the Enterprise and Quantum Fiber business lines. LUMN aims to transform its business operations through product evolution and digitization of customer interactions.
Lumen’s fiber and IP-based network capacity position it well to support customers and enhance shareholders' value. Opportunity for revenue growth from market dynamics such as growth in security, IoT, Big Data, 5G, AI and the demand for edge computing bode well.
Zacks Rank #1 Lumen has an Earnings ESP of +1.73%. The Zacks Consensus Estimate for current-year earnings improved 1.2% over the last 7 days. LUMN recorded earnings surprises in three out of the last four reported quarters, with an average beat of 17.6%.
Albemarle should gain from long-term growth in the battery-grade lithium market. ALB is expected to benefit from its actions to boost its global lithium derivative capacity. Albemarle will also benefit the Rockwood acquisition synergies. The buyout has enhanced diversity across end markets. Albemarle also remains focused on executing its cost-reduction program.
ALB’s cost saving actions are also expected to support margins in 2022. The company also remains committed to boosting shareholder returns leveraging strong cash flows. It remains focused on maintaining its dividend payout. Albemarle has ample liquidity to meet its short-term debt obligations.
Zacks Rank #2 ALB has an Earnings ESP of +8.38%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 3.2% over the last 30 days. Albemarle recorded earnings surprises in the last four reported quarters, with an average beat of 22.5%.
Atmos Energy continues to benefit from rising demand from its expanding customer base. ATO is planning to invest in the range of $13-$16 billion from fiscal 2022-2026 to increase the reliability of its pipelines and serve customers efficiently. Returns within a year of capital investment continue to boost Atmos Energy’s performance and allow it to pay regular dividends. ATO has enough liquidity to meet near-term debt obligations.
Zacks Rank #2 Atmos Energy has an Earnings ESP of +1.35%. It has an expected earnings growth rate of 8.2% for the current year (ending September 2022). The Zacks Consensus Estimate for current-year earnings improved 0.4% over the last 30 days. ATO recorded earnings surprises in three out of the last four reported quarters, with an average beat of 1.1%.
Plains All American Pipeline benefits from its wide spread Permian operation, cost-saving initiatives, joint ventures and assets divestiture that will support operations over the long term. PAA’s strong cash flow will help it to strengthen the balance sheet.
Expansion of existing pipelines and the addition of new pipeline projects in key regions are expected to drive its operations. Also, PAA has sufficient liquidity to meet its obligations. Units of the firm have outperformed the industry in the past month.
Plains All American Pipeline has an Earnings ESP of +4.51%. It has an expected earnings growth rate of 15.8% for the current year. The Zacks Consensus Estimate for current-year earnings improved 14.6% over the last 30 days.
Host Hotels & Resorts is poised to gain from its well-located properties in markets with strong demand drivers. HST also has a strong foothold in the Sunbelt region and the top 22 U.S. markets. Strategic acquisitions and value-enhancement initiatives are likely to aid long-term profitability.
The capital-recycling program and a strong balance sheet also augur well for Host Hotels & Resorts. Based on a healthy lodging recovery in the first quarter of 2022, HST announced the doubling of its quarterly dividend.
Host Hotels & Resorts has an Earnings ESP of +9.18%. It has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for current-year earnings improved 1.8% over the last 30 days. HST recorded earnings surprises in the last four reported quarters, with an average beat of 93.5%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Host Hotels & Resorts, Inc. (HST) : Free Stock Analysis Report
Plains All American Pipeline, L.P. (PAA) : Free Stock Analysis Report
Albemarle Corporation (ALB) : Free Stock Analysis Report
Atmos Energy Corporation (ATO) : Free Stock Analysis Report
Lumen Technologies, Inc. (LUMN) : Free Stock Analysis Report
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