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Q1 Earnings: BA, NOC & More

Zacks Equity Research
Autodesk's (ADSK) first-quarter fiscal 2019 results benefit from strong growth in product subscriptions and surging maintenance-to-subscription program.

A day ago, after Caterpillar CAT ushered in a stellar Q1 earnings report, pre-market futures were zooming up. Q1 earnings season in general was going along swimmingly, and it looked like Tuesday trading was off to the races.

Well, a funny thing happened in CAT’s Q1 conference call — CEO Jim Umpleby was quoted as saying Q1 represented a “high water mark” for Caterpillar’s 2018 earnings, which caused a hasty reassessment among market participants, and trading in the markets, the Dow in particular, sank like a stone.

For sure, Mr. Umpleby has learned a valuable lesson about what to say (or what NOT to say) in his company’s conference call, but Caterpillar remains within a strong cycle overall. The stock currently carries a Zacks Rank #2 (Buy) rating and a Zacks Style Score (Value, Growth, Momentum) of B.

What we caution investors to learn from this is something akin to “all that glitters is not gold.” Meaning although a company may provide excellent top and bottom-line quarterly numbers, market sentiment — especially when economic realities are making traders a bit more sensitive these days, such as a 3% 10-year bond yield pointing toward higher interest rates in the future — may turn on a dime. And what we should take away is the understanding that jumpiness among market participants is a reality; stick with your strategy to find light at the end of the tunnel, and don’t give into hysteria.

So, with that in mind, here are some highlights from a few of the big names reporting earnings results ahead of Wednesday’s opening bell:

The Boeing Company BA is trading up 2.74% in today’s pre-market on solid top and bottom-line beats this morning. Earnings of $3.64 per share outpaced the $2.59 in the Zacks consensus, and revenues in the quarter of $23.38 billion surpassed the $22.32 billion analysts were expecting. Beating estimates is nothing new for Boeing: its trailing 4-quarter earnings beat average is above 20%. Also in the quarter, Boeing bought back $3 billion worth of company shares and paid out a total of $1 billion in dividends. For more on BA’s earnings, click here.

Keeping in the Aerospace arena a moment, Northrop Grumman NOC also easily topped earnings and revenue estimates in its Q1: $4.21 per share on $6.74 billion in revenues beat the $3.63 per share and $6.58 billion, respectively. Its Aerospace division rose 10% year over year, and this marks at least the fifth straight earnings beat for the Zacks Rank #2, Style Score B-rated company. For more on NOC’s earnings, click here.

One more from this sector: General Dynamics GD, a Zacks Rank #1 (Strong Buy) company, posted a 7% beat on the bottom line to $2.65 per share. Revenues of $7,535 million was a smidge under Zacks consensus — so call this a mixed earnings report — on revenue growth of 1.3% year over year. For more on GD’s earnings, click here.

Also, Comcast CMCSA reported earnings ahead of the opening bell today, with 62 cents per share and $22.79 billion in the quarter outperforming the 59 cents per share and $22.72 billion expected, up 10.7% on the company’s top line. Internet customer net adds grew 379K, partially augmented by a loss of 96K Video customers. The company also formally announced its big for the 61% of Sky Communications it doesn’t already own. For more on CMCSA’s earnings, click here.


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Northrop Grumman Corporation (NOC) : Free Stock Analysis Report
 
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