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Q3 Earnings Bonanza: GM, MRK, MA & More

Mark Vickery

Tuesday, October 29, 2019


General Motors GM, grappling with a United Auto Workers (UAW) strike that brought a billion-dollar negative impact to its just-reported Q3 earnings report (amounting to 52 cents per share), managed to impress investors this morning with beats on both top and bottom lines. Earnings of $1.72 per share easily surpassed the $1.18 analysts were expecting. Revenues of $35.47 billion were well ahead of the $34.15 billion anticipated.


GM has only missed estimates twice in the last five years, so even with the workers’ strike headwinds it’s not too much of a surprise the company beat on the bottom line. But $3 billion in earnings from North America — with crossover vehicles establishing a new quarterly record — is stellar performance for the American car-maker. That said, based on UAW issues, the company expects a $2.9 billion impact, and has such lowered earnings guidance to $4.50-4.80 for full-year 2019. The Zacks consensus had been $5.92 per share.


The company had been a Zacks Rank #3 (Hold) going into its earnings release, yet shares are up 2.2% in today’s pre-market. GM stock has been up and down year to date, but has traded within a range between $32 and $41 per share. With today’s news, GM is climbing back up toward the higher end of this range.


Zacks Rank #3-rated Pfizer PFE also outperformed on its top and bottom lines — 75 cents per share versus 63 expected (78 cents in the year-ago quarter), on $12.68 billion which bettered the Zacks consensus by 4.38% ($13.30 billion a year ago). The company has raised full-year guidance as well, and shares — which had only gained 14.6% year to date, beneath the S&P 500’s 21.3% — are up 3.14% in today’s pre-market. For more on PFE’s earnings, click here.


Keeping with Big Pharma another moment, Zacks Rank #3-rated Merck MRK clobbered earnings estimates — $1.51 per share versus $1.25 expected, and $1.19 in the year-ago quarter — on $12.40 billion in revenues, a solid improvement on the $10.79 billion reported a year ago. Its cancer drug Keytruda brought in an incredible $3 billion in the quarter, and the company has raised forecasts in its full-year numbers. Merck had only gained 7.6% yeat to date, but is up another 2% in today’s early trading.


Mastercard MA also outdid expectations on both top and bottom lines — $2.15 per share versus $2.01 ($1.78 a year ago), on $4.47 billion in revenues, up nearly 1% and above last year’s $3.90 billion. These positive results indicate the American consumer is still spending money, obviously a positive for the U.S. economy. Shares are up 1% in pre-market activity, and +46.3% year to date. For more on MA’s earnings, click here.


In other news, the Case-Shiller home prices for August — clearly a lagging indicator — came in-line with expectations at +3.2%. Top cities in the 20-city composite for home sales growth were Phoenix (+6.3%), Charlotte (+4.5%) and Tampa (+4.3%). The worst performing cities for the month were Los Angeles (-1%), New York (-0.9%) and Seattle (-0.7%).


Mark Vickery

Senior Editor


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