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Q3 Earnings' Smooth Sailing Continues

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Wednesday, October 27, 2021

Our Q3 earnings acceleration continues ahead of the opening bell this Hump Day, with several household-name companies reporting quarterly results. We also see an important economic print ahead of the bell, so we’ll start there:

Durable Goods Orders for the month of September brought a negative headline, -0.4%, from a downwardly revised +1.3% the previous month. However, this beat expectations for last month of around -1.0%. Non-defense aircraft and autos & auto parts led the down-trend for the month in durables. This is the first decline in this metric in the past five months.

Boeing BA wrote down a $183 million charge on additional costs related to its 787 Dreamliner in the aircraft maker’s Q3. As a result, its bottom line missed by a wide margin — -60 cents per share versus the Zacks consensus -17 cents — on $15.28 in revenues that was well off the pace of estimates. Yet shares of Boeing are +1.5% in today’s pre-market; +3.5% year to date.

Automatic Data Processing ADP outperformed on both top and bottom lines for its fiscal Q1, with earnings of $1.65 per share on revenues of $3.83 billion beating estimates by +10.7% and +1.9%, respectively. Shares are up +1.4% on the news as the stock keeps pace with the S&P 500 year to date; next week the company brings us new private-sector jobs totals. For more on ADP’s earnings, click here.

General Motors GM was mixed in its Q3 report this morning, beating nicely on the bottom line, $1.52 per share versus $1.07 expected, on revenues of $15.28 billion which came in well below the Zacks consensus. Chip shortages have hit the automaker, as expected, but the company has kept its full-year guidance toward the high end of estimates. Ford F reports this afternoon.

McDonald’s MCD posted another nice quarter, beating on the bottom line by +12% to $2.76 per share and sales by +3% to $6.2 billion — well above the $5.42 billion the company made in the year-ago quarter. Shares are up nicely in the pre-market; they have lagged the S&P 500 year to date. For more on MCD’s earnings, click here.

Coca Cola KO also easily surpassed estimates during today’s early session, with a +12% beat on earnings to 65 cents per share and a +4.7% beat on revenues to $10.04 billion. Again, shares have not performed well so far in 2021, but are up +2.6% in pre-market trading. For more on KO’s earnings, click here.

Bristol Myers-Squibb BMY has also surpassed estimates on both earnings and sales in its Q3 report this morning, with $2.00 per share on $11.62 billion in revenues topping the $1.91 per share and $11.55 billion expected, respectively. Shares are still down year to date, up only marginally on the news. For more on BMY’s earnings, click here.

We’re modestly positive in pre-market activity, with the Dow +40 points, the S&P 500 +2 points and the Nasdaq +25. Plenty of data to process, and this may sift out certain performances in favor of others, but the general tone remains healthy and strong moving forward. Even semiconductor shortage headwinds look to be not quite the bugaboo some analysts were fearing.

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