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Strong Earnings Results for Q1 2019

Zacks Equity Research

Social media staple Twitter TWTR, a Zacks Rank #3 (Hold) stock prior to its earnings report released before today’s opening bell, easily outpaced expectations on both top and bottom lines: 37 cents per more than doubled the 15 cents in the Zacks consensus. Revenues of $787 million topped the $775 million analysts had expected.

Twitter has never missed an earnings estimate in its entire trading history (calendar Q3 2015). And for the second time, Twitter has reported a new metric: Monetizable Daily Active Users (mDAUs), which will replace Monthly Active Users (MAUs) henceforth. 134 million mDAUs was up from the previous quarter’s 126 million. Shares of TWTR are +6.7% in early trading.

Dow component Procter & Gamble PG outperformed expectations slightly on both top and bottom lines this morning, with $1.06 per share beating by 2 cents on sales of $16.46 billion which surpassed expectations by 0.33%. Yet shares are tepid in pre-market trading, down 2% at this hour. Shares also have thus far underperformed  the S&P 500 year to date, as well. 

United Technologies UTX, another Dow component and Zacks Rank #3 stock, surged ahead of expectations in its Q1 earnings report this morning: $1.91 per share versus $1.75 estimate, on $18.37 billion in revenues that beat the Zacks consensus by 1.64% and well beyond the $15.24 billion reported a year ago.

Aerospace was very strong in the quarter, as were Service revenues and attractive free cash flow. Shares have outperformed the S&P 500 year to date, and are up 2.3% in early trading. 

After the bell today, we look for fresh numbers on New Home Sales. Our last two domestic real estate reads were disappointing, both yesterday’s Existing Home Sales at 5.21 million — lower than the 5.35 million expected and the 5.48 million in the previous month — and Friday’s Housing Starts and Building Permits down both from expectations and sequentially.

Today’s New Home Sales report for March is expected at 10am. For February, we saw 667K new sales nationwide; current estimates reside around 656K. This metric peaked in the past 5 years back in November 2017, when the total number of new sales topped 700K. Last month’s number set a new one-year high; we shall see if this is sustained when other similar housing reads have cooled of late.

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