Nearly 1,500 U.S.-traded companies will be releasing quarterly earnings reports next week. The week after next, we expect reports from more than 2,000 publicly traded companies. Earnings season peaks over the next few weeks. Stay tuned.
Thursday Afternoon’s Reports
After markets closed on Thursday, CSX reported third-quarter revenue that was slightly above the consensus estimate and 8.3% below year-ago sales. However, the railroad operator missed the consensus earnings per share (EPS) forecast by a penny. The company’s operating ratio (expenses as a percentage of revenue) rose to 63.8% year over year. That’s not good. Shares traded up about 0.2% shortly before noon Friday.
Intuitive Surgical reported better-than-expected EPS but missed the consensus revenue estimate. Revenue was up 12% year over year, however. The medical robotics company also lowered the high end of its forecast for fiscal 2023 pro-forma gross margin from 69% to 68.5%. The low end remains at 68%. The stock traded down 4.1%.
Friday Morning’s Reports
Before U.S. markets opened on Friday, American Express beat consensus estimates on both the top and bottom lines. Spending growth boosted the results, but may also be a warning to investors who might wonder if consumer spending will be as robust going forward. The stock traded down by about 3.9% Friday morning.
Schlumberger beat the consensus EPS estimate by a penny and missed slightly the consensus revenue estimate. Year over year, the oilfield services giant’s revenue rose by more than 11%, and EPS was up 18.2%. Not good enough for investors. The stock traded down 4.2% Friday morning.
There are no notable earnings reports on the release calendar for Friday afternoon or Monday morning.
On Deck
3M, Cleveland-Cliffs, Halliburton, and RTX will report earnings late Monday or early Tuesday. Other firms reporting Tuesday morning include Archer Daniels Midland, Coca-Cola and Verizon.
Here is a look at three more earnings reports due for release Tuesday morning.
General Electric
Over the past 12 months, shares of General Electric Co. (NYSE: GE) have added nearly 51%, including a jump of almost 27% for the year to date.
Investors prospered from the company’s spin-off of its health care business in January. Now they are waiting to see what comes from the spin-off of the energy business. In August, GE announced the management team for GE Vernova after its planned spin-off in January 2024. The planned spin-off of the energy business is not expected to fetch the premium that followed the spin-off of GE Healthcare.
Analysts remain bullish on the stock. There are 11 Buy or Strong Buy ratings and eight Hold ratings among the 19 brokerages covering the stock. At a recent price of around $106.00 a share, the upside potential based on a median price target of $131.00 is 23.5%. At the high target of $141.00, the upside potential is 33%.
Third-quarter revenue is forecast at $15.69 billion, which would be down 6% sequentially and by 17.8% year over year. Adjusted EPS are forecast at $0.56, down 17.5% sequentially but up 60.0% year over year. For the 2023 fiscal year, analysts expect GE to report EPS of $2.34, down 10.9%, on sales of $64.08 billion, down 16.3%.
GE stock trades at 45.4 times expected 2023 EPS, 24.3 times estimated 2024 earnings of $4.37 and 18.4 times estimated 2025 earnings of $5.78 per share. The 52-week trading range is $66.75 to $117.96, and GE pays an annual dividend of $0.32 (yield of 0.30%). Total shareholder return for the past 12 months was 93.43%.
General Motors
General Motors Co. (NYSE: GM) has seen its share price drop by more than 11% over the past year, including a plunge of 24% in the past three months.
The 5-five-week-old strike against GM, Ford and Stellantis continues to weigh on new-car production and parts supplies. United Auto Workers President Shawn Fein has scheduled a press event for 4 p.m. ET Friday. The union has typically used these occasions to announce progress (or lack of same) with the automakers. GM, Ford and even Tesla have slowed spending on new assembly plants for EVs, for reasons that both GM and Ford say have nothing to do with the strike.
Analysts still like the company’s prospects. Of 25 brokers covering the stock, 15 have a Buy or Strong Buy rating and another nine rate it at Hold. At a share price of around $30.00, the upside potential based on a median price target of $43.00 is 43.3%. At the high price target of $90.00, the upside potential is 200%.
Third-quarter revenue is forecast at $43.25 billion, down 3.3% sequentially but up 3.2% year over year. Adjusted EPS are forecast at $1.84, down 3.5% sequentially and by 18.2% year over year. For the 2023 fiscal year, consensus estimates call for EPS of $7.49, down 11.3%, on revenue of $169.91 billion, up 8.4%.
GM stock trades at 4.0 times expected 2023 EPS, 4.3 times estimated 2024 earnings of $6.85 and 4.2 times estimated 2025 earnings of $7.08 per share. The 52-week trading range is $29.06 to $43.63. GM pays an annual dividend of $0.36 (yield of 1.22%). Total shareholder return for the past year was negative 10.59%.
NextEra Energy
Shares of regulated electricity generator NextEra Energy Inc. (NYSE: NEE) have declined by about 29% over the past 12 months. The stock has plunged by nearly 23% in the past month.
Rising interest spooked investors after Next Era’s renewable energy limited partnership lowered its growth expectations through 2026. Higher interest costs jeopardize funding for new projects. Thursday’s decline in solar equipment stocks underscored the cloudy outlook for new solar projects. Investors have been selling the news, none of which has been good.
Of the 21 ratings on NextEra stock, 16 are Buy or Strong Buy. The other five analysts rate the stock a Hold. Perhaps they have yet to get the memo. At a price of around $52.00 a share, the upside potential based on a median price target of $72.00 is about 27.8%. At the high price target of $102.80, the implied gain is nearly 98%.
Third-quarter revenue is forecast to come in at $7.18 billion, flat sequentially but up 6.8% year over year. Adjusted EPS are forecast at $0.88, down 2.6% sequentially and up a penny year over year. For the 2023 fiscal year, current estimates call for EPS of $3.12, up 7.7%, on sales of $25.72 billion, up 22.7%.
NextEra shares trade at 16.7 times expected 2023 EPS, 15.3 times estimated 2024 earnings of $3.40 and 14.2 times estimated 2025 earnings of $3.66 per share. The stock’s 52-week range is $47.15 to $88.61, and NextEra pays an annual dividend of $1.87 (yield of 3.57%). Total shareholder return over the past 12 months was negative 24.35%.
Originally published at 24/7 Wall St.
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