Yahoo Finance Earnings Season Scorecard and Analyst Reports for Oracle, HSBC & RTX
Thursday, April 25, 2024
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features a real-time update on the Q1 earnings, in addition to the usual new research reports on 16 major stocks, including Oracle Corporation (ORCL), HSBC Holdings plc (HSBC) and RTX Corporation (RTX). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Q1 Earnings Season Scorecard
Including this morning's reports from Caterpillar and others, we now have Q1 results from 190 S&P 500 members or 38% of the index's total membership. Total earnings for these companies are up +1.1% from the same period last year on +3.5% higher revenues, with 77.9% beating EPS estimates and 58.9% beating revenue estimates.
The EPS beats percentage of 77.9% compares to 80% for this group of companies in the preceding period and high-low range of 88.9% and 66.3%, with a 5-year average of 79.3%.
The revenue beats percentage of 58.9% for this group of 190 index members compares to 63.2% in the preceding period and the high-low range of the preceding 20 quarters of 86.3% and 58.9%, with an average of 69.1%.
What this means is that at this stage in the Q1 reporting cycle, the revenue beats percentage for this group of 190 companies is at the lowest level in the last 5 years.
Looking at Q1 as a whole, combining the actuals for the 190 companies that have reported with estimates for the still-to-come companies, total earnings are now expected to be up only +2.4% on +3.9% higher revenues.
For the current period (2024 Q2), total S&P 500 earnings are expected to be up +9.6% from the same peirod last year on +4.7% higher revenues.
Estimates have been steadily going up since the quarter got underway, with Energy, Transportation and Finance as among the 7 Zacks sectors enjoying favorable revisions trend since the start of April.
Today's Featured Analyst Reports
Oracle shares have outperformed the Zacks Computer - Software industry over the year-to-date period (+10.2% vs. +6.1%). The company is gaining from the ongoing momentum across its cloud business, driven by the strong uptake of Oracle Cloud Infrastructure and Autonomous Database offerings. The solid adoption of cloud-based applications, comprising NetSuite Enterprise Resource Planning (ERP) and Fusion ERP bodes well.
Oracle’s Gen 2 Cloud is delivering better performance at a lower cost due to high bandwidth and low-latency RDMA networks. ORCL’s continued investment in cloud infrastructure positions it well for sustained growth in the dynamic software industry. The company’s share buybacks and dividend policy are noteworthy.
However, higher spending on product enhancements, especially toward the cloud platform amid increasing competition in the cloud domain, is likely to limit margin expansion.
(You can read the full research report on Oracle here >>>)
Shares of HSBC have outperformed the Zacks Banks - Foreign industry over the year-to-date period (+7.0% vs. +3.3%). The company’s strong capital position, higher interest rates, an extensive network and business restructuring initiatives will keep aiding it. HSBC’s efforts to improve market share in the Asia region will support financials in the long run, this will likely lead to a rise in near-term expenses. Because of its growth strategy and higher technology-related expenses, HSBC expects 2024 expense growth of 5%.
However, HSBC has already exited retail operations in the United States, Canada, France, New Zealand and Greece and is in the process of fully exiting Russia. In order to focus more on Asia, the company is set to acquire Citigroup’s wealth business in China. The current challenging macroeconomic backdrop is another major near-term headwind.
(You can read the full research report on HSBC here >>>)
Shares of RTX have outperformed the Zacks Aerospace - Defense industry over the past six months (+29.4% vs. -0.5%). The company ended first-quarter 2024 on a bright note, with both its sales and earnings surpassing their respective consensus estimate. RTX continues to receive ample orders from the Pentagon and its foreign allies for its wide range of combat-proven defense products.
A steadily recovering commercial air traffic is expected to bolster commercial OEM as well as commercial aftermarket sales for the company. RTX holds a solid financial position, which should enable it to make a successful share repurchase.
However, rising crude price tends to put cost pressure on airlines, and operating results of commercial OEM producers like RTX may be impacted. The company might also be affected if China enforces its announced sanctions against RTX’s missile and defense unit.
(You can read the full research report on RTX here >>>)
Other noteworthy reports we are featuring today include Eaton Corporation plc (ETN), Marsh & McLennan Companies, Inc. (MMC) and Chipotle Mexican Grill, Inc. (CMG).
Director of Research
Sheraz Mian
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Oracle (ORCL) Gains from Cloud Suite Adoption & Partnerships
Focus in Asia Region, Rates Aid HSBC (HSBC), High Costs Ails
Order Growth Continues to Aid RTX, Amid Jet Fuel Price Hike
Featured Reports
Wide Market Reach, New Product Development Aid Eaton (ETN)
Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.
Strategic Buyouts Aid Marsh & McLennan (MMC), Expenses Hurt
Per the Zacks analyst, numerous acquisitions help Marsh & McLennan expand geographically, boost current segments and develop new businesses. However, rising expenses remain a concern.
Chipotle (CMG) Banks on Digital Initiatives, High Costs Ail
Per the Zacks analyst, Chipotle's consistent strength in digital sales, rise in menu prices and new restaurant openings bode well. However, commodity and wage inflation are a concern.
Strong Product Portfolio Aids DexCom (DXCM) Fight Competition
Per the Zacks analyst, DexCom strong product portfolio targeting the large and growing diabetes market is helping the company fight intensifying competition with entry new competing products.
Solid Adoption of ESG Solution Aids MSCI's (MSCI) Progress
Per the Zacks analyst, MSCI is benefiting from strong demand for custom and factor index modules and the increasing adoption of the ESG and Climate solutions into the investment process.
EQT's Untapped Natgas Drilling Prospects in Appalachian Aid
EQT Corporation is poised to benefit from increasing clean energy demand and its vast untapped natural gas reserves in the Appalachian Basin. Yet, rising operating costs concerns the Zacks analyst.
Onto Innovation (ONTO) Gains from Uptake of Dragonfly System
Per the Zacks analyst, Onto Innovation is gaining higher demand for the Dragonfly inspection system. However, softness in advanced nodes business and lower services parts revenues is a concern.
New Upgrades
Strong Demand, Balanced Operating Model Aid PulteGroup (PHM)
Per the Zacks analyst, PulteGroup benefits from favorable demand conditions and a balanced operating model, which strategically aligns the production of build-to-order and quick-move-in homes.
Immunovant (IMVT) Rides On Upbeat Batoclimab Program Prospects
Per the Zacks Analyst, IMVT's batoclimab for autoimmune diseases has the potential to disrupt the market with its differentiated profile, ensuring affordability and ease of use for patients.
Charles River (CRAI) Gains From Its Diversified Businesses
Per the Zacks analyst, Charles River has a diversified business, with service offerings across various functional expertise and geographical regions. This contributes significantly to the top line.
New Downgrades
Lower Fertilizer Prices, Higher Input Costs Ail Mosaic (MOS)
Per the Zacks analyst, lower phosphate and potash prices will dent the company's profitability. It also faces headwinds from higher raw material costs due to tight supply.
Aaron's (AAN) Witnesses Softness in Its Namesake Segment
Per the Zacks analyst, Aaron's witnesses weakness in its namesake unit. In fourth quarter, the Aaron's Business segment revenues fell 8.7% on weak lease portfolio size and lower lease renewal rate.
High Operating Expenses to Weigh on Capri Holdings (CPRI)
Per the Zacks analysts, Capri Holdings grapples with rising operating expenses, which is impacting margins. The adjusted operating margin shrunk 480 basis points to 12.1%.
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Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report
Oracle Corporation (ORCL) : Free Stock Analysis Report
Marsh & McLennan Companies, Inc. (MMC) : Free Stock Analysis Report
HSBC Holdings plc (HSBC) : Free Stock Analysis Report
RTX Corporation (RTX) : Free Stock Analysis Report
