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Earnings Season Scorecard and Research Reports for Apple, PetroChina & Others

Sheraz Mian

Thursday, January 30, 2020

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Apple (AAPL), PetroChina (PTR) and Lockheed Martin (LMT). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today. We have also provided below an update on the ongoing Q4 earnings season.

You can see all of today’s research reports here >>>

Earnings Season Scorecard

Including all of today's earnings releases, we now have Q4 results from 199 S&P 500 members that combined account for 52.1% of the index's total market capitalization. Total earnings for these 199 index members are up +4.2% from the same period last year on +2.5% higher revenues, with 72.9% beating EPS estimates and 67.3% beating revenue estimates. This is better performance than we have seen from these companies in the first three quarters of the year.

Please check out our weekly Earnings Trends report to get a complete picture of the earnings picture here >>>Earnings Outlook Improving  

Apple’s shares have outperformed the S&P 500 over the past year (+93.8% vs. +20.1%), with the momentum expected to continue on the back of the company's better than expected first-quarter fiscal 2020 results. The Zacks analyst credits Apple's outperformance in the quarterly report on continued momentum in the Services segment and a rebound in iPhone sales, which grew on a year-over-year basis.

Customer response was exceptional for new iPhone 11, 11 Pro and 11 Pro Max. Moreover, sales benefited from trade-in programs, which doubled on a year-over-year basis. Wearables’ top-line growth was aided by strong demand for Apple Watch and AirPod. AirPod sales benefited from the launch of AirPod Pro, which features active noise cancellation.

Moreover, Apple Watch’s adoption rate grew rapidly. The solid adoption of Apple Watch is now helping the iPhone maker strengthen presence in the personal health monitor space. The Phase One deal between the United States and China is also a positive. 

(You can read the full research report on Apple here >>>)

Shares of PetroChina have lost -14.9% in the past six months against the Zacks International Integrated Oil industry's decline of -10.7%. The Zacks analyst believes that there are concerns regarding drop in the company’s downstream segment earnings owing to higher domestic refined products oversupply & narrowing profit margin. Losses on the domestic resale of imported natural gas below cost also keep shareholders worried.

PetroChina has managed to lower its exploration & development cost as a means to shore up profitability. On that front, a tight leash on oil & gas lifting costs helped the company lower the expenditure thereby boosting its upstream earnings outlook. Its natural gas business offers lucrative growth prospects in the coming years as China moves from coal to natural gas.

(You can read the full research report on PetroChina here >>>)

Lockheed’sshares have gained +14.9% over the past three months against the Zacks Aerospace Defense industry's rise of +1.6%. The Zacks analyst believes that Expansionary budgetary provisions made by the current U.S. administration will immensely boost this defense prime's business.

Lockheed Martin ended the fourth quarter of 2019 on an impressive note, with both earnings and revenues surpassing the Zacks Consensus Estimate. The company, being the largest defense contractor in the world, enjoys strong demand for its high-end military equipment in domestic and international markets.

However, the company’s higher debt-to-equity ratio shows that the stock is highly leveraged when compared with its industry. Lockheed Martin also faces intense global competition for its broad portfolio of products and services. Furthermore, forced cost reduction initiatives for the F-35 program might hamper its operating results.

(You can read the full research report on Lockheed here >>>)

Other noteworthy reports we are featuring today include Morgan Stanley (MS), The Bank of New York Mellon (BK) and Square (SQ).

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Sheraz Mian

Director of Research

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

iPhone, Wearables & Services Momentum Drives Apple (AAPL)

Upstream Unit Buoys PetroChina (PTR) Amid Gas Import Losses

Robust Demand Aids Lockheed (LMT), F-35 program's Cost Hurts

Featured Reports

Wealth Management, Loan Growth Support Morgan Stanley (MS)

Per the Zacks analyst, focus on wealth management and corporate lending operations, and decent loan growth will aid Morgan Stanley. Steady capital deployments reflect a strong balance sheet position.

Cost Control Measures to Aid BNY Mellon (BK) Amid Low Rates

Per the Zacks analyst, BNY Mellon's efforts to improve efficiency through cost control and global reach will aid growth. Decline in margins due to relatively lower rates will likely hurt the top line.

Square (SQ) Banks on Strong Product Lines Amid Competition

Per the Zacks analyst, well performing Square Terminal, Instant Deposits, Cash Card and Square Capital are aiding Square's gross payment volume. However, competition from PayPal remains a concern.

Strategic Initiatives Aid, High Costs Hurt Nasdaq (NDAQ)

Per the Zacks analyst, a number of strategic buyouts and alliances over the past few years have helped Nasdaq boost its portfolio and enhance its capabilities.

Darden (DRI) Rides on Sales Building Efforts, Cost Woes Stay

Per the Zacks analysts, Darden is poised to benefit from cost control efforts, sales boosting initiatives like developing core menu and technology-driven moves.

Loan Growth Aids Huntington (HBAN), Concentration Risk a Woe

The Zacks Analyst believes that improving economy has helped Huntington witness growth in loan and deposits.

Production from U.S. Resource Plays to Boost Marathon (MRO)

The Zacks analyst believes that Marathon Oil's high-performing U.S. resource plays will fuel its production growth.

New Upgrades

Red Rock (RRR) Banks on Las Vegas operations, Debt Woes Stay

Per the Zacks analyst, Red Rock Resorts'(RRR) Las Vegas operations have been a key growth driver for the company over the past few quarters and the trend is likely to continue. High debt is a concern.

Strong Performance of Rail International Unit Aids GATX

Per the Zacks analyst, substantial growth of the Rail International segment supports GATX's growth. Additionally, the company's efforts to add shareholder value are encouraging.

Strategic Deals Continue to Aid Change Healthcare (CHNG)

Per the Zacks analyst, strategic partnerships, like the one with Cerner Corporation, enable Change Healthcare to continue to implement growth initiatives and drive innovation.

New Downgrades

Elevated Expenses, High Debt Hurt Discover Financial (DFS)

Per the Zacks analyst, its rising expenses to compete with other credit card issuers, attract customers and increase card usage has been weighing on the margins. Its high leverage also bothers.

Low Demand for Components, Weak Business Unit Ail Avnet (AVT)

Per the Zacks analyst, weak components demand due to macro woes are hurting Avnet's growth. Also, margin pressures in the Farnell unit due to short lead times and low ASPs are hurting the bottom line.

Dull Theatre business, Higher Expenses Hurts IMAX (IMAX)

Per the Zacks analyst, weakness in theatre business particularly due to sluggishness in IMAX systems revenues is hurting the company's top-line growth.

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Square, Inc. (SQ) : Free Stock Analysis Report
PetroChina Company Limited (PTR) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
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