Earnings season went into full swing this week. It’s been a mixed bag of reports, with several financial companies missing estimates and putting more pressure on the sector. However, many large, blue chip companies stepped up to the plate and provided a positive twist for early earnings reports:
UnitedHealth Group Inc.
- My Predication: Earnings Winner
- Earnings Results: 3Q Earnings Beat Estimates, Sales Miss Slightly
Before the opening bell Tuesday, UnitedHealth Group Inc. (NYSE:UNH) reported mixed earnings results for the third quarter. On the one hand, it reported modest sales growth, a solid earnings surprise and increased full-year guidance. However, it also announced that its sales slightly missed estimates and that its earnings dipped from Q3 2010.
Sales for the last quarter rose 7% from $23.67 billion in Q3 2010 to $25.38 billion this year. This slightly missed the consensus estimate of $24.45 billion. Over the same period, adjusted earnings dipped slightly from $1.28 billion to $1.27 billion. However, the company’s adjusted earnings of $1.17 per share beat analysts’ expectations ($1.11 per share) by 5%.
The company’s outlook remains strong for the rest of the year. The company now expects full year net earnings in the range of $4.40 to $4.45 per share — compared to its prior forecast of $4.15 to $4.25 per share. Revenues for the year are now forecast to exceed $101 billion, while the company previously said revenues would be $101 billion.
Investors were lukewarm about this announcement, so the stock opened about 5% lower from yesterday’s close. United Health has many projects in the works, and its operating margins will firm up once it concludes its internal business realignments.
PepsiCo Inc.
- My Predication: Earnings Loser
- Earnings Results: Earnings, Sales Top Estimates
Beverage giant PepsiCo Inc. (NYSE:PEP) flew past analysts earnings and sales estimates in the third quarter.
The company reported third-quarter earnings of $1.31 per share on $17.6 billion in revenues. Wall Street had been expecting earnings of $1.30 per share on $17.19 billion in revenues. Increased sales of its beverages and snack brands pushed the company’s bottom line higher in the quarter.
Pepsi officials also reaffirmed previous earnings forecast, and said it expects to buy back $2.5 billion worth of company stock by the end of 2011. These positive results gave investors something to feel cheerful about, considering the stocks rocky run this past year.
JPMorgan Chase & Co
- My Predication: Earnings Loser
- Earnings Results: Earnings Fall in Third Quarter
As I predicted, financial institutions are continuing to take hits as earnings are announced. JPMorgan Chase & Co (NYSE:JPM) was one of the major banking companies that experienced a drop in earnings in the latest company.
Their net income reached $4.3 billion, or $1.02 per share — compared with a net income of $4.4 billion, or $1.01 per share, in the third quarter of 2010. Quarterly revenue also fell. Figures showed $23.76 billion — compared with $23.82 billion in the third quarter of 2010. Analysts had expected JPM to post earnings of $0.93 on $23.53 billion in revenue, so at least the company managed to exceed analysts’ estimates.
JPMorgan’s earnings results helped contribute to the dark cloud on the market in recent days, along with some other weak reporting companies.
Hasbro Inc.
- My Predication: Earnings Loser
- Earnings Results: Income Rises But Misses Estimates
Popular toy company Hasboro Inc. (NASDAQ:HAS) reported third-quarter earnings Monday.
In the third quarter, Hasbro’s net income rose to $171 million, or $1.27 per share — compared with $155.2 million, or $1.09 per share, in the third quarter of 2010. Revenue rose 5 percent to $1.38 billion from $1.31 billion a year ago. Analysts had expected earnings of $1.31 per share on revenue of $1.45 billion, so the company failed to meet expectations.
Despite the earnings miss, Hasbro demonstrated strong international sales, with a 23% jump in revenue abroad totaling $563.3 million. Company officials expect sales to firm up, as timing issues caused a number of domestic contracts to be pushed into the fourth quarter.
