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Better-than-Expected Corporate Earnings

Market indexes are lower again ahead of Tuesday’s open, after finishing Monday on the Dow and S&P 500 near 4-week lows. The Dow currently looks to open down another 125 points, the Nasdaq is headed toward a -40 point open and the S&P is -14 points right now. Again, no economic reports are supplying any negative catalysts here; we are continuing to digest the data from last week and our forward looks ahead, while also sifting through new quarterly earnings reports.

Fiscal Q3 results for Procter & Gamble PG beat expectations on both top and bottom lines this morning, with earnings of $1.26 per share surpassing the $1.18 in the Zacks consensus and 6.8% higher than the year-ago tally. Sales in the quarter came in at $18.11 billion, better than the $17.87 billion expected. This drugstore supply retailer does not miss earnings estimates; its last negative surprise was almost seven years ago.

Yet P&G shares have basically flatlined year to date, -1.4% and off the $140 high set in the first week of January. (The company is +13% year over year.) Even after these solid beats in its latest earnings report, P&G is down another 1.3% before the bell. Some of this may be the general malaise in the market so far this week, but some of this might point to uncertainties as the reopening of the economy makes household products slightly less desirable than back in the “shelter in place” era. For more on PG’s earnings, click here.

Johnson & Johnson JNJ also beat estimates for both revenues and earnings this morning, with $2.59 per share in earnings up 12% from a year ago, and sales in the quarter of $22.32 billion, which beat the Zacks consensus by 2.3%. Like P&G, J&J has also had some difficulty pulling ahead of the market; these tend to be companies that get overlooked with shiny new objects from tech companies and the like. Shares are down 0.4% this morning on the earnings release. For more on JNJ’s earnings, click here.

Speaking of, after today’s close we await earnings results from Netflix NFLX, one of the premier beneficiaries of the dynamics of the pandemic over the past year. Expectations are for earnings to grow 90% year over year to $2.98 per share, while $7.14 billion on the top line in the Zacks consensus would pace it 23.7% ahead of year-ago numbers. But the company has missed four straight quarters of earnings estimates; before this, the company put together a string of nine straight beats.

Finally, Apple AAPL unveils its latest offerings mid-day today at its yearly Event Day. Expected on tap are upgrades to the iPad (remember the iPad?), including remodels like the Pro and Mini, similar to iPhone upgrades brought to market earlier. We also may see some “new” objects on display such as Apple Pencil and AirTags, but these have been in the works for some time, and it is unclear if now is the right moment to bring them out. We shall see.


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Johnson & Johnson (JNJ): Free Stock Analysis Report
 
Apple Inc. (AAPL): Free Stock Analysis Report
 
Netflix, Inc. (NFLX): Free Stock Analysis Report
 
Procter & Gamble Company The (PG): Free Stock Analysis Report
 
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