Financial Professionals

Market Insights

A A A

SPX Q3 Earnings, Transcript Highlights

10/16/2013

As mixed messages continue to come from the kindergarten class running D.C.’s academic institution, my attention remains focused on the messages from Q3 earnings.

To date, 40 companies from the S&P 500® Index (SPX) have reported. Included in the 40 are Monday afternoon’s earnings from Intel (INTC), CSX Corp. (CSX), and Yahoo (YHOO).

Let’s first take a look at EPS and sales growth....

Sector

Reported

Yet to Report

EPS Growth

Sales Growth

Overall SPX

40

460

+5.28%

+3.58%

Consumer Discretionary

10

72

+3.62%

+6.70%

Consumer Staples

9

31

+3.82%

+2.35%

Financials

5

76

+3.05%

+4.03%

Technology

9

58

+7.38%

+4.74%

Industrials

4

59

+4.65%

+2.83%

Materials

2

29

+36.12%

+0.30%

Health Care

1

54

+11.24%

+3.07%

Energy

0

44

N/a

N/a

Utilities

0

31

N/a

N/a

Telecom

0

6

N/a

N/a

Source: Bloomberg

In addition, here are some of the messages from CEO’s and CFO’s at earnings conference calls that I listened to or read….

CSX Corp. – 10/15 Q3 EPS $0.46 vs. $0.42 estimate; Rev $3bn vs. $2.95bn estimate

  • CEO Michael Ward
    • “Seeing broad indicators of economic growth this year”
    • “Saw 1% overall gain in pricing, 3% in some segments”
  • Boosted full-year profit forecast as crude oil shipments continue to rise

Citigroup (C) – 10/15 Q3 EPS $1.02 vs. $1.04; Rev $17.88bn vs. $18.22bn

  • CEO Michael Corbat & CFO John Gerspach
    • “Continuing to expand equity derivatives business”
    • “Sees continued mortgage headwinds in North America”
    • “Still thinks emerging markets will outperform developed”

Alcoa (AA) – 10/8 Q3 EPS $0.11 vs. $0.05; Rev $5.77bn vs. $5.63bn

  • CEO Klaus Kleinfeld
    • “Revising China aluminum demand growth to 12% from 11%”

JP Morgan (JPM) – 10/11 Q3 EPS $1.42 vs. $1.30; Rev $23.88bn vs. $24bn

  • CEO Jamie Dimon and CFO Marianne Lake
    • “We are doing very little stock buyback right now”
    • “Sees lower Q4 loan growth”

Costco (COST) 10/9 EPS $1.40 vs. $1.46; Rev $32.5bn vs. $32.7bn

  • CEO Craig Jelinek
    • “Fairly positive on inventory buying for holidays”

Yum! Brands (YUM) 10/9 Q3 EPS $0.85 vs. $0.92; Rev $3.47bn vs. $3.53bn

  • CEO David Novak & CFO Patrick Grismer
    • “China is number 1 retail opportunity in the world”
    • “Reiterates goal of 700 new stores in 2013 in China”
    • “Labor inflation in China lower than anticipated”

Wells Fargo (WFC) 10/11 Q3 EPS $0.99 vs. $0.97; Rev $20.68bn vs. $21.03bn

  • CEO John Stumpf & CFO Tim Sloan
    • “Loan industry growth is tepid”
    • “Household leverage at lowest level since 2002”

Coca-Cola (KO) 10/15 Q3 EPS $0.53 vs. $0.53; Rev $12.03bn vs. $12.05bn

  • CEO Muhtar Kent
    • “Seeing very strong pricing environment in North America”
    • “Sees Chinese economy recovering”
  • Q3 China business volume +9%, India volume +6%

Virtus Investment Partners provides this communication as a matter of general information. The opinions stated herein are those of the author and not necessarily the opinions of Virtus, its affiliates or its subadvisers. Portfolio managers at Virtus make investment decisions in accordance with specific client guidelines and restrictions. As a result, client accounts may differ in strategy and composition from the information presented herein. Any facts and statistics quoted are from sources believed to be reliable, but they may be incomplete or condensed and we do not guarantee their accuracy. This communication is not an offer or solicitation to purchase or sell any security, and it is not a research report. Individuals should consult with a qualified financial professional before making any investment decisions.