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SPX Q3 Earnings 100/500

10/18/2013

Markets head into Friday’s trade at historic highs and further bolstered by the overnight China Q3 GDP print of 7.8% growth, finally accelerating after Q2’s disappointing 7.5% print.

I continue to remain focused on this quarter’s earnings releases and the commentary from various CEOs and CFOs. Let’s update the figures and offer some more messages from the C-suites.

To date, 100 companies from the S&P 500® Index (SPX) have reported.

Sector

Reported

Yet to Report

EPS Growth

Sales Growth

Overall SPX

100

400

4.40%

1.94%

Cons Discret

13

69

4.59%

6.66%

Cons Staples

11

29

2.55%

2.10%

Financials

25

57

6.53%

0.04%

Technology

16

51

7.63%

2.86%

Industrials

16

47

1.81%

1.00%

Materials

4

27

32.32%

1.80%

Health Care

9

46

-9.73%

0.33%

Energy

5

38

12.83%

10.52%

Utilities

0

31

N/A

N/A

Telecom

1

5

20.65%

4.39%

Below are some of the messages from CEOs or CFOs during earnings conference calls that I have listened to or read:

E-Bay (EBAY) 10/16 Q3 EPS $0.64 vs. $0.63 estimate; Rev $3.89bn vs. $3.90bn estimate

  • CEO John Donahoe & CFO Bob Swan
    • “Angst coming from slowing U.S. e-commerce market ahead of holidays”
    • “Doesn’t see e-commerce growth rates improving in Q4”

American Express (AMEX) 10/16 Q3 EPS $1.25 vs. $1.22; Rev $8.3bn vs. $8.21bn

  • CFO John Campbell
    • “U.S. loan growth continues to outpace the industry”
    • “Washington impasse hasn’t directly impacted business”
    • “Continues to see good trends in delinquencies”

BlackRock (BLK) 10/16 Q3 EPS $3.88 vs. $3.88

  • CEO Larry Fink
    • “CEO’s are focused on buybacks, not creating growth”

Mattel (MAT) 10/16 Q3 EPS $1.16 vs. $1.11; Rev $2.21bn vs. $2.18bn

  • CEO Bryan Stockton
    • “Holiday toy outlook is quite strong”

IBM 10/16 EPS $3.99 vs. $3.96; Rev $23.72bn vs. $24.74bn

  • CFO Mark Loughridge
    • “China was down more than 20%”
    • “Hardware slowdown led China decline”

Honeywell (HON) 10/18 Q3 EPS $1.25 vs. $1.24; Rev $9.65bn vs. $9.91bn

  • Sees continued slow growth environment

General Electric (GE) 10/18 Q3 EPS $0.36 vs. $0.35; Rev $35.73bn vs. $36.01bn

  • CEO Jeff Immelt & CFO Jeff Bornstein
    • “Mining business continued to be soft in Q3”
    • “Saw overall improving environment in Q3”
    • “Industrial orders, very encouraging”
    • “Oil & Gas orders +4% in Q3”
    • “Aviation orders +92% in Q3”

Schlumberger (SLB) 10/18 Q3 EPS $1.29 vs. $1.24; Rev $11.61bn vs. $11.58bn

  • CEO Paul Kibsgaard
    • “U.S underlying trends are positive”
    • “Current estimates for 2014 oil point to stronger growth in demand”
    • “Demand for oil in 2013 has again been revised upward”
    • “Sees Russia as one of its fastest growing markets”
    • “Sees seasonal slowdown in China for Q4”
    • “Sees $100/barrel Brent oil prices in 2014”

Google (GOOG) 10/17 Q3 EPS $10.74 vs. $10.36; Rev $11.92bn vs. $11.64bn

  • CEO Larry Page
    • “Continuing to see strong growth in mobile queries and long term expects to monetize mobile better than desktop search”

 Chipotle (CMG) 10/17 Q3 EPS $2.66 vs. $2.78; Rev $862.9M vs. $820.3M

  • Co-CEO Steve Ellis
    • “Raising menu prices around mid year 2014”
    • “Pleased with strong performance in London”

Peabody Energy (BTU) 10/17 Q3 EPS $0.05 vs. (-$0.04); Rev $1.80bn vs. $1.78bn

  • CEO Greg Boyce
    • “Sees 2013 U.S. coal demand 45 to 55m tons over 2012”
    •  “Australia continues to widen its competitive advantage in the seaborne coal markets as inflation and exchange rates moderate.”
    • “Metallurgical coal fundamentals coal fundamentals are improving and continued build out of new generation is driving record thermal coal demand.”

Baker Hughes (BHI) 10/18 Q3 EPS $0.81 vs. $0.78; Rev $5.79bn vs. $5.76bn

  • CEO Martin Craighead
    • “Sees solid and profitable international growth in 2014”

Capital One (COF) 10/17 Q3 EPS $1.88 vs. $1.81; Rev $5.79bn vs. $5.76bn

  • CEO Richard Fairbank & CFO Steve Crawford
    • “Commercial credit performance to remain strong”
    • “Consumers are in a good place, relative to cards”
    • “Loss rates are in trough across card business”

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.