CORPORATE EARNINGS: Per Share, Yield and EBDITA

DEFINITIONS

By Staff Reporters

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Earnings per share (EPS): The portion of a company’s profits allocated to each outstanding share of its common stock. It is as an indicator of a company’s profitability.

Earnings yield: Earnings per share for the most recent 12 months, divided by the current market price per share; it is the inverse of the price to earnings (P/E) ratio.

EBITDA: Earnings before interest, taxes, depreciation and amortization (EBITDA) is an approximate measure of a company’s operating cash flow.

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CORPORATE EARNINGS: Quarterly Reports

By Staff Reporters

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Peak earnings season: Five of the Magnificent Seven Stocks will be among the 181 companies reporting their earnings this week. Alphabet is in the Mag Seven lead-off spot on Tuesday, Microsoft and Meta step to the plate on Wednesday, and Apple and Amazon rounding out the lineup and this baseball metaphor on Thursday. These companies account for almost 25% of the S&P 500, which is up 40% over the past year and not far off its record closing number from earlier this month. But, the approaching election, it could be a volatile week in the stock markets.

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  • Markets: Stocks are currently driving the narrative on Wall Street. Last week, bonds sold off in a big way (driving yields to their highest level since July) in a sign investors are dialing back expectations of more aggressive rate cuts from the Federal Reserve.
  • Stocks nevertheless handled the bond volatility with aplomb, and with help from Tesla’s 22% one-day rise, the NASDAQ is sitting within 2% of its record high.

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CORPORATE EARNINGS REPORT: Week

By Staff Reporters

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Earnings announcements are a public statement of a company’s profitability for a specific period of time, such as a quarter (90 days) or a year. Equities research analysts will issue estimates of the company’s earnings numbers prior to its announcement date, which is generally set weeks or months in advance. If a company releases better results than analysts predict, its share price will generally rise after the announcement. Below you will find a list of public companies announcing their earnings results this week.

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Earnings reports to feast on them this week. About one-quarter of S&P 500 companies will release their Quarter 2nd financials, including Alphabet, Coca-Cola, Tesla, UPS, Visa, Chipotle, Comcast, GM, and Southwest Airlines.

And if you have room for more economic data, the government will release its first estimate of Q2 GDP on Thursday and an important inflation gauge on Friday.

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DAILY UPDATE: Corporate Earnings, Oxendine Guilty as Stock Markets Rotate

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Here’s where the major stock market benchmarks ended:

  • The S&P 500® index (SPX) rose 30.81 points (0.5%) to 5,615.35, up 0.9% for the week; the Dow Jones Industrial Average® ($DJI) rose 247.15 points (0.6%) to 40,000.90, up 1.6% for the week; the NASDAQ Composite® ($COMP) added 115.04 points (0.6%) to 18,398.44, up 0.3% for the week. Both the SPX and $DJI set intraday record highs today.
  • The 10-year Treasury note yield closed basically unchanged just below 4.19%.
  • The CBOE Volatility Index® (VIX) fell slightly to 12.49.

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What’s up

  • Trump Media & Technology Group climbed 3.40% as President Biden’s recent stumbles seem to be breathing new life into the stock.
  • Tesla rose 2.99%, nearly recovering from yesterday’s drop over robotaxi delays, despite a UBS analyst downgrading the company to “sell.”
  • Deckers Outdoor recovered 1.14% when the board announced a 6-for-1 stock split just a few days after M Science analysts warned investors away from the company.
  • Array Technologies popped 8.69% thanks to an upgrade from Citi analysts from “neutral” to “buy” citing the company’s strong long-term prospects. Competitor Enphase Energy jumped 6.85% in sympathy.
  • Carvana soared 4.80% after BTIG analysts initiated coverage of the company with a “buy” rating and a price target 7% higher than where shares trade today.
  • Home builder stocks continued their climb today on higher hopes of rate cuts. D.R. Horton rose 2.68%, Builders FirstSource jumped 3.99%, and even Home Depot got in on the action and rose 1.70%.

What’s down

  • AT&T slid 0.21% after Ma Bell announced that hackers had stolen information about virtually every single one of the cell carrier’s customers. Shares of cybersecurity company Snowflake sank 1.74% on the news as well.
  • Delta Air Lines fell another 3.06% as turbulence throughout the airline industry continued to weigh the stock down.
  • Arbor Realty Trust plummeted 17.03% after the Justice Department announced a probe of the company due to improper lending practices.
  • Vita Coco dropped 9.07% thanks to a downgrade to “neutral” from Piper Sandler analysts. Are you telling me that a company that just sells coconut water isn’t actually worth $1.58 billion? Now that’s just vita loco!

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Here’s a list of some corporate earnings announcements next week:

  • Monday: Goldman Sachs, BlackRock.
  • Tuesday: Bank of America, Morgan Stanley, PNC Financial Services, and Charles Schwab. We’ll also hear from UnitedHealth Group, Progressive, and J.B. Hunt.
  • Wednesday: ASML, Citizens Bank, Ally Financial, Synchrony Financial, and U.S. Bancorp will wrap up the big financial names. Plus Johnson & Johnson, Kinder Morgan, United Airlines, and Alcoa.
  • Thursday: The busiest day of the week includesNetflix, Domino’s Pizza, Abbott Laboratories, Nokia, D.R. Horton, Intuitive Surgical, and much more.
  • Friday: The week wraps up with American Express, Schlumberger, and Halliburton.

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A federal judge on Friday sentenced former Georgia Insurance Commissioner John Oxendine to serve three and a half years in prison after Oxendine pleaded guilty to healthcare fraud. U.S. District Judge Steve Jones, at a hearing in Atlanta, also ordered Oxendine to pay a $25,000 fine and to share in $760,000 in restitution with Dr. Jeffrey Gallups.

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SOLAR ECLIPSE: Illuminates Corporate Earnings

By Staff Reporters

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The sun and the moon don’t typically run in the same circles but, for a fleeting moment today, they’ll participate in a rare joint appearance: the annular solar eclipse. That’s when the moon lines up directly between the Earth and the sun, blacking out all of the star except the outer rim, forming a “ring of fire.” So, provided the skies are clear, people in the Western US will be able to see the full ring of fire, while the further east you go, the more “partial” the eclipse becomes. Wherever you live, experts warn that you shouldn’t look directly at the eclipse without eye protection.

LINK: NASA’s eclipse map

The following companies had stock price moves driven by quarterly earnings, analyst ratings, or other news:

  • BlackRock (BLK) fell 1.3% after the world’s largest money manager posted third-quarter revenue that fell short of expectations.
  • Boeing (BA) fell 3.3% following reports the aerospace company had widened the scope of an investigation into potential defects in its 737 MAX 8 aircraft.
  • Citigroup was about 0.2% lower despite reporting stronger-than-expected earnings per share and revenue.
  • Dollar General (DG) rose 9.2% after a Gordon Haskett analyst upgraded the stock to “buy” from “hold” after the company announced that former CEO Todd Vasos would be returning immediately.
  • JPMorgan rose 1.5% after country’s biggest bank reported better-than-expected quarterly earnings and revenue, helped by favorable net-interest income, or the money it made lending minus what it paid to customers.
  • PNC Financial Services Group (PNC) fell 2.6% after reporting mixed third-quarter results, as earnings per share topped expectations but revenue missed.
  • Post Holdings (POST) rose 2.6% after JPMorgan initiated coverage of the St. Louis-based breakfast cereal maker with an overweight rating, citing strong cash flow.
  • Progressive Corp. (PGR) gained 8.1% after the insurance company reported better-than-expected quarterly results.
  • UnitedHealth Group (UNH) rose 2.6%, leading Dow gainers, after quarterly earnings and revenue exceeded expectations.
  • Wells Fargo was up 2.8% after reporting stronger-than-expected quarterly revenue and higher earnings.

More large banks are due to report next week, with Bank of America (BAC) and Goldman Sachs (GS) expected to report results Tuesday and Morgan Stanley (MS) on tap Wednesday.

Netflix (NFLX) and Tesla (TSLA) are among the other notable companies on the calendar. Netflix shares have been slipping since early September, touching a five-month low Friday, but are still up 20% so far this year. Abbott Labs (ABT), American Airlines (AAL), CSX (CSX), Johnson & Johnson (JNJ), Union Pacific (UNP), and United Airlines (UAL) will also be reporting.

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Recession, Interest Rates and Earnings?

By Staff Reporters

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Recession: Last October, economists surveyed by Bloomberg were predicting a 100% chance of a Recession. But currently, the Dow is riding a 10-day winning streak, and the S&P 500 is just over 5% away from its all-time high. This week, Wall Street will be glued to the Fed’s interest rate announcement and a heavy slate of earnings.

Final Fed rate hike? The Federal Reserve will likely announce another interest rate increase this week, but this could be the final hike in its 16-month quest to bring down inflation. If the Fed hikes 25 basis points as expected, interest rates would be at their highest level since 2001.

Earnings galore: Corporate America’s A-list will report Q2 earnings this week, including Meta, Alphabet, Microsoft, McDonald’s, Coca-Cola, and Exxon Mobil. In all, about one-third of companies in the S&P 500 will give financial updates over the next five days, so we should get a good look into the health of a bunch of different industries.

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CORPORATE EARNINGS: Review

By Staff Reporters

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Earnings roundup

The following companies are in the earnings pipeline this week:

  • Home Depot is due to release its results for its last fiscal quarter before the market opens Tuesday. Analysts expect the home-improvement chain to report earnings of $3.81 per share, down from $4.09 during the same quarter a year earlier, according to Zacks Investment Research. Home improvement businesses benefited from increased spending on renovations during the pandemic but have struggled as inflation picked up. Home Depot’s shares were down about 0.9% Monday.
  • Target will follow Wednesday, with analysts predicting the big box retailer will report earnings of $1.75 per share, down from $2.19 the year before. Again, investors will be looking to see how Target has dealt with inflation and recession-wary shoppers. Its shares were up more than 1.3%.
  • Walmart wraps up big-retailer week Thursday. Analysts expect the retailer to report earnings of $1.31 per share, a slight improvement from $1.3 a year earlier. Its shares were down about 0.8%.
  • Cisco Systems (CSCO) will report results for the fiscal quarter ended in April on Wednesday. Analysts expect the software company to report earnings of $0.87 per share, up from $0.78 a year before.
  • Two major Chinese tech companies will also report results this week, with Baidu (BIDU) going first before market open Tuesday and Alibaba (BABA) following Thursday.

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UPDATE: Sentient GOOGLE, Corporate Earnings, the Markets and Cryptocurrency

By Staff Reporters

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Blake Lemoine, an engineer for Google’s responsible AI organization, described an AI system that he has been working on since last fall as sentient, with a perception of, and ability to express thoughts and feelings that was equivalent to a human child. He was promptly suspended.

Earnings Are Under Threat. Companies from Target to Microsoft have warned their results will be lower than expected, while analysts have trimmed earnings forecasts across industries. Investors will get further clarity next month when companies begin reporting results for the second quarter.

The S&P is in a historic slump having fallen in nine out of the past 10 weeks for just the third time since 1980. And cryptocurrencies, which trade 24/7, tumbled following another red-hot inflation report.


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