Q3 Earnings Beats: C, GS, BAC, JNJ, WBA; Empire State Lower
Tuesday, October 15th, 2024
Q3 earnings season picks up its stride this morning, after the starting gun cracked last week to staggered Q3 earnings participation. This morning, we see Wall Street banks filling in some of the gaps for this first tier of earnings season, plus a major monthly regional manufacturing report.
Pre-market futures are flat at this hour, following new closing highs for both the Dow and S&P 500 yesterday. Bond yields are beginning to flatten, as well, with the 10-year appearing to plateau just above +4% and the 2-year — which had been inverted for a long timed until just a month or so ago — is just below +4%.
Q3 Earnings for Wall Street Banks: C, GS, BAC
Citigroup C posted strong beats on both top and bottom lines this morning, with earnings of $1.51 per share surpassing the $1.34 in the Zacks consensus rather easily. It came in only a penny below the strong year-ago earnings headline of $1.52 per share. Revenues of $20.3 billion outperformed the $19.91 billion analysts were expecting, +1% but would have been as high as +3% if we look at ex-divestiture gains from last year.
All five of Citi’s businesses gained in the quarter, with Wealth revenue up +9%. Net Income was down -9% in the quarter and Investment Bank Fees grew $999 million to $2 billion. This marks the seventh-straight earnings beat for Citigroup, though by slightly less than the four-quarter trailing average of +21%.
Goldman Sachs GS blew the doors off expectations this morning, with Q3 earnings of $8.40 per share well ahead of the $6.85 expected, and +45% year over year. Revenues of $12.7 billion were +7% ahead of estimates. Equities trading was up +18% to $3.5 billion, while Fixed Income slipped below $3 billion for the quarter.
Bank of America BAC also topped expectations in Q3, albeit by slimmer margins: earnings of 81 cents per share outpaced the Zacks consensus by 3 cents, while revenues of $25.35 billion eked out a +0.22% beat. Trading revenue was up in the quarter, and the stock has gained +2% in the pre-market. For more on BAC’s earnings, click here.
Johnson & Johnson Beats but Sells, Walgreens Up
Johnson & Johnson JNJ also reported Q3 results this morning, beating bottom-line estimates by 20 cents to $2.42 per share, a +9% earnings beat. Revenues in the quarter of $22.47 billion marked a +1.27% gain over expectations. The household products and pharmaceuticals giant even raised guidance on both earnings and sales, but shares are selling off -1.2%, more than half its +2% gains year to date. Those talc litigations remain an overhang. For more on JNJ’s earnings, click here.
Meanwhile, Zacks Rank #5 (Strong Sell), Value-Growth-Momentum grade of F stock Walgreens Boots Alliance WBA is rewarding shareholders with a 3-cent beat on its bottom line to 39 cents per share, $37.55 billion on the top line for a +5% positive surprise. The company announced cost-cutting measures, including closing 1200 stores. The company is still digging out from a -60%+ sell-off year to date. For more on WBA’s earnings, click here.
Empire State Manufacturing Negative Again
Meanwhile, the October survey for Empire State manufacturing came in disappointingly low this morning: -11.9, offsetting the previous month’s jump to +11.5 (the first positive print in 10 months), and well below the +3 print analysts were looking for. We had hoped the rebound in New York State manufacturing would hav e held on for two months in a row, but we’re probably a little early for such things.
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