Simon Property Group, Inc. Price and EPS Surprise

Simon Property Group, Inc. price-eps-surprise | Simon Property Group, Inc. Quote

Let’s see how things have shaped up prior to this announcement.

Factors at Play

Per a report from CBRE Group CBRE, the total retail sales increased 15%, year over year, in the third quarter. The third quarter marked the fourth consecutive quarter of positive retail absorption (+36.7 million square feet) and each asset class depicted quarter-over-quarter gains. Also, the average asking rent improved for the third consecutive quarter, increasing 2.9%, year over year, to $21.31 per square feet in the third quarter.

The overall retail availability rate shrunk to a 10-year low of 5.9% in the September-end quarter from the June-end quarter’s 6.2%. New construction deliveries were 6.4 million square feet in the third quarter, down 29% year on year because of material cost increases and sourcing delays.

Simon Property too is anticipated to have benefited from the recovery in the retail real estate market. This retail REIT behemoth has a wide exposure to different retail assets, including premium malls, lifestyle centers and other retail properties across the United States.

With the resumption of the economy and an improving leasing environment, Simon Property is likely to have benefited from its superior assets in premium locations. In fact, with the widespread vaccination, an improving economy and solid consumer demand, the company is expected to have witnessed growth in both its earnings and cash flow during the quarter under consideration.

Further, the adoption of an omni-channel strategy, and successful tie-ups with premium retailers have been Simon Property’s key focus. The REIT has also been tapping growth opportunities by assisting the digital brands enhance their brick-and-mortar presence. The company capitalized on buying out recognized retail brands in bankruptcy. With the brands generating decent amount from digital sales, investments in the same seem strategic for Simon Property. Also, the company is anticipated to have maintained its decent financial strength during the September-end quarter.

The Zacks Consensus Estimate for the third-quarter lease income is pegged at $1.16 billion, up from the year-ago period’s $994 million. In addition, the consensus mark for quarterly revenues is currently pinned at $1.23 billion, suggesting a jump of 16%, year over year. Occupancy of its total portfolio is projected at 92% for the quarter.

Lastly, Simon Property’s activities during the July-September quarter were adequate to gain analyst confidence. The Zacks Consensus Estimate for the FFO per share moved 2 cents north in the past month and is currently pinned at $2.47. The figure also calls for 20.5% growth from the year-earlier period.

Here is What our Quantitative Model Predicts

Our proven model predicts a surprise in terms of FFO per share for Simon Property this season. The combination of a positive Earnings ESP, and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of a FFO beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Simon Property currently carries a Zacks Rank of 2 and has an Earnings ESP of +1.29%.

Other Stocks That Warrant a Look

Here are a few other stocks in the REIT sector that you may want to consider, as our model shows that these too have the right combination of elements to report surprises this quarter:

STORE Capital Corporation STOR, scheduled to announce quarterly numbers on Nov 4, currently has an Earnings ESP of +1.02% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Federal Realty Investment Trust FRT, set to report quarterly results on Nov 4, has an Earnings ESP of +0.49% and carries a Zacks Rank of 2, at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Revenues of this Israeli generic drugmaker came in at $3.89 billion, which missed the consensus estimate of $4.08 billion. Sales declined 2% on a reported basis and 3% in constant currency due to lower revenues in the North America segment. Revenues were also affected by the impact of the COVID-19 pandemic.

Shares were down 4.9% on Oct 27, in response to the tepid results. Teva’s share price has declined 7.5% this year so far, in comparison with the industry’s 9.6% decline.

Image Source: Zacks Investment Research

Segment Discussion

The company reports through the following segments based on three regions — North America (comprising the United States and Canada), Europe and International markets.

North America segment sales were $1.88 billion, down 7% year over year due to lower sales of Copaxone and generic products. The segment has seen lower demand for some products due to reduced physician and hospital activity amid the COVID-19 pandemic. Yet, demand for some products in North America increased related to the treatment of COVID-19 and its symptoms.

In the United States, sales declined 7% from the prior-year quarter to $1.75 billion.

Copaxone posted sales of $133 million in North America, down 44% year over year due to generic erosion in the United States.

Combined sales of Bendeka and Treanda declined 9% from the year-ago quarter to $95 million. Sales of Bendeka and Treanda were hurt on account of competition from Eagle Pharmaceuticals’ EGRX bendamustine solution called Belrapzo, which was launched in June 2019.

ProAir sales declined 37% from the prior-year period to $31 million. Austedo — approved to treat chorea associated with Huntington’s disease and tardive dyskinesia — recorded sales of $201 million in North America for the quarter, up 19% year over year due to volume growth.

Ajovy, Teva’s migraine treatment, recorded sales of $46 million for the quarter, up 31% year over year.

Generic product revenues fell 7% from the year-ago period to $859 million in the North America segment due to an increase in competition and lower volume.

Distribution revenues, generated by Anda, rose 7% year over year for the quarter to $363 million due to higher demand.

The Europe segment recorded revenues of $1.22 billion, up 9% year over year on a reported basis and 6% in constant currency. Sales of generic and OTC products alongside Ajovy rose in the segment.

In the International Markets segment, sales remained flat year over year at $530 million. In constant currency terms, sales increased 1% from a year ago due to higher sales in most markets served and a $35-million milestone payment from partner Otsuka related to Ajovy’s launch in Japan. Sales continued to decline in Japan on account of regulatory price reductions, generic erosion of some products and divestment of the majority of assets from the Japan-based business venture.

Revenues continued to be affected by the ongoing impact of the COVID-19 pandemic on markets served, and customer stocking and purchasing patterns.

The Other segment (comprising the API manufacturing business and certain contract manufacturing services) recorded revenues of $262 million, down 17% year over year on a reported basis as well as in constant currency terms.

Margins Rise

Adjusted gross margin rose 120 basis points (bps) to 53.6% for the quarter due to improved profitability from generic drugs in North America and Europe. Adjusted research & development expenses declined 6.9% year over year to $217 million due to a decline in pain and neuropsychiatry as well as biosimilar/generic pipeline candidate projects. Selling and marketing expenditure rose 0.2% from the year-ago level to $567 million. General and administrative expenses rose 2.2% from the prior-year level to $275 million. Adjusted operating income rose 2% year over year for the quarter to $1.04 billion due to higher profits from Europe and International segments.

2021 Guidance Maintained

Teva reiterated its sales guidance for revenues and earnings per share for 2021. It expects revenues for the full year in the range of $16.0-$16.4 billion. The Zacks Consensus Estimate for 2021 revenues stands at $16.23 billion. The earnings guidance has been maintained in the range of $2.50-$2.70 per share.

Our Take

Teva missed both earnings and sales estimates for the third quarter. Yet, sales showed signs of recovery in Europe as the company experienced an increase in volumes in the reported quarter from the first two quarters of 2021, a trend that is anticipated to continue in fourth-quarter 2021 as well.

To align its debt maturity profile with core operational performance, Teva continues its commitment to deleveraging outstanding debt. After the repayment of $1.48 billion debt during the quarter, total debt amounted to $23.75 billion on Sep 30, 2021.

Teva Pharmaceutical Industries Ltd. Price and EPS Surprise

Teva Pharmaceutical Industries Ltd. price-eps-surprise | Teva Pharmaceutical Industries Ltd. Quote

Zacks Rank & Stocks to Consider

Currently, Teva has a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the biotech sector are Alkermes ALKS and Regeneron REGN, each carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’s earnings per share estimates for 2022 have increased from $1.21 to $1.27 in the past 60 days. The stock has rallied 43.6% in the year so far.

Regeneron’s earnings per share estimates for 2021 have increased from $54.15 to $62.36 in the past 60 days. The same for 2022 has risen from $44.11 to $46.70 over the same period. The stock has rallied 22% in the year so far.

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Uber Technologies, Inc. Price and EPS Surprise

Uber Technologies, Inc. price-eps-surprise | Uber Technologies, Inc. Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Uber this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Uber has an Earnings ESP of +16.33% as the Most Accurate Estimate is pegged at a loss of 32 cents, while the Zacks Consensus Estimate is poised at a loss of 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Uber carries a Zacks Rank #3.

Highlights of Q2 Earnings

Uber reported second-quarter 2021 earnings of 58 cents per share against the Zacks Consensus Estimate of a loss of 53 cents. Total revenues of $3,929 million outperformed the Zacks Consensus Estimate of $3,740.3 million. The top line rose significantly year over year (improved 35% sequentially), primarily due to recovery in its mobility operations.

Other Stocks to Consider

Investors interested in the broader Computer and Technology sector may also consider Lyft LYFT, T-Mobile US TMUS and HubSpot HUBS, as these stocks too possess the right combination of elements to beat on earnings this reporting cycle.

Lyft has an Earnings ESP of +11.77% and a Zacks Rank #2. The company will release third-quarter 2021 earnings numbers on Nov 2.

T-Mobile has an Earnings ESP of +11.39% and a Zacks Rank #3. The company will announce third-quarter 2021 financial numbers on Nov 2.

HubSpot has an earnings ESP of +1.49% and a Zacks Rank #3. The company is set to release third-quarter 2021 results on Nov 3.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

KLA Corporation Price, Consensus and EPS Surprise

KLA Corporation price-consensus-eps-surprise-chart | KLA Corporation Quote

Top-Line Details

Products revenues (accounting for 78% of total revenues) increased 42.3% year over year to $1.63 billion.

Services revenues (22% of total revenues) also increased 15.5% from the year-ago quarter to $453.9 million.

The growth in Services revenues is attributed to the expanding installed base, higher utilization rates and increasing expansion of service opportunities in the trailing edge.

In terms of reportable segments, Semiconductor Process Control revenues increased 40% year over year to $1.78 billion, driven by strength in foundry and logic. Foundry & Logic accounted for 61%, and Memory constituted about 39% of semiconductor process control systems’ revenues.

Further, the Electronics, Packaging and Components or EPC group reported strong results for the quarter, driven by its high exposure to 5G mobile and infrastructure as well as growing demand in automotive.

Specialty Semiconductor Process revenues were $102 million, up 15% year over year.

PCB, Display and Component Inspection revenues grew 12% from the year-ago quarter to $203 million.

Operating Details

Gross margin was 62.9% compared with 62.1% in the prior-year quarter. The figure was at the higher end of the guided range of 61.5-63.5%.

Non-GAAP operating expenses increased 15.2% year over year to $432.4 million. As a percentage of sales, research and development expenses contracted 185 basis points (bps) year over year. Also, as a percentage of sales, selling, general and administrative costs contracted 195 bps year over year.

Balance Sheet

As of Sep 30, 2021, cash, cash equivalents and marketable securities totaled $2.6 billion compared with $2.5 billion on Jun 30, 2021.

Cash from operations was $863.8 million for the fiscal first quarter versus $465.6 million in the prior quarter.

During the quarter, the company paid $162.8 million in dividends and repurchased $399.7 million shares.

Second-Quarter Fiscal 2022 Guidance

For second-quarter fiscal 2022, revenues are expected between $2.23 billion and $2.43 billion. The Zacks Consensus Estimate for revenues is pegged at $2.24 billion.

The company expects non-GAAP EPS within $4.95-$5.85. The Zacks Consensus Estimate for non-GAAP EPS is pegged at $5.17.

Zacks Rank & Stocks to Consider

Currently, KLA Corp. has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Trimble TRMB, Semtech Corporation SMTC and Apple AAPL, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Trimble, Semtech, and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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Revenues

Third-quarter revenues were $455 million, which surpassed the Zacks Consensus Estimate of $434 million by 4.8%.

Highlights of the Release

Average selling price for the quarter was $3.61 per thousand cubic feet equivalent (Mcfe), up 139.1% from the year-ago figure of $1.51. For the reported quarter, total production costs were down 9.4% year over year to $1.55 per Mcfe due to proper cost-management measures implemented by the company. Its efficient management of expenses continues to reduce outflow and boost margins.

Total second-quarter production volumes were 153.5 billion cubic feet equivalent, up 32.7% year over year. Interest expenses for the reported quarter were $37.9 million, marginally up 0.1% from the year-ago period.

During the quarter, CNX Resources repurchased shares worth $78 million. During the quarter, its board of directors approved a $1-billion increase in the share buyback program.

Financial Update

As of Sep 30, 2021, CNX Resources had cash and cash equivalents of $0.4 million, down from $15.6 million on Dec 31, 2020.

Total long-term debt as of Sep 30, 2021 was $2,203.7 million, lower than $2,401.4 million on Dec 31, 2020.

Third-quarter 2021 cash from operating activities was $214.4 million, down 3.9% from $223.2 million in the year-ago period. Free cash flow for the third quarter was $130 million.

Capital expenditure for third-quarter 2021 was $97 million.

Guidance

CNX Resources raised its capital expenditure guidance for 2021 to the range of $460-$470 million from the earlier expectation of $430-$470 million. The company also revised its 2021 production volumes upward to the range of 570-580 billion cubic feet equivalent (Bcfe) from the earlier prediction of 540-570 Bcfe. Nearly 91% of expected gas production for 2021 is hedged by the company.

CNX Resources raised free cash flow expectation for 2021 to $500 million from $475 million projected earlier.

Zacks Rank

CNX Resources currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Upcoming Releases

Devon Energy Corporation DVN is scheduled to announce third-quarter 2021 results on Nov 2. The Zacks Consensus Estimate for the bottom line for the quarter to be reported is pegged at 92 cents per share.

ConocoPhillips COP is scheduled to report third-quarter 2021 results on Nov 2. The Zacks Consensus Estimate for the bottom line for the quarter to be reported is pegged at $1.53 per share.

Occidental Petroleum Corporation OXY is scheduled to report third-quarter 2021 results on Nov 4. The Zacks Consensus Estimate for the quarterly earnings is pegged at 65 cents per share.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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The company’s revenues of $294.1 million increased 11% from the year-ago quarter. The top line, however, missed the Zacks Consensus Estimate of $302 million.

Shares of Alkermes were down 9.1% on Wednesday, attributable to mixed third-quarter results. The stock has rallied 43.6% so far this year against the industry’s decline of 9.6%.

Image Source: Zacks Investment Research

Quarter in Detail

Total manufacturing and royalty revenues were up 13.2% year over year to $136.3 million. The increase was driven primarily by Vumerity revenues, which soared by more than 800% to $26.7 million.

Sales of proprietary drug Vivitrol (for alcohol and opioid dependence) increased approximately 11% year over year to $88.8 million while the same for Aristada (for schizophrenia) increased approximately 10% year over year to $68.9 million.  These increases were driven by the underlying unit growth.

Research and development (R&D) expenses were $118.4 million, up 24.6% year over year.

Selling, general and administrative (SG&A) expenses were $136.2 million, up 6.6% year over year due to increased investment to support the launch of Lybalvi.

As of Sep 30, 2021, Alkermes had cash and cash equivalents worth $748.2 million compared with $669.4 million on Jun 30, 2021. Total outstanding debt was $296.4 million as of Sep 30, 2021.

Pipeline Updates

In June 2021, the FDA approved the company's new drug application for Lybalvi (olanzapine and samidorphan) for the treatment of adults with schizophrenia and adults suffering from bipolar I disorder. The company commercially launched the drug in October 2021 in the United States.

Please note that Alkermes faces stiff competition in the target market from big companies. Drugs available in the schizophrenia and bipolar I disorder treatment market include AstraZeneca’s AZN Seroquel XR, Johnson & Johnson's JNJ Risperdal Consta and AbbVie’s Vraylar.

An important candidate in Alkermes’ pipeline is cancer immunotherapy nemvaleukin alfa (ALKS 4230), which is being evaluated under ARTISTRY Clinical Development Program. The candidate is currently undergoing multiple studies for treating patients with solid tumors.

Earlier this month, Alkermes initiated the phase III ARTISTRY-7 study, which is evaluating the anti-tumor activity and safety of nemvaleukin alfa in combination with Merck’s MRK Keytruda (pembrolizumab), anti-PD-1 antibody, for treating patients with platinum-resistant ovarian cancer. The FDA has granted a Fast Track designation to nemvaleukin alfa in combination with Keytruda for the treatment of platinum-resistant ovarian cancer.

2021 Guidance

Alkermes reiterated the financial guidance it provided earlier this year.

The company expects revenues in the range of $1.14 billion to $1.18 billion. The Zacks Consensus Estimates for revenues stands at $1.17 billion. Adjusted EPS is anticipated within $0.52-$0.70 per share. The Zacks Consensus Estimates for earnings stands at $0.62 per share.

Zacks Rank

Alkermes currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has been unchanged at 56 cents per share over the past 30 days. The figure indicates a 1.8% increase from the year-ago earnings of 55 cents per share. The consensus mark for revenues is $405.4 million, suggesting a 5.7% improvement from the year-earlier reported figure.

Sterling Construction Company Inc Price and EPS Surprise

Sterling Construction Company Inc price-eps-surprise | Sterling Construction Company Inc Quote

Factors to Note

The company’s third-quarter revenues are likely to have benefited from a diversified portfolio and focus on higher-margin, lower-risk projects. Sterling has been shifting away from low-bid heavy highway projects to alternative delivery work. It has been efficiently executing a robust pipeline of projects for large high-profile customers who are building new distribution centers, data centers and warehouses.

The Heavy Civil business segment, contributing 50% to total revenues, is likely to have gained from the company’s focus on more alternative delivery work with higher margins and lower risks rather than low-bid heavy highway projects.

Its Residential segment, accounting for 12% of total revenues, is likely to have witnessed strong demand and productivity trends in the quarter to be reported. Yet, the segment has been experiencing supply-chain issues, specifically relating to the cost of concrete, lumber and steel, due to which, management announced multiple price increases during the quarter. These headwinds might put pressure on third-quarter results.

Its Specialty Services segment, accounting for 38% of total revenues, has been gaining strength from geographic expansion efforts that enabled the company to gain new customers.

Yet, inflation, supply chain pressures and weather-related challenges are likely to have reflected on third-quarter margins.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Sterling this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat but that is not the case here as you will see below.

Earnings ESP: It has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:  Sterling currently carries a Zacks Rank #2.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Boise Cascade Company BCC has an Earnings ESP of +7.33% and a Zacks Rank #3.

Jacobs Engineering Group Inc. J has an Earnings ESP of +6.49% and holds a Zacks Rank #2.

Installed Building Products, Inc. IBP has an Earnings ESP of +0.60% and a Zacks Rank #3.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Quarter Details

Probe card segment revenues were $154.9 million for the third quarter, up 0.8% sequentially and 2.7% year over year.

Foundry & Logic (accounting for 55.1% of revenues) revenues were $104.7 million, down 3.4% year over year but up 0.96% sequentially.

Revenues for DRAM products (20.9% of revenues) were $39.8 million, reflecting an increase of 26.8% year over year but a decrease of 5.5% sequentially.

FormFactor, Inc. Price, Consensus and EPS Surprise

FormFactor, Inc. price-consensus-eps-surprise-chart | FormFactor, Inc. Quote

Flash revenues (5.5% of revenues) were $10.4 million, down 5.5% from the year-ago period but up 31.7% from the second quarter.

Systems revenues (18.5% of revenues) were $35.1 million for the reported quarter, up 2% sequentially and 29% year over year.

The sequential increase was due to higher sales of optical metrology and thermal systems, driven by advanced packaging and automotive applications.

On a non-GAAP basis, gross margin contracted 70 basis points (bps) year over year to 46%. Also, the Probe card segment’s gross margin was 45.1%, expanding 180 bps sequentially.

The sequential increase in Probe card gross margin is attributed to a favorable product mix within specific markets.

Non-GAAP operating expenses increased 0.21% year over year to $48.5 million.

Balance Sheet & Cash Flow

As of Sep 25, 2021, cash & marketable securities (including restricted cash) were $266.7 million compared with $258.1 million on Jun 26, 2021.

Further, the company generated $34.3 million of cash from operations in the reported quarter, up from $33.8 million in the previous quarter.

Capital expenditure was $20 million, up from $17.9 million in the second quarter.

Further, free cash flow was $14.4 million for the third quarter, down from $16.2 million in the second quarter.

Guidance

FormFactor expects fourth-quarter 2021 revenues between $192 million and $204 million. The Zacks Consensus Estimate for revenues is currently pegged at $192.3 million.

The company expects demand to remain strong, with sequentially higher Foundry & Logic and Systems demand.

It also anticipates fourth-quarter operating expenses to be higher than the reported quarter due to increased investments in research & development, and greater travel expenses.

Further, management expects non-GAAP gross margin between 44% and 47%.

On a non-GAAP basis, it projects earnings in the band of 37-45 cents per share. The consensus mark for earnings is pegged at 39 cents per share.

Zacks Rank & Stocks to Consider

Currently, FormFactor has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Trimble TRMB, Semtech Corporation SMTC and Apple AAPL, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Trimble, Semtech, and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Adjusted earnings of $2.45 per share surpassed the Zacks Consensus Estimate by 7% and increased more than 54% year over year. Total revenues of $482.8 million surpassed the consensus mark by 1% and increased 26% year over year.

WEX’s shares have rallied 46.1% in the past year against 1.9% decline of the industry it belongs to.

WEX Inc. Price, Consensus and EPS Surprise

WEX Inc. price-consensus-eps-surprise-chart | WEX Inc. Quote

Revenues by Segment

Fleet Solutions revenues were up 25% year over year to $286.4 million. Travel and Corporate Solutions revenues of $91 million were up 42% year over year. Health and Employee Benefit Solutions revenues of $105.4 million increased 18% year over year.

Key Performance Metrics

Average number of vehicles serviced was 16.2 million, up 6% from the year-ago quarter’s figure. Total fuel transactions processed increased 8% from the year-ago quarter’s tally to 161.8 million. Payment processing transactions were up 11% year over year to 134 million. Travel and Corporate Solutions' purchase volume climbed more than 100% year over year to $12.8 billion. Health and Employee Benefit Solutions' average number of Software-as-a-Service accounts in the U.S. were up 16% to 16.9 million, year over year.

Operating Results

Adjusted operating income came in at $178.8 million compared with the prior-year quarter’s figure of $125.4 million. Adjusted operating income margin increased to 37% from the year-ago quarter’s level of 32.8%.

Balance Sheet

WEX exited the quarter with cash and cash equivalents balance of $533.8 million compared with $425.3 million witnessed at the end of the prior quarter. Long-term debt was $2.8 billion compared with $2.9 billion at the end of the previous quarter.

Guidance

For the fourth quarter of 2021, WEX anticipates revenues in the range of $468 million to $483 million, the midpoint ($475.5 million) of which is lower than the current Zacks Consensus Estimate of $477.91 million. Adjusted net income is expected between $2.25 and $2.45 per share, the midpoint ($2.35 per share) of which is higher than the Zacks Consensus estimate of $2.28.

For full-year 2021, revenues are expected between $1.821 billion to $1.836 billion, the midpoint ($1.83 million) of which is the same as the current Zacks Consensus Estimate. Adjusted net income is expected between $8.81 and $9.01 per share, higher than the Zacks Consensus estimate of $8.66.

Currently, WEX carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.

Recent Performance of Some Other Business Services Companies

Equifax EFX reported better-than-expected third-quarter 2021 results. Adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6% but declined 1.1% on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6% and improved 14.5% year over year.

IQVIA Holdings IQV reported impressive third-quarter 2021 results, with earnings per share of $2.17 beating the consensus mark by 1.9% and improving 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1% and increased 21.7% year over year.

Omnicom OMC reported third-quarter 2021 adjusted earnings of $1.65 per share that beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Highlights of the Release

Customer growth in the company’s service areas increased 2.9% year over year for the 12 months ended Sep 30, 2021, which in turn boosted operating income for the third quarter. Customer growth boosted operating income by $5.1 million from the year-ago level.

Other O&M expenses were up $4.9 million for the quarter, increasing year over year due to return to more normal levels of purchased services and maintenance costs compared with third-quarter 2020, which was affected by the COVID-19 pandemic.

Guidance

IDACORP revised its 2021 earnings guidance to the range of $4.80-$4.90 from the earlier projection of $4.70-$4.90. The metric was $4.60 per share in 2020. The Zacks Consensus Estimate for 2021 earnings is currently pegged at $4.85 per share.

Idaho Power reiterated its capital expenditure guidance for 2021 in the range of $320-$330 million.

Zacks Rank

Currently, IDACORP has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Releases

NextEra Energy, Inc. NEE reported third-quarter 2021 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 72 cents by 4.2%.

DTE Energy Company DTE reported third-quarter 2021 operating earnings per share of $1.72, which missed the Zacks Consensus Estimate of $1.83 by 6%.

Avangrid, Inc. AGR reported third-quarter 2021 earnings of 34 cents per share, beating the Zacks Consensus Estimate of 30 cents by 13.3%

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Market Sector Details

Industrial revenues fell 8.2% year over year to $392 million and accounted for 46.5% of total revenues. Beginning first-quarter fiscal 2021, Plexus consolidated the previously reported Industrial/Commercial and Communications market sectors to form the Industrial market sector.

Healthcare/Life Sciences revenues decreased 3.5% from the year-ago quarter to $333 million. The sector accounted for 39.5% of total revenues.

Aerospace/Defense revenues decreased 16.3% year over year to $118 million and accounted for 14% of total revenues.

Notably, the top 10 customers of the company accounted for 56% of net revenues.

Operating Details

Gross profit on a GAAP basis decreased 11.5% year over year to $79 million. Gross margin contracted 40 basis points (bps) year over year to 9.4%.

Selling and administrative expenses (4.3% of revenues) decreased 5.6% from the year-ago quarter to $36.6 million.

Plexus reported adjusted operating income of $42.3 million, down 15.9% year over year. Adjusted operating margin contracted 50 bps on a year-over-year basis to 5%

Balance Sheet & Cash Flow

As of Oct 2, 2021, Plexus had cash & cash equivalents worth $270.5 million compared with $303.3 million as of Jul 3, 2021.

As of Oct 2, 2021, the company had long-term debt of $187 million compared with $187.7 million as of Jul 3, 2021.

In fourth-quarter fiscal 2021, cash flow provided by operations was $11 million. The company reported free cash outflow of $11.7 million.

Guidance

For first-quarter fiscal 2022, revenues are projected between $825 million and $865 million. GAAP operating margin is expected between 4.6% and 5%.

GAAP earnings are expected between $1.01 and $1.17 per share.

Zacks Rank & Stocks to Consider

Plexus currently has a Zacks Rank #2 (Buy).

Similar-ranked stocks are Apple AAPL, Trimble TRMB and Cognex CGNX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apple, Trimble and Cognex are set to report their quarterly earnings on Oct 28, Nov 3 and Nov 4.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Vishay Intertechnology, Inc. Price and EPS Surprise

Vishay Intertechnology, Inc. price-eps-surprise | Vishay Intertechnology, Inc. Quote

Factors to Consider

During the third quarter, Vishay is likely to have gained across end-markets served from a robust portfolio of resistors, inductors, capacitors, diodes, MOSFETs and opto products.

Strength in the electronics business is expected to have continued supporting its performance in the quarter under review.

Growing demand for Optoelectronic offerings is anticipated to have contributed well to the top line in the third quarter.

The rising adoption of MOSFETs in automotive is expected to have continued benefiting the top line in the quarter under review.

Solid demand for its capacitors in power transmission and electro cars in China might have been a tailwind.

Strengthening global distribution might have benefited Vishay’s to-be-reported quarterly performance.

Growing demand in automotive and industrial markets is expected to have continued driving the company’s performance in all regions served.

Factory automation, accelerated residential development, and governmental investments in power generation and transmission systems as well as alternative energy systems are expected to have boosted the industrial sector in the quarter under review.

Also, the medical and consumer market sectors might have continued registering growth in the third quarter.

Further, rising demand for 5G base station equipment is anticipated to have propelled the telecom sector.

Yet, uncertainties related to the coronavirus pandemic are expected to have been headwinds. Also, long lead times for many product lines might have remained concerns.

Further, increasing selling, general and administrative expenses are likely to have affected its quarterly performance.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Vishay this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

It has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season.

Applied Materials AMAT has an Earnings ESP of +0.52% and a Zacks Rank of 2, at present.

HP Inc. HPQ has an Earnings ESP of +1.89% and a Zacks Rank of 1, at present.

NetApp, Inc. NTAP has an Earnings ESP of +3.70% and a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Cable Communication Revenue Details

Revenues increased 7.4% from the year-ago quarter to $16.1 billion, driven by increases in broadband, advertising, wireless, business services, video, other and advertising revenues. Total Customer Relationships increased 255K to 34 million.

Broadband revenues grew 11.6% year over year to $5.80 billion, primarily driven by increased residential broadband customers and average rate. Total broadband customer net additions were 300K.
 

Comcast Corporation Price

Comcast Corporation price | Comcast Corporation Quote

Business Services revenues were up 8.7% to $2.23 billion, driven by higher average rates.

Wireless revenues surged 50.7% to $603 million, driven by an increase in the number of customer lines and device sales. Comcast added 285K wireless lines in the reported quarter.

Advertising revenues increased 4.6% year over year to $705 million. Excluding political advertising revenues, advertising revenues increased 19%.

Video revenues increased 1.4% to $5.50 billion, reflecting an increase in average rates. Meanwhile, voice revenues were $851 million, down 2.9% year over year due to a decline in the number of residential voice customers.

Total video customer net losses were 408K while total voice customer net losses were 158K.

Other revenues increased 12.4% from the year-ago quarter to $427 million, reflecting increases in revenues from security and automation services, and from the licensing of technology platforms.

NBCUniversal Revenues Increase Y/Y

Revenues increased 57% year over year to $10 billion.

Media revenues increased 47.5% from the year-ago quarter to $6.77 billion, reflecting higher advertising and distribution revenues.

Excluding $1.8 billion of revenues generated by the broadcast of the Tokyo Olympics, Media revenues increased 9.2% year-over-year. Advertising revenue increased 73%, benefiting from the broadcast of the Tokyo Olympics, higher pricing and additional Peacock sales, partially offset by the unfavorable timing of other sporting events and a decline in ratings.

Distribution revenue increased 36.2%, driven by the broadcast of the Tokyo Olympics, contractual rate increases in the current period and increases at Peacock.

Studios revenues increased 26.8% from the year-ago quarter to $2.41 billion, primarily reflecting higher theatrical revenues.

Theme Parks revenues surged to $1.45 billion from the year-ago quarter’s figure of $385 million, reflecting improved operating conditions.

Sky Revenues Details

Sky’s revenues increased 4.1% year over year to $5 billion. At constant currency (cc), revenues decreased 0.7%.

Direct-to-consumer revenues were up 4.7% (down 0.1% at cc) from the year-ago quarter to $4.13 billion.

Content revenues decreased 22.8% (down 26.4% at cc) to $300 million.

Advertising revenues climbed 21.4% (up 15.6% at cc) from the year-ago quarter to $561 million.

Total customer relationships decreased 233K to 23 million in the reported quarter.

Operating Details

Consolidated programming & production costs increased 21.4% from the year-ago quarter to $10.4 billion.

Consolidated adjusted EBITDA increased 18.1% from the year-ago quarter to $9 billion.

Segment-wise, Cable Communications’ adjusted EBITDA rose 10.3% from the year-ago quarter to $7.1 billion. Cable Communications’ results include adjusted EBITDA of $51 million from the wireless business against a loss of $50 million in the year-ago quarter.

NBCUniversal’s adjusted EBITDA increased 48.2% from the year-ago quarter to $1.3 billion, despite significant decline in Studios (down 47.3%).

Sky’s adjusted EBITDA jumped 88.8% year over year (up 76.2% at cc) to $971 million. Notably, Sky’s operating costs and expenses decreased 6.1% (down 10.2% at cc) to $4.01 billion.

Consolidated operating income increased 33.7% year over year to $5.45 billion.

Cash Flow & Liquidity

As of Sep 30, 2021, cash and cash equivalents were $11.81 billion, down from $12.41 billion as of Jun 30, 2021.

Moreover, as of Sep 30, 2021, consolidated total debt was $97.22 billion compared with $98.5 billion as of Jun 30, 2021.

In third-quarter 2021, Comcast generated $6.10 billion in cash from operations, down from $7.60 billion reported in the previous quarter. Free cash flow was $3.23 billion in the reported quarter, down from $4.79 billion in the previous quarter.

During the third quarter of 2021, Comcast paid $1.2 billion in dividend and repurchased 25.9 million of its common shares for $1.5 billion. As of Sep 30, 2021, Comcast had $8 billion available under its share-repurchase authorization.

Zacks Rank & Stocks to Consider

Currently, Comcast carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader consumer discretionary sector include Accel Entertainment ACEL Clarus CLAR, and Funko FNKO. While both Funko and Clarus sport a Zacks Rank #1 (Strong Buy) Accel carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Accel Entertainment, Funko and Clarus are scheduled to report their quarterly earnings on Nov 3, 4 and 8, respectively.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Total Revenues

Total revenues came in at $54.72 billion, up 65.1% from $33.14 billion generated in the year-ago quarter.

Production

Third-quarter hydrocarbon production averaged 2,814 thousand barrels of oil equivalent per day (kboe/d), up 4% year over year. This improvement was due to startups, ramp-up of projects, higher demand for natural gas and an increase in OPEC production quotas.

For the reported quarter, liquids production averaged 1,517 thousand barrels per day, up 6% from the year-ago period.

Quarterly gas production was 7,070 thousand cubic feet per day, up 1% year over year due to increased gas output from the Europe and Central Asia region as well as the Middle East and North Africa.

Realized Price

Third-quarter realized price for Brent was up 71% to $73.5 per barrel from $42.9 in the year-ago period. The average realized liquid price was $67.1 per barrel, up 68% from the year-ago figure.

Realized gas prices improved 151.2% from the prior-year quarter to $6.33 per thousand British thermal units (Btu).

Realized LNG prices improved 154.9% from the prior-year quarter to $9.1 per thousand Btu.

Highlights of the Release

Operating income was $5,374 million, up 268.3% from the year-ago period due to higher commodity prices.

Interest expenses for the reported quarter were $454 million, down 17.3% from $549 million in the year-ago period.

In third-quarter 2021, TotalEnergies acquired $126 million worth of assets and sold assets valued at $1,084 million. During the quarter, it acquired a 10% interest in Lapa block in Brazil.

Segment Details

Exploration & Production’s operating earnings were $2,726 million, up 240.3% from $801 million in the year-ago period.

Integrated Gas, Renewable & Power’s operating income was $1,608 million, up 464.2% from $285 million in the year-ago quarter.

Refining & Chemicals’ operating income was $602 million against a loss of $88 million in the year-ago quarter.

Marketing & Services’ operating income was $438 million, down 5% from $461 million in third-quarter 2020.

Financial Update

Cash and cash equivalents as of Sep 30, 2021 were $28.9 billion compared with $30.6 billion in the corresponding period of 2020. Net debt to capital was 22.1% at quarter-end, down from 26.1% at third quarter 2020-end.

Cash flow from operating activities at second quarter-end was $5,640 million, up 29.6% year over year.

Guidance

TotalEnergies, taking into consideration the OPEC quotas, expects total production for the fourth quarter in the range of 2,850-2,900 Kboe/d.

It expects the positive movement in commodity prices to continue in second-half 2021 and further increase the realized prices of LNG.

TotalEnergies expects to invest $13 billion in 2021, out of which $3 billion will be spent on renewables and electricity.

Zacks Rank

Currently, TotalEnergies carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Releases

Chevron Corporation CVX is scheduled to release third-quarter 2021 results on Oct 29, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings is pegged at $2.21 per share.

Exxon Mobil Corporation XOM is scheduled to release third-quarter 2021 results on Oct 29, before the opening bell. The Zacks Consensus Estimate for earnings for the quarter is pegged at $1.57 per share.

Enbridge Inc. ENB is scheduled to release third-quarter 2021 results on Nov 5, before the opening bell. The Zacks Consensus Estimate for quarterly earnings is pegged at 46 cents per share.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

It incurred third-quarter 2021 adjusted loss per unit of 29 cents versus the Zacks Consensus Estimate of earnings of 17 cents. The bottom line also deteriorated from the year-ago adjusted loss of 28 cents per unit.

Total revenues surged to $1,226.3 million from $519.2 million in the prior-year quarter. Also, the top line beat the consensus mark of $945 million.

The weak third-quarter earnings were caused by decreased contribution from storage and transportation as well as marketing, supply, and logistics businesses. Also, increased operating expenses played a spoilsport. The negatives were partially offset by higher gas gathering and processing.

Segmental Performance

Gathering and Processing: The segment generated earnings before interest, taxes, depreciation and amortization (EBITDA) of $112.9 million, up from $88.9 million in the year-ago quarter. Operating and maintenance expenses marginally decreased to $19.5 million from the year-ago level of $19.4 million.

Total gas gathering volumes for the quarter were 975.2 million cubic feet per day (MMcf/d), up from 867.8 MMcf/d a year ago. Gathering volumes declined in Marcellus, while rose in Delaware, Bakken - Arrow, Barnett and Powder River Basin. Total processing volumes increased to 409.4 MMcf/d from the year-ago level of 328.2 MMcf/d. Yet, compression volumes declined to 253.6 MMcf/d from 358.4 MMcf/d in the year-ago period.

Storage and Transportation: The unit generated EBITDA of $3.7 million, down from $14.7 million in the year-ago quarter, primarily due to the Stagecoach divestment. Operating and maintenance expenses increased to $1.5 million from the year-ago level of $0.7 million.

Firm storage services in the Gulf Coast storage declined to 225.7 MMcf/d from 285.4 MMcf/d in the prior-year quarter. Rail loading at the COLT hub decreased to 40.7 thousand barrels per day (MBbls/d) from 42.4 MBbls/d a year ago.

Marketing, Supply and Logistics: It incurred a loss of $34.8 million against a $14.9 million profit in the year-ago quarter, primarily due to limited storage opportunities for butane and market backwardation. Operating and maintenance expenses marginally decreased to $10.6 million from the year-ago level of $10.9 million.

NGL volumes sold or processed in the third quarter came in at 151.2 MBbls/d, up from 78.5 MBbls/d in the year-ago period.

Expenses

Total operating expenses and others increased to $140.6 million from $132.7 million in the year-ago period.

Operation and maintenance costs marginally increased to $31.6 million from $31 million a year ago. General and administrative expenses also increased to $25.9 million for the September quarter from $19.6 million in third-quarter 2020.

Cash Flow

Distributable cash flow for the third quarter was recorded at $85.8 million, down from $86.5 million in the year-ago period.

Free cash flow after distributions was recorded at $17.5 million for the September quarter, down from $29.6 million in the year-ago period.

Balance Sheet

As of Sep 30, 2021, the partnership had $14.3 million in cash, down from $16.6 million at second quarter-end. Total debt of $2,025.1 million at third quarter-end decreased from $2,621.8 million at second quarter-end. The partnership had a long-term debt to capitalization of 62%.

View

Crestwood reiterated its 2021 adjusted EBITDA expectation at the $570-$600 million range. It expects to meet or surpass the upper limit of the range. The partnership reiterated estimates for free cash flow after paying distributions at the $150-$180 million band.

Furthermore, it expects capital spending related to growth projects of $35-$45 million. Maintenance capital is expected within $20-$25 million. Crestwood anticipates volumes from Bakken, Powder River Basin, Delaware and Barnett to increase in the coming days.

In the third quarter, the Zacks Rank #3 (Hold) firm received new long-term deals from Continental Resources, Inc. CLR for Powder River and Delaware basins’ assets. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On Oct 26, it agreed to acquire Oasis Midstream Partners LP OMP, the midstream unit of Oasis Petroleum Inc. OAS, for $1.8 billion. The move is expected to boost Crestwood’s footprint in major U.S. shales, primarily in Williston and Delaware Basins. The deal is expected to close in first-quarter 2022. The move is expected to add incremental annual cash flow of $20 million to Crestwood’s portfolio over the next few years. Also, the combined entity will likely save $25 million in annual cost synergies. Investors should note that the partnership expects the deal to enable it to boost distribution by 5% year over year to $2.62 per unit per annum.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Factors to Consider

The ongoing increase in residential customer volume due to acquisitions and organic means is likely to have increased the demand for water and wastewater services as well as boosted earnings in the third quarter.

Further, American Water’s third-quarter earnings are expected to have benefited from efficient cost management. New rates worth $146 million were implemented in its service territories, which is also likely to have boosted third-quarter earnings.

Expectations

The Zacks Consensus Estimate for third-quarter earnings and revenues is pegged at $1.52 per share and $1.1 billion, indicating year-over-year growth of 4.1% and 1.5%, respectively, from the year-ago reported figures.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for American Water this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: The company’s Earnings ESP is +1.10%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Water currently has a Zacks Rank #3.

Other Stocks to Consider

Here are a few other companies worth considering from the same sector that too have the right combination of elements to beat on earnings in the upcoming releases.

American States Water Company AWR is likely to come up with an earnings beat when it reports third-quarter 2021 results on Nov 1 after the market closes. It has an Earnings ESP of +1.96% and has a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Essential Utilities WTRG is likely to come up with an earnings beat when it reports third-quarter 2021 results on Nov 1 before the market opens. It has an Earnings ESP of +1.54% and a Zacks Rank of 3, currently.

Sempra Energy SRE is likely to come up with an earnings beat when it reports third-quarter 2021 results on Nov 5 before the market opens. It has an Earnings ESP of +0.59% and a Zacks Rank of 3, at present.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Quarter in Detail

The company’s Advisory Services segment reported a year-over-year revenue increase of 48% (46.2% local currency) to $2.4 billion. All business lines exceeded third-quarter 2019 levels. Operating profit came in at $522 million, significantly up from the year-ago period’s $287 million. Apart from solid revenue growth, cost-saving efforts executed last year contributed to more than 80% growth in the segment’s operating profit.

The segment’s rebound was led by capital market activity. Global property sales revenues jumped a whopping 93% (91% local currency) from the year-ago quarter’s weak levels. Global property sales revenues also came in 27% higher than the third-quarter 2019 level. Leasing activity continued to recover with global leasing revenues increasing 58% (57% local currency), year over year, and 7% above the third-quarter 2019 peak level.

The Global Workplace Solutions segment registered an increase of 8.2% (6.5% in local currency) in revenues to $4.2 billion. Operating profit increased 16.5% (14.4%) to $187 million. Facilities management experienced 6% (4% local currency) growth in revenues, with solid strength from local clients. The continued rebound in construction activity aided project management and witnessed 21% (19% local currency) revenue growth.

The Real Estate Investments segment recorded a 32% (27.7% in local currency) jump in revenues to $224 million. Operating profit increased significantly to $146 million from the year-ago period’s $71 million, reflecting impressive performance in both development services and investment management.

At the end of third-quarter 2021, assets under management reached a record high for the company and aggregated $133.1 billion, underlining growth of $4 billion ($5.8 billion local currency) from second-quarter 2021. This highlights higher asset valuations and net capital inflows, partly offset by unfavorable foreign currency movement.

During the September-end quarter, the company made in-fill acquisitions aggregating $21 million in cash and deferred consideration. In July, the company announced signing of an agreement to acquire a 60% ownership stake in Turner & Townsend Holdings Limited for $1.3 billion. An initial payment of roughly $700 million of this amount will be made in early November, when the transaction is anticipated to close.

Balance Sheet Position

CBRE Group exited third-quarter 2021 with cash and cash equivalents of $2.7 billion, up from $1.9 billion as of Dec 31, 2020.

As of Sep 30, 2021, the company had $5.8 billion in total liquidity. This comprised $2.7 billion in cash in addition to the ability to borrow a total of $3.1 billion under its revolving credit facilities, net of any outstanding letters of credit. The company’s net leverage ratio was (0.31X) as of the same date. This is significantly below CBRE’s primary debt covenant of 4.25X.

During the September-end quarter, the company repurchased more than one million shares at an average price of $97.55, spending around $100 million. As of Sep 30, 2021, it had $161.7 million of stock-repurchase capacity.

Currently, CBRE Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CBRE Group, Inc. Price, Consensus and EPS Surprise

CBRE Group, Inc. price-consensus-eps-surprise-chart | CBRE Group, Inc. Quote

We now look forward to the earnings results of other companies in the real estate sector like Jones Lang LaSalle Incorporated JLL, Newmark Group, Inc. NMRK and Cushman & Wakefield plc CWK, which are slated to be out next week.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise

Allison Transmission Holdings, Inc. price-consensus-eps-surprise-chart | Allison Transmission Holdings, Inc. Quote

Segmental Performance

Allison segregates revenues in terms of end markets served, which are as follows:

For the reported quarter, net sales in the North America On-Highway end market inched down 2% year over year to $275 million amid lower demand owing to supply disruptions and raw material constraints. The metric also missed the Zacks Consensus Estimate of $298 million.

For the July-September period, net sales in the North America Off-Highway end market jumped to $20 million from $1 million recorded in the year-ago period on higher demand for hydraulic fracturing applications. The metric also surpassed the Zacks Consensus Estimate of $6.75 million.

For the third quarter, net sales in the Defense end market contracted 30% year over year to $39 million on lower tracked vehicle demand. The figure also missed the consensus estimate of $47 million.

The Outside North America On-Highway end market’s net sales surged 31% year on year to $93 million for the September-end quarter, courtesy of growth initiatives and recovery of customer demand from pandemic-related disruptions in the corresponding period of 2020. The metric also topped the consensus mark of $89 million.

Net sales in the Outside North America Off-Highway end market skyrocketed 250% year on year to $14 million on higher demand from energy, mining and construction sectors. The metric, however, missed the consensus mark of $18 million.

Net sales in the Service Parts, Support Equipment & Other end market rose 6% year on year to $126 million for the reported quarter owing to higher demand for global service parts as well as support equipment. Nonetheless, the figure fell short of the consensus mark of $131 million.

Financial Position & ’21 View

Allison — whose peers include Magna International MGA, Adient plc ADNT, and Meritor MTOR — had cash and cash equivalents of $261 million on Sep 30, 2021 compared with $310 million as of 2020-end. As of Sep 30, long-term debt was $2,504 million, essentially unchanged from the 2020-end level. Adjusted free cash flow for the reported quarter was $153 million, up from the prior-year quarter’s $136 million.

Amid persistent supply chain disruptions, Allison has trimmed its full-year guidance. It now projects net sales in the band of $2,325-$2,400 million versus the prior estimate of $2,325-$2,475 million. Net income and adjusted EBITDA are now envisioned in the band of $395-$440 million and $795-$845 million, down from the previous projection of $395-$465 million and $795-$885 million, respectively. Adjusted free cash flow is expected within $415-$455 million, down from the prior guided range of $415-$475 million. Capex forecast remains unchanged in the band of $170-$180 million.

During the quarter under discussion, Allison — which presently carries a Zacks Rank #3 (Hold) — paid a quarterly dividend of 19 cents per share and bought back $100 million of common stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Revenue Details

Illinois Tool generated revenues of $3,556 million in the reported quarter, reflecting growth of 7.5% from the year-ago figure. Top-line results benefited from a 6.3% increase in organic sales and a 1.2% contribution from movements in foreign currencies.

However, the top line lagged the Zacks Consensus Estimate of $3,613 million.

Illinois Tool reports revenues under the segments discussed below:

Test & Measurement and Electronics’ revenues in the third quarter increased 12.9% year over year to $552 million. Revenues from Automotive OEM (Original Equipment Manufacturer) declined 9.4% to $647 million. Food Equipment generated revenues of $544 million, increasing 21.2% year over year.

Welding revenues were $425 million, growing 22.8% year over year. Construction Products’ revenues were up 4.8% to $478 million. Revenues of $459 million from Specialty Products reflected an increase of 9.3%. Polymers & Fluids’ revenues of $456 million grew 4.1% year over year.

Margin Profile

In the reported quarter, Illinois Tool’s cost of sales increased 9.7% year over year to $2,096 million. It represented 58.9% of the quarter’s revenues compared with 57.8% in the year-ago quarter. Selling, administrative, and research and development expenses expanded 3.8% to $581 million. It represented 16.3% of third-quarter revenues compared with 16.9% in the year-ago quarter.

Operating margin was 23.8% in the quarter, unchanged year over year. Enterprise initiatives and volume leverage each contributed 100 basis points (bps) to the operating margin while price/cost had an adverse impact of 200 bps. Interest expenses in the quarter decreased 5.8% year over year to $49 million. Effective tax rate in the quarter was 20.8%.

Balance Sheet and Cash Flow

Exiting the third quarter, Illinois Tool had cash and cash equivalents of $1,987 million, down 3.4% from $2,058 million recorded at the end of the last reported quarter. Long-term debt decreased 1.2% sequentially to $6,972 million.

In the third quarter, the company generated net cash of $619 million from operating activities, reflecting a decline of 9.4% from the year-ago quarter. Capital spending on the purchase of plant and equipment was $71 million, up 36.5%. Free cash flow was $548 million, reflecting a year-over-year decline of 13.2%.

Outlook

For 2021, Illinois Tool updated its financial projections. It now expects organic revenue growth of 11-12% compared with an increase of 11-13% mentioned previously. Total revenues are projected to increase 13-14% compared with 14-16% growth estimated earlier.

Foreign currency translation is expected to positively impact sales by 2% (lower than 3% mentioned earlier).

Earnings (GAAP) are expected to be $8.30-$8.50 per share, down from $8.55-$8.95 estimated previously. The revised projection suggests an increase of 27.5% (at the mid-point) from the previous year. On a dollar-for-dollar basis, the impact of a hike in raw material costs will be offset by gains from pricing actions, and, thus, will have a neutral impact on earnings.

Operating margin is expected to be 23.5-24.5% (lower than 24.5-25.5% mentioned previously). Volume leverage is likely to contribute more than 200 bps to the margin and enterprise initiatives are likely to contribute more than 100 bps. However, dilution from price/costs is expected to lower the margin by about 150 bps.

Free cash flow is anticipated to be 90% of net income (adjusted). In the year, the company is in track to buy back $1 billion worth of shares.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Industrial Products sector are Nordson Corporation NDSN, AZZ Inc. AZZ, and Brady Corporation BRC. While Nordson currently sports a Zacks Rank #1 (Strong Buy), AZZ and Brady carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson delivered an earnings surprise of 17.77%, on average, in the trailing four quarters.

AZZ delivered an earnings surprise of 25.47%, on average, in the trailing four quarters.

Brady delivered an earnings surprise of 2.49%, on average, in the trailing four quarters.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Factors at Play

Eaton’s third-quarter earnings are likely to have benefited from lower shares outstanding than the last-year level. The rollout of vaccines and an improvement in end-market conditions are expected to have increased the demand for its products, and boosted earnings.

Eaton completed the acquisition of Cobham Mission Systems and a 50% stake in Jiangsu YiNeng Electric’s busway business in China in the second quarter. Synergies from these acquired assets are expected to have contributed to earnings in the third quarter. The company’s September-quarter numbers are also expected to have gained from cost-savings initiatives. The Hydraulics business sale is part of Eaton’s transformation process and is expected to have led to the generation of higher year-over-year earnings in the third quarter.

Expectations

Third-quarter earnings are expected in the range of $1.72-$1.82 per share. It now expects organic revenue growth in the range of 11-13%. The company anticipates positive currency translation to add 1% to third-quarter earnings. Segment operating margin is expected in the range of 19-19.4% for the quarter.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.73 per share, indicating a 46.6% increase from the prior-year reported figure.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Eaton this time around. The combination of a positive Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here as you will see below.

Earnings ESP: Eaton has an Earnings ESP of +0.04%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Eaton carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to beat on earnings in the upcoming releases.

Columbus McKinnon Corporation CMCO is likely to come up with an earnings beat when it reports second-quarter fiscal 2022 results on Oct 28 before the market closes. It has an Earnings ESP of +5.26% and a Zacks Rank of 2, at present.

Reliance Steel & Aluminum Co. RS is likely to deliver an earnings beat when it reports third-quarter results on Oct 28. It has an Earnings ESP of +3.54% and sports a Zacks Rank #1, currently.

Tetra Tech Inc. TTEK is likely to pull off an earnings beat when it reports fourth-quarter fiscal 2021 earnings on Nov 17 after the market closes. It has an Earnings ESP of +0.50% and a Zacks Rank of 2, presently.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

O'Reilly Automotive, Inc. Price, Consensus and EPS Surprise

O'Reilly Automotive, Inc. price-consensus-eps-surprise-chart | O'Reilly Automotive, Inc. Quote

Financials, Share Repurchase & Costs

For the September-end quarter, selling, general and administrative expenses flared up 11.3% year on year to $1,063 million. Nonetheless, operating income edged up 4% to $754.6 million from $725 million reported in the prior-year period on higher sales. Net income amounted to $558.6 million, up from $527.2 million generated in the year-ago quarter.

During the reported quarter, O’Reilly repurchased 1.6 million shares for $943 million at an average price of $595.96 per share. As of Oct 28, the company had $786 million remaining under the current share-repurchase authorization.

It had cash and cash equivalents of $449.3 million as of Sep 30, 2021. Its long-term debt stands at $3,826.1 million, lower than the year-ago level of $4,122.4 million.

During the reported quarter, O’Reilly generated $852.5 million in cash from operating activities compared with the year-ago period’s $790 million. Capital expenditure totaled $118 million, almost on par with the year-ago quarter. Free cash flow rose 8.9% on a year-over-year basis to $722 million.

2021 Guidance Raised

For 2021, O’Reilly — which shares space with CarMax KMX, AutoZone AZO and Advance Auto Parts AAP in the same industry — now projects total revenues within $12.9-$13.2 billion, up from the prior guided range of $12.3-$12.6 billion. Earnings per share are envisioned within $29.25-$29.45 versus the previous view of $26.80-$27.00. It now expects comparable store sales to rise 10-12% versus growth of 5-7% projected earlier. Also, the Zacks Rank #2 (Buy) firm now envisions free cash flow in the band of $2-$2.3 billion, higher than the previous forecast of $1.5-$1.8 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

ServiceNow, Inc. Price, Consensus and EPS Surprise

ServiceNow, Inc. price-consensus-eps-surprise-chart | ServiceNow, Inc. Quote

The company’s expanding partner base is a positive. During the reported quarter, ServiceNow announced an expanded strategic partnership with Microsoft MSFT in order to strengthen its portfolio offerings for the hybrid workforce. The company introduced a new collaborative app for its Employee Center that integrates with Microsoft Teams. ServiceNow and Microsoft will also invest in co-innovation and go-to-market efforts across ServiceNow workflows and Teams.

Billing Details

Total billings, on a non-GAAP basis, rose 28.4% year over year to $1.46 billion. After adjusting for forex, total billings increased 27% year over year to $1.45 billion.

Subscription billings of $1.38 billion advanced 28% year over year. After adjusting for forex, subscription billings were $1.37 billion, up 26%.

Professional services and other billings increased 42% to $84 million. After adjusting for forex, professional services and other billings were $83 million, up 41%.

Operating Details

In the third quarter, non-GAAP gross margin was 81.2%, which contracted 110 basis points (bps) on a year-over-year basis.

Subscription gross margin of 85% contracted 100 bps year over year. Professional services and other gross margin were 17% compared with year-ago quarter’s figure of 19%.

Total operating expenses, on a non-GAAP basis, were $836 million in the reported quarter, up 28.8% year over year.

ServiceNow’s non-GAAP operating margin contracted 10 bps on a year-over-year basis to 25.9%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, ServiceNow had cash and cash equivalents, and short-term investments of $3.03 billion compared with $2.98 billion as of Jun 30, 2021.

During the reported quarter, cash from operations was $320 million compared with $300 million in the previous quarter.

ServiceNow generated free cash flow of $228 million in the quarter, down from $268 million reported in the prior quarter.

At the end of the third quarter, remaining performance obligations or RPO were $9.7 billion, surging 34% year over year.

Guidance

For fourth-quarter 2021, non-GAAP subscription billings are projected between $2.305 billion and $2.310 billion, which suggests an improvement of 26% year over year.

ServiceNow expects non-GAAP operating margin to be 22%.

For 2021, ServiceNow expects non-GAAP subscription billings to be $6.379-$6.384 billion, which suggests a rise of 28% from the year-ago reported figure.

ServiceNow continues to expect non-GAAP gross margin to be 85% and non-GAAP operating margin to be 25%. Moreover, non-GAAP free cash flow margin is expected to be 31.5%.

Zacks Rank & Stocks to Consider

Currently, ServiceNow has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Trimble TRMB and Cognex CGNX. Both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Trimble and Cognex are set to report their quarterly earnings on Nov 3 and Nov 4, respectively.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The auto retailer registered net sales of $6,497 million, outpacing the Zacks Consensus Estimate of $6,462 million. The top-line figure also rose 8.8% from the comparable year-ago period.

The company’s gross profit for the reported quarter increased 21.9% on a year-over-year basis to $1,165.7 million. The operating income also grew 32.9% from the prior-year period to $377.8 million.

For the September-end quarter, same-store retail unit sales decreased 7.6% year over year to 112,487. Within the Retail Automotive segment, same-store new-vehicle revenues edged down 3.1% year over year to $2,252.4 million, while same-store used-vehicle revenues grew 16.3% to $2,249.3 million.

Penske Automotive Group, Inc. Price, Consensus and EPS Surprise

Penske Automotive Group, Inc. price-consensus-eps-surprise-chart | Penske Automotive Group, Inc. Quote

Segmental Performance

For the July-September period, revenues in the Retail Automotive segment came in at $5,634.9 million, increasing from $5,258 million in third-quarter 2020. Gross profit of $1,010.9 million compared favorably with $849.7 million reported in the year-ago quarter and topped the consensus mark of $969 million.

Revenues in the Retail Commercial Truck segment increased to $717.3 million from the year-ago level of $590.9 million. Consequently, gross profit for the segment was $115.3 million, up from the year-earlier level of $73.1 million and ahead of the consensus mark of $106 million.

Revenues in the Commercial Vehicles Australia/Power Systems for the reported quarter totaled $145.1 million, up from $122.7 million recorded in the year-ago period. Gross profit came in at $39.6 million, exceeding $33.7 million in third-quarter 2020 and surpassing the Zacks Consensus Estimate of $32.4 million.

Financial Tidbits

For the quarter under review, SG&A costs totaled $757.7 million, up 17.8% year over year. Penske — whose peers include AutoNation AN, Lithia Motors LAD and Sonic Automotive SAH — had cash and cash equivalents of $119.2 million as of Sep 30, 2021, up from $49.5 million at 2020 end. The long-term debt amounted to $1,356.7 million, down from $1,602.1 million as of Dec 31, 2020.

The Zacks Rank #3 (Hold) company declared a dividend hike last month. It increased its payout to 46 cents, which will be payable on Dec 1 to shareholders on record as of Nov 10. In the first nine months of 2021, Penske repurchased 2,524,938 shares for $219.8 million, including two million shares bought back in the quarter under review. The company had $71.3 million remaining under the current share-repurchase authorization at the end of third-quarter 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Key Factors to Note

Despite the coronavirus-induced disruptions, AMETEK’s third-quarter results are expected to reflect positive contributions from acquisitions.

Magnetrol International, and Crank Software buyouts are anticipated to have driven growth in the Electronic Instruments segment in the quarter under review. Moreover, acquisitions of Motec, Forza, Telular, Gatan, Intellipower and Spectro Scientific are expected to have continued benefiting the segment.

The impacts of a strong materials analysis business are anticipated to get reflected in the segment’s third-quarter sales.

The Electromechanical Group segment’s sales are likely to have gained from the Pacific Design Technologies and FMH Aerospace buyouts in the to-be-reported quarter. Cost-mitigation strategies are anticipated to have aided the operation performance of the segment in the quarter under review.

The company’s proper execution of its core growth strategies — including operational excellence, global market expansion, investments in product development and acquisitions — is expected to have driven the third-quarter performance.

AMETEK’s focus on cash flow generation is anticipated to have aided capital deployment activities in the to-be-reported quarter.

Apart from these, the impacts of strengthening momentum across the AMETEK Growth Model are expected to get reflected in the to-be-reported quarterly results.

However, the coronavirus pandemic-led disruptions are anticipated to have been headwinds for the company’s segments.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for AMETEK this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AMETEK has an Earnings ESP of +1.18% and a Zacks Rank #4.

Stocks to Consider

Here are some stocks that you may consider as our model shows that these have the right combination of elements to beat on earnings this season. 

Applied Materials AMAT has an Earnings ESP of +0.52% and a Zacks Rank of 2 at present. 

HP Inc. HPQ has an Earnings ESP of +1.89% and it currently sports a Zacks Rank of 1. 

NetApp, Inc. NTAP has an Earnings ESP of +3.70% and a Zacks Rank of 2 at present.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Total revenues were $408.7 million in the reported quarter, down 14% from the year-ago period’s figure. Sales lagged the Zacks Consensus Estimate of $432 million.

Shares of BioMarin have declined 18.2% so far this year compared with the industry’s decrease of 9.6%.

Image Source: Zacks Investment Research

Quarterly Details

Product revenues (including Aldurazyme) were $393.8 million in the quarter, down 14.5% year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) decreased 12.0% year over year to $369.5 million. Royalty and other revenues were $14.9 million in the quarter, down 7.1%.

In the phenylketonuria (“PKU”) franchise, Kuvan revenues declined 45% to $67.7 million due to generic competition as the drug lost U.S. market exclusivity in October 2020. Palynziq injection sales grossed $60.7 million in the quarter, up 32% year over year, driven by the growing number of U.S. patients who have now achieved maintenance dosing as well as new patients initiating therapy.

Naglazyme sales decreased 7% to $71.2 million. Vimizim contributed $136.9 million to total revenues, which went down 7% year over year. Lower sales of both Naglazyme and Vimizim were driven by unfavorable timing of orders from the Middle East and Europe. Naglazyme and Vimzim revenues vary on a quarterly basis, primarily according to the timing of central government orders from some countries.

Brineura generated sales of $32.9 million in the quarter, up 30% year over year. Management stated that Brineura maintained a strong patient compliance and continued to grow on strong underlying demand.

Product revenues from Aldurazyme totaled $24.4 million, down 40% year over year.

Sanofi’s SNY subsidiary, Genzyme, is BioMarin's sole customer for Aldurazyme, and is responsible for marketing and selling Aldurazyme to third parties. During the reported quarter Aldurazyme sales declined due to unfavorable timing of product fulfillment to Genzyme.

R&D expenses increased 6.4% year over year to $133.7 million while SG&A expenses marginally increased 0.8% to $151.3 million.

2021 Guidance

BioMarin raised the lower end of its revenue guidance range for the year. The company now expects total revenues in the range of $1.82-$1.88 billion compared with the earlier projection of $1.79-$1.88 billion. The Zacks Consensus Estimate for the same stands at $1.85 billion.

Vimizim sales are expected in the range of $595-$620 million compared with the previous guidance of $580-$620 million. Kuvan sales are anticipated in the range of $265-$290 million compared with the previous expectation of $260-$290 million. Palynziq sales are expected in the range of $230-$260 million compared with the previous range of $220-$260 million. Naglazyme sales are expected between $375-$405 million, unchanged from the previous projection.

Brineura sales are expected within $120-$140 million, which is also unchanged from its previous expectation.

R&D costs are expected in the $635-$675 million band, which was previously expected within $645-$685 million. SG&A expenses are anticipated in the range of $735-$775 million, unchanged from the previous expectation.

The company now expects adjusted net income in the range of $215-$255 million, which was earlier expected in the band of $190-$240 million.

Pipeline Update

In August 2021, the European Commission approved BioMarin’s once-daily injection, Voxzogo (formerly known as vosoritide), to treat achondroplasia, a common form of dwarfism in children from the age of two until after puberty, when they attain final adult height.

The commercial launch of Voxzogo is currently underway and the drug generated sales worth $0.1 million in this brief period of time.

In the United States, the new drug application or NDA for Voxzogo for the treatment of achondroplasia is under priority review with a PDUFA target date of Nov 20, 2021. Marketing authorization for Voxzogo is also under review in Japan, Brazil and Australia, with potential approvals expected in 2022.

We note that BioMarin is developing the investigational gene therapy valoctocogene roxaparvovec for treating adult patients with severe hemophilia A. In July 2021, the European Medicines Agency (“EMA”) validated the marketing authorization application for valoctocogene roxaparvovec, with an opinion from the EMA’s Committee for Medicinal Products for Human Use expected in the first half of 2022.

Last August, the FDA issued a complete response letter to valoctocogene roxaparvovec’s biologics license application (“BLA”). The FDA asked for two-year follow-up data on annualized bleed rates from the ongoing phase III GENEr8-1 study to have additional evidence of a durable effect. A BLA on the same is expected to be re-filed to the regulatory body in the second quarter of 2022.

This apart, in September 2021, the FDA placed a clinical hold on BioMarin’s phase I/II study — PHEarless — evaluating its AAV5-phenylalanine hydroxylase gene therapy candidate, BMN 307. The study was evaluating ascending doses of the candidate in adult patients with PKU.

BioMarin has temporarily halted enrollment in the study until the investigation is completed. The company is currently working with the FDA and other health authorities to decide a future path for the development of BMN 307 in PKU patients.

Zacks Rank & Stocks to Consider

BioMarin currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Amicus Therapeutics, Inc. FOLD and Athenex, Inc. ATNX, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amicus Therapeutics’ loss per share estimates have narrowed 1.3% for 2021 and 37.5% for 2022, over the past 60 days.

Athenex’s loss per share estimates have narrowed 9% for 2021 and 9.2% for 2022, over the past 60 days.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Activision Blizzard, Inc Price and EPS Surprise

Activision Blizzard, Inc price-eps-surprise | Activision Blizzard, Inc Quote

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

Activision is expected to have benefited from the popularity of its franchises, including Call of Duty ("COD"), Overwatch, Hearthstone, World of Warcraft, Candy Crush Saga and Candy Crush Friends Saga, in the to-be-reported quarter.

The expanding user bases of COD, Hearthstone, World of Warcraft and King’s franchises are expected to have boosted in-games spending, thereby driving net bookings and the top line in the to-be reported quarter.

Activision expects net bookings of $1.85 billion for the third quarter of 2021.

Per Sensor Tower data, Candy Crush Saga was the fifth top-grossing mobile game globally in September, an improvement from the eighth position in August and seventh position in July.

Strong video game spending in the quarter is expected to have benefited Activision. Per Venturebeat, which cited NPD data, consumer spending on video games increased 10%, 7% and 3% year over year in July, August and September, respectively.

However, lack of major game releases is expected to have hurt active user growth, thereby affecting the top line in the to-be reported quarter.

Markedly, Activision launched Diablo II: Resurrected on Sep 23, which is not expected to have a major impact on user engagement, given the short span of time it was available in the third-quarter.

Intensifying competition from Chinese game publishers like Tencent TCEHY and NetEase NTES is expected to have hurt Activision’s top-line growth in the third quarter. Tencent’s Honor of Kings and PUBG Mobile, and NetEase’s Harry Potter: Magic Awakened were the second, third and fourth top-grossing mobile games in September, per Sensor Tower data.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Activision has an Earnings ESP of -3.48% and carries a Zacks Rank #3, currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

A Stock to Consider

Here is a company you may want to consider, as our model shows that it has the right combination of elements to post an earnings beat in its upcoming release:

Apple AAPL has an Earnings ESP of +3.96% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Inside the Headlines

Gibraltar reported adjusted earnings of 91 cents per share, missing the Zacks Consensus Estimate of $1.23 by 26% and decreasing 7.1% year over year. The downside was owing to steepened materials and transportation inflation as well as heightened supply chain issues.

Gibraltar Industries, Inc. Price, Consensus and EPS Surprise

Gibraltar Industries, Inc. price-consensus-eps-surprise-chart | Gibraltar Industries, Inc. Quote

Quarterly net sales of $369.4 million lagged the consensus mark of $377 million by 2%. The top line increased 24.5% year over year owing to 3.9% organic growth driven by pricing, end-market demand in Renewables and Infrastructure, and participation gains primarily in Residential. Acquisitions contributed 20.6% to the top line.

The company’s order backlog was $385 million (at quarter-end), up 10% year over year driven by robust end-market demand in the Renewable Energy segment.

Segmental Details

Renewable Energy: Net sales in the segment increased 85.5% from the year-ago period to $130.2 million for the third quarter. The upside was primarily driven by solid contributions from both legacy and TerraSmart businesses. Owing to strong customer bookings across all product lines (up 30.4%), backlog increased to a record $184 million, up 80% from the last year.

Adjusted operating margins contracted 150 basis points (bps) year over year to 11.4%. Margins were impacted by inefficient project management and field operations due to supply chain disruptions for solar panels as well as other key components.

Residential Products: Quarterly net sales in the segment increased 13.1% year over year to $171.5 million. The upside can be primarily attributed to 17.2% organic growth and 4.4% from the Architectural Mailboxes buyout. Also, additional price actions, recent weather-related repair demand and participation gains supported the growth.

Yet, adjusted operating margins of 17.2% reflected a decline of 430 bps for the quarter.

Agtech: Sales in the segment reduced 15.5% year over year to $49 million, primarily because of delays in produce project schedules due to imported glass for roofing systems, and project delays related to state licensing as well as permit approvals in the cannabis businesses. Backlogs were up 22% in the year-to-date period and new orders increased 44% sequentially. The pipeline of expected new orders in all three businesses — Produce, Cannabis, and Commercial — remains strong. The trend is expected to continue in the fourth quarter and 2022.

Adjusted operating margins contracted 500 bps year over year to 5.1%, primarily impacted by lower sequential sales, and greater inflation as well as supply chain disruptions.

Infrastructure: Sales in the segment grew 11.3% year over year to $18.7 million. The upside was primarily driven by strong demand for both fabricated and non-fabricated products as well as improving State D.O.T. and project funding on overall economic recovery.

Adjusted operating margins declined 480 bps to 8.8% owing to product line mix, rubber supply issues, production inefficiencies related to production capacity expansion and price/cost alignment.

Costs & Margins

For the third quarter, selling, general and administrative expenses increased 20.6% year over year to $45.3 million. As a percentage of sales, the metric improved 40 bps year over year to 12.3%. Meanwhile, adjusted operating margin contracted 310 bps year over year to 11.1%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, Gibraltar had cash and cash equivalents worth $13.9 million compared with $32.1 million at 2020-end.

For the first nine months of 2021, net cash used in operating activities totaled $16.5 million against $56.2 million cash provided by operating activities in the corresponding year-ago period.

2021 Guidance Updated

Based on the ongoing business dynamics, Gibraltar has raised the lower limit of the previous guidance for revenues to $1.31-$1.35 billion, signaling year-over-year growth of 27-31%. The consensus estimate for 2021 revenues is currently pegged at $1.34 billion. Yet, it has reduced its adjusted earnings guidance to $2.95-$3.06 per share from the prior projection of $3.30-$3.47, indicating an 8-12% year-over-year rise. The consensus mark for the same is pegged at $3.41 per share. The reduced earnings guidance is mainly driven by the current cost environment, supply chain disruptions, and incremental costs along with potential labor and productivity impacts associated with future COVID mandates.

For the fourth quarter, adjusted earnings are likely to be within 71-82 cents per share, with a year-over-year growth rate of 21-39%. The consensus mark for the same is pegged at 85 cents per share.

Zacks Rank & Peer Releases

Gibraltar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masco Corporation MAS reported better-than-expected results for third-quarter 2021. Earnings and net sales surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, net sales improved on strong demand across the categories and channels but adjusted earnings declined owing to supply chain constraints and inflation.

Owens Corning OC reported third-quarter 2021 results, wherein earnings and net sales surpassed their respective Zacks Consensus Estimate as well as improved on a year-over-year basis. The solid quarterly results were backed by strong demand across businesses despite supply chain disruptions with limited inventories.

Armstrong World Industries, Inc. AWI recently reported third-quarter 2021 results, wherein earnings missed the Zacks Consensus Estimate but revenues beat the same. Nonetheless, both the metrics grew on a year-over-year basis.

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Aspen Technology, Inc. Price, Consensus and EPS Surprise

 

Aspen Technology, Inc. price-consensus-eps-surprise-chart | Aspen Technology, Inc. Quote

Aspen Technology’s shareholders will get $87 per share in cash and 0.42 shares of common stock in the newly-formed company against each share. The deal is expected to be concluded by the second quarter of 2022, subject to regulatory, shareholders’ and customary approvals.

The new company will have more than $1 billion in revenues with over 3,000 customer base, noted Aspen Technology.

In the quarter under review, total bookings were $128.2 million, up 30% year over year

Following the announcement, shares are trading down 0.3% in the premarket trading on Oct 28. In the past year, shares of Aspen Technology have returned 34.2% compared with the industry’s rally of 49%.

Quarter in Detail

License revenues (59.6% of revenues) soared 31.1% year over year to $81.1 million.

Maintenance revenues (35.5%) improved 2.9% year over year to $48.2 million.

Services and other revenues (4.9%) increased 7.2% from the year-ago quarter’s figure to $6.7 million.

As of Sep 30, 2021, the annual spend (which Aspen Technology defines as the annualized value of all term license and maintenance contracts at the end of the quarter) amounted to $630 million, up 5.6% year over year and 1.4% quarter over quarter.

Margins

Gross profit increased 21.7% year over year to $121.1 million. As a percentage of total revenues, the figure expanded 260 basis points (bps) on a year-over-year basis to 89.1%.

Total operating expenses increased 24.4% from the year-ago quarter’s figure to $81.3 million, due to higher spend related to general & administrative, research and development as well as selling and marketing.

Non-GAAP operating income totaled $55.4 million compared with $42.7 million reported in the prior-year quarter. Non-GAAP operating margin was 40.7% compared with 37.2% operating margin reported in the year-ago quarter.

Balance Sheet & Cash Flow

As of Sep 30, 2021, cash and cash equivalents were $248 million compared with $379.9 million as of Jun 30, 2021. The company’s total borrowings, net of debt issuance costs, stood at $289.4 million as of Sep 30, 2021.

The company generated $32.7 million cash from operations compared with $103.2 million in the previous quarter. Non-GAAP free cash flow was $33 million in the fiscal first quarter.

The company repurchased 1.1 million shares in the fiscal first quarter for $150 million.

In June 2021, Aspen Technology announced that its board of directors approved a new $300-million share buyback authorization to be executed in the fiscal year 2022. The new buyback authorization includes an accelerated share repurchase ("ASR") agreement to repurchase up to $150 million of the company’s common shares in the first quarter of fiscal 2022. The remaining $150 million worth of shares will be repurchased over the next three quarters of fiscal 2022.

Fiscal 2022 View

For fiscal 2022, Aspen Technology expects revenues in the range of $702-$737 million. The Zacks Consensus Estimate for revenues is pegged at $720.1 million.

Annual spend growth rate is expected between 5% and 7%, while total bookings are projected in the range of $766-$819 million.

Non-GAAP net income is anticipated in the range of $4.75-$5.13 per share compared with $4.79-$5.17 per share guided earlier. The consensus mark for earnings is pegged at $4.97.

Management projects non-GAAP operating income in the range of $361-$391 million. Free cash flow is anticipated between $275 million and $285 million.

Zacks Rank & Stocks to Consider

Currently, Aspen Technology carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector worth considering are Salesforce CRM, HP Inc HPQ and Jabil JBL. All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Salesforce, HP Inc and Jabil is currently pegged at 16.8%, 12.7% and 12%, respectively.

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Quarterly Update

Revenues from the semiconductor market (65.8% of total revenues) increased 35.9% year over year to $487.9 million, owing to robust performance by the Vacuum & Analysis division.
 

MKS Instruments, Inc. Price, Consensus and EPS Surprise

MKS Instruments, Inc. price-consensus-eps-surprise-chart | MKS Instruments, Inc. Quote

Revenues from advanced markets (34.2% of total revenues) were $254.1 million, up 10.1% year over year. The upside can be attributed to recovery in demand trends for Advanced Electronics applications.

Segment-wise, Vacuum and Analysis (65.1% of total revenues) revenues surged 33.7% year over year to $483.1 million.

Light and Motion division revenues (28.1% of total revenues) increased 18.7% year over year to $208.7 million.

Equipment & Solutions segment revenues (6.8% of total revenues) were $50.2 million, down 4.6% year over year.

Operating Details

In the third quarter, adjusted gross margin expanded 190 basis points (bps) on a year-over-year basis to 47%.

Adjusted EBITDA increased 44.6% year over year to $222 million. Adjusted EBITDA margin expanded 390 bps on a year-over-year basis to 29.9%.

Research & development, and sales, general & administrative expenses, as a percentage of revenues, declined 20 bps and 180 bps on a year-over-year basis, respectively.

MKS Instruments reported non-GAAP operating income of $200.9 million, up 47.3% year over year. Adjusted operating margin expanded 400 bps on a year-over-year basis to 27.1%.

Balance Sheet

As of Sep 30, 2021, MKS Instruments had cash and short-term investments of $879.6 million compared with $1.04 billion as of Jun 30, 2021.

Total debt as of Sep 30, 2021, was $818.7 million. Secured term loan principal outstanding as of Sep 30, 2021, was $827 million. The company also had $100 million of incremental borrowing capacity under an asset-based line of credit, subject to certain borrowing base requirements.

Cash flow from operations was $153.1 million in the second quarter compared with the previous quarter’s figure of $165.2 million. Free cash flow was $132.6 million compared with $148.9 million reported in the previous quarter.

MKS Instruments paid out dividends worth $12 million during the reported quarter.

Q4 Guidance

For the fourth quarter of 2021, MKS Instruments anticipates revenues to be $760 million (+/- $30 million). The Zacks Consensus Estimate for revenues is currently pegged at $738 million, indicating growth of 11.8% from the figure reported in the year-ago quarter.

Non-GAAP earnings are expected to be $2.85 per share (+/- 26 cents).

The consensus mark for earnings is currently pegged at $2.87 per share, suggesting an increase of 22.7% from the figure reported in the year-ago quarter.

Zacks Rank & Stocks to Consider

Currently, MKS Instruments has a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Apple AAPL, Trimble TRMB and Cognex CGNX. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apple, Trimble and Cognex are set to report their quarterly earnings on Oct 28, Nov 3 and Nov 4.

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Barring one-time items, adjusted earnings were 60 cents per share that missed the Zacks Consensus Estimate of 71 cents.

Newmont reported revenues of $2,895 million, down around 9% year over year.  The figure missed the Zacks Consensus Estimate of $3,126.5 million. The downside was due to lower average realized gold prices and lower gold sales volumes.

Newmont Corporation Price, Consensus and EPS Surprise

 

Newmont Corporation price-consensus-eps-surprise-chart | Newmont Corporation Quote

Operational Highlights

Newmont's attributable gold production in the third quarter declined 6% year over year to 1.45 million ounces in the quarter, due to lower throughput at Nevada Gold Mines and Tanami. Reduced throughput, grade milled and recovery at Boddington also led to the downside.

Average realized prices of gold fell 7.1% year over year to $1,778 per ounce.

The company’s costs applicable to sales (CAS) for gold was $1,175 per ounce, up 4% year over year.

All-in sustaining costs (AISC) for gold increased 10% year over year at $1,120 per ounce, mainly due to higher CAS per ounce and elevated sustaining capital spend. This was partly offset by lower treatment and refining costs.

Regional Performance

North America: Third-quarter attributable gold production in North America was 384,000 ounces, down 7% year over year. Gold CAS in the region was $800 per ounce, up 5% year over year.

South America: Attributable gold production in South America was 188,000 ounces, up 14% year over year. Gold CAS in the region rose 8% on a year-over-year basis to $958 per ounce.

Australia: Attributable gold in the region was 274,000 ounces, down 11% year over year. Gold CAS in the region rose 14% year over year to $788 per ounce.

Africa: Production in the region totaled 210,000 ounces of gold in the quarter, down 8% year over year. Gold CAS was $886 per ounce, up 28% year over year.

Nevada: Production totaled 308,000 ounces of gold in the quarter, down 9% year over year. Gold CAS was $768 per ounce, up 1% year over year.

Financial Position

The company ended the quarter with cash and cash equivalents of $4,636 million, down 3.9% year over year. At the end of the quarter, the company had long-term debt of $4,990 million, down 17.2% year over year.

Net cash from continuing operations amounted to $1.1 billion and free cash flow was $735 million in the quarter.

Outlook

For 2021, Newmont now expects attributable gold production of 6 million ounces, down from 6.5 million ounces expected earlier. The company also expects gold CAS to be $790 per ounce and AISC to be $1,050 per ounce, up from the earlier view of $750 per ounce and $970 per ounce, respectively.

Newmont stated that Boddington faced issues from severe weather and Nevada Gold Mines is also witnessing headwinds. The revised upside in cost outlook includes the impact from lower production volumes as well as elevated royalties and production taxes at higher gold prices.

Price Performance

Newmont’s shares have declined 4.6% in the past year against the 19.3% rally of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Newmont currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, The Chemours Company CC and Olin Corporation OLN.

Nucor has a projected earnings growth rate of around 580.2% for the current year. The company’s shares have soared 132.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.9% for the current year. The company’s shares have gained 41.1% in the past year. It currently carries a Zacks Rank #2 (Buy).

Olin has an expected earnings growth rate of around 700% for the current year. The company’s shares have surged 238.3% in the past year. It currently flaunts a Zacks Rank #1.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Barring one-time items, adjusted earnings per share came in at 60 cents. The bottom line missed the Zacks Consensus Estimate of 61 cents per share.

The company generated revenues of $974.1 million, down 0.7% year over year. The top line surpassed the Zacks Consensus Estimate of $953.4.

Agnico Eagle Mines Limited Price, Consensus and EPS Surprise

 

Agnico Eagle Mines Limited price-consensus-eps-surprise-chart | Agnico Eagle Mines Limited Quote

Operational Highlights

Payable gold production was up 6.3% year over year to 523,706 ounces in the reported quarter. The figure excludes gold production at Hope Bay. Including Hope Bay, payable gold production was at a new record of 541,663 ounces in the quarter.

Total cash costs per ounce for gold were $765, almost flat year over year. All-in sustaining costs (AISC) were $1,059 per ounce in the quarter, including Hope Bay.

Financial Position

Agnico Eagle ended the quarter with cash and cash equivalents of $241.5 million, down 23.6% year over year. Long-term debt was around $1,342.1 million, down 14.2% year over year.

Total cash from operating activities amounted to $291 million in the third quarter, down 37.1% year over year.

Outlook

The company expects gold production for 2021 to be 2,047,500 ounces. It also projects total cash costs per ounce of $700-$750 and AISC of $950-$1,000 per ounce for 2021.

The forecast for capital expenditures for 2021 is roughly $803 million.

Price Performance

Shares of Agnico Eagle have declined 27.9% in the past year compared with a 16.3% fall of the industry.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

Agnico Eagle currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, The Chemours Company CC and Olin Corporation OLN.

Nucor has a projected earnings growth rate of around 580.2% for the current year. The company’s shares have soared 132.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.9% for the current year. The company’s shares have gained 41.1% in the past year. It currently carries a Zacks Rank #2 (Buy).

Olin has an expected earnings growth rate of around 700% for the current year. The company’s shares have surged 238.3% in the past year. It currently flaunts a Zacks Rank #1.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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In the last reported quarter, the upstream energy company’s adjusted earnings per share of $1.27 comfortably beat the Zacks Consensus Estimate of $1.15, primarily due to increased production volumes attributed to the Concho acquisition and rising realized commodity prices. Production from the Lower 48, Canada, Europe and other regions marked an increase.

Let’s see how things have shaped up prior to the third-quarter earnings announcement.

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter earnings per share of $1.51 has witnessed six upward revisions and one downward movement by firms in the past 30 days. This estimate is indicative of a 587.1% increase from the year-ago reported figure. Similarly, the Zacks Consensus Estimate for third-quarter revenues is pegged at $11.3 billion, suggesting a jump of 157.8% from the year-ago reported figure.

The upstream firm beat earnings estimates thrice in the trailing four quarters and missed the same once, delivering an average surprise of 8.3%. This is depicted in the graph below.

What the Quantitative Model Suggests

Our proven model predicts an earnings beat for ConocoPhillips this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Earnings ESP for the company is currently +1.85%. This is because the Most Accurate Estimate is pegged at $1.53 per share, higher than the Zacks Consensus Estimate of $1.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.  

Zacks Rank: ConocoPhillips currently holds a Zacks Rank #1.

Factors Driving the Better-Than-Expected Earnings

Being primarily involved in the exploration and production of oil and natural gas, ConocoPhillips’ earnings and revenues are directly related to commodity prices. The Zacks Consensus Estimate for average realized crude oil price for the third quarter is pegged at $69 per barrel, indicating a significant increase from $39.45 a year ago. Also, the consensus estimate for adjusted average natural gas price is pegged at $4.61 per thousand cubic feet, suggesting an increase from $2.70 in the prior-year period.

The Zacks Consensus Estimate for overall production is pegged at 1,529 thousand barrels of oil equivalent per day (MBoe/d), indicating an increase from 1,067 MBoe/d in the year-ago quarter. The consensus estimate for crude oil production is 815 thousand barrels per day (MBbls/d), signaling a rise from 548 MBbls/d a year ago.

Therefore, increased production, and improved oil and gas prices are likely to have led to a year-over-year rise in profit levels, and positioned the company for an earnings beat.

Other Stocks That Warrant a Look

Here are some other companies from the Energy space that you may also want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in the upcoming quarterly reports:

MPLX LP MPLX has an Earnings ESP of +3.81% and a Zacks Rank of 2. It is scheduled to report third-quarter results on Nov 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources, Inc. EOG has an Earnings ESP of +2.16% and is a Zacks #1 Ranked player. The company is scheduled to release third-quarter results on Nov 4.

Continental Resources, Inc. CLR has an Earnings ESP of +3.81% and a Zacks Rank #1. The firm is scheduled to release quarterly earnings on Nov 3.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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Earnings & Revenue Discussion

Yum China Price, Consensus and EPS Surprise

 

Yum China price-consensus-eps-surprise-chart | Yum China Quote

During third-quarter 2021, the company reported adjusted diluted earnings of 22 cents. The figure missed the Zacks Consensus Estimate of 26 cents by 15.4%. The bottom line declined 66.7% from 66 cents reported in the year-ago quarter.

Quarterly revenues of $ 2,554 million beat the consensus mark of $2,518 million by 1.5%. The top line increased 8.8% on a year-over-year basis. Excluding foreign currency translation, the top line increased 2% year over year.

Total system sales in the reported quarter rose 1% year over year. System sales at both KFC and Pizza Hut moved up by 1%. However, same-store sales declined 7% year over year, primarily due to a fall of 8% at KFC and 5% at Pizza Hut.

Operating Highlights

During third-quarter 2021, total costs and expenses increased 33% year over year to $2,376 million compared with $1,792 million in the year-ago quarter. The upsurge can primarily be attributed to a 13% rise in food and paper costs, a 29% surge in payroll and employee benefits and a 15% rise in occupancy and other operating expenses.

Restaurant margin in the quarter under review was 12.2%, down 640 basis points from the year-ago quarter’s levels. The downside was primarily caused by sales deleveraging, stepped-up promotions, wage inflation and increased rider cost associated with rising delivery volume.

During the quarter, adjusted operating profit totaled $168 million, down 48% from the year-ago quarter’s levels. Adjusted net income amounted to $96 million compared with $263 million in the prior-year quarter.

Balance Sheet

As of Sep 30, 2021, cash and cash equivalents came in at 1,278 million compared with $1,209 million as of Jun 30, 2021. Inventories during the third quarter came in at $390 million compared with $380 million in the previous quarter.

During the third quarter, the company repurchased $33.6 million of stock at an average price of $58.56. As of Sep 30, the company had approximately $658 million available for the buyback program.

Meanwhile, the company declared a quarterly cash dividend of 12 cents per common share. The dividend will be payable on Dec 16, 2021, to shareholders of record as of Nov 24, 2021.

Unit Development and Other Updates

During third-quarter 2021, Yum China opened 524 new restaurants owing to the development of the KFC and Pizza Hut brands. As of Sep 30, the company’s total restaurant count stood at 11,415, up 1,265 stores year over year.

During the quarter under review, the company’s delivery contributed nearly 34% of KFC and Pizza Hut's company sales, up nearly six percentage points from the prior-year quarter.

Digital orders during the quarter accounted for 87% of KFC and Pizza Hut's company sales compared with 78% reported in the previous-year quarter. Loyalty programs of KFC and Pizza Hut led to year-over-year growth. During the third quarter, KFC and Pizza Hut loyalty programs increased to more than 350 million members.

2021 Outlook

Yum China expects to open approximately 1,700 new stores in 2021 compared with the prior estimate of 1,300 stores. The company anticipates solid expansion related to KFC and Pizza Hut stores. Capital expenditures in 2021 are anticipated at $700-800 million.

Zacks Rank & Key Picks

Yum China currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the Zacks Retail - Restaurants industry space include Noodles & Company NDLS, Dave & Buster's Entertainment, Inc. PLAY and Papa John's International, Inc. PZZA, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Noodles & Company’s 2021 earnings are expected to surge 182.8%.

Dave & Buster's has a trailing four-quarter earnings surprise of 201.8%, on average.

Papa John's has three-five-year earnings per share growth rate of 15%.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Inside the Headlines

The company’s third-quarter adjusted earnings of $2.52 per share beat the consensus mark of $2.51 by 0.4%. Also, the said metric improved 48.2% on a year-over-year basis.

Masco Corporation Price, Consensus and EPS Surprise

Masco Corporation price-consensus-eps-surprise-chart | Masco Corporation Quote

Net sales of $2.21 billion topped the consensus mark of $2.15 billion by 2.8% and increased 15.8% year over year. The uptrend was mainly backed by a robust U.S. residential housing market, and stronger commercial and industrial markets.

Segment Details

Net sales in the Composites segment increased 13% year over year to $591 million. The upside was driven by strong commercial performance, with its ongoing strategy to focus on higher-value applications driving favorable mix. Also, strength in the demand for higher-value applications and key geographies added to the positives. Earnings before interest and taxes (EBIT) margin of 17% improved 600 basis points or bps from the year-ago quarter.

The Insulation segment’s net sales came in at $815 million, up 20% year over year. The solid improvement was mainly owing to strong volume and favorable pricing. EBIT margin also expanded 400 bps to 15%.

The Roofing segment’s net sales jumped 14% year over year to $869 million. The U.S. asphalt shingle market fell 9% from the year-ago level, while U.S. shingle volumes were up marginally. High realization on the back of previously announced price increases helped it in offsetting accelerating asphalt, and other material and delivery inflation. EBIT margin, however, contracted 200 bps year over year to 24%.

Operating Highlights

Adjusted EBIT for the quarter totaled $400 million, up 38.4% on a year-over-year basis.

Balance Sheet

As of Sep 30, 2021, the company had cash and cash equivalents of $920 million compared with $717 million at 2020-end. Long-term debt — net of current portion — totaled $2.96 billion, up from $3.13 billion at 2020-end. Owens Corning had $2 billion of available liquidity at third quarter-end.

For the first nine months of 2021, net cash provided by operating activities was $1,168 million compared with $717 million in the comparable year-ago period. Free cash flow came in at $400 million for the reported quarter, up from $425 million a year ago.

During third-quarter 2021, the company repurchased 1.7 million shares of common stock for $160 million. As of Sep 30, 2021, it returned $516 million to shareholders through share repurchases and dividends. At third quarter-end, 4.9 million shares were available for repurchase under the current authorization.

Fourth-Quarter 2021 Outlook

For the ongoing quarter, the company expects the U.S. residential market to remain strong, and commercial and industrial markets to strengthen.

Insulation: For the North American residential fiberglass insulation business, it expects volume to be up in mid-high single digits. Price realization is expected to be similar to the third quarter. In the technical and global insulation businesses, volumes are expected to rise in low- to mid-single digits, with increasing demand for its products in global building and construction applications. The company anticipates material and energy costs to increase more than the third quarter and price realization to result in a positive price cost mix in the fourth quarter. EBIT margins are expected to be 15%.

Composites: The company anticipates volumes to fall in mid-single digits from the prior year, while revenues are likely to grow on improvement in sales mix and continued price realization. Composites price is expected to rise in mid-single digits from the prior-year level. The business is likely to benefit from $30 million of curtailment reversals. Cost-curtailment benefits of $15-$20 million may help it offset input material and transportation inflation. EBIT margins are projected at 14%.

Roofing: The company expects both the market and volumes to be down in mid teens from the prior year due to an expectation for a more normal winter season, lower storm demand and ongoing supply chain disruptions. Pricing is likely to be favorable yet realization is expected to be below the third-quarter level. Roofing EBIT margin is likely to be 20% on lower volumes and narrowed but positive price cost mix.

2021 Outlook

For the rest of 2021, it expects the U.S. residential housing market, and global commercial and industrial markets to remain robust.

General corporate expenses are expected between $150 million and $155 million. Capital additions are estimated at $460 million, below the anticipated depreciation and amortization of $500 million. Interest expenses are estimated between $125 million and $130 million. The company estimates an effective tax rate of 26-28% and a cash tax rate of 18-20%, both on adjusted pre-tax earnings.

Zacks Rank & Peer Releases

Owens Corning currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Masco Corporation MAS reported better-than-expected results for third-quarter 2021. Earnings and net sales surpassed their respective Zacks Consensus Estimate. On a year-over-year basis, net sales improved on strong demand across the categories and channels but adjusted earnings declined owing to supply chain constraints and inflation.

Otis Worldwide Corporation OTIS reported solid results for third-quarter 2021. Its earnings and revenues surpassed the respective Zacks Consensus Estimate as well as improved on a year-over-year basis. Solid organic sales in both New Equipment and Service segments along with higher operating margins benefited the company.

Armstrong World Industries, Inc. AWI recently reported third-quarter 2021 results, wherein its earnings missed the Zacks Consensus Estimate but revenues beat the same. Nonetheless, both the metrics grew on a year-over-year basis.

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Service Corporation International Price, Consensus and EPS Surprise

 

Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote

Quarter in Detail

Service Corporation posted adjusted earnings of $1.16 per share, which easily surpassed the Zacks Consensus Estimate of 63 cents and increased 47% year over year. The year-over-year increase can be attributed to elevated gross profit associated with growth in funeral services performed, funeral sales average, cemetery atneed and recognized preneed revenues as well as higher recognized earnings from cemetery endowment care trust funds. The bottom line also gained from reduced shares outstanding as well as declines in corporate and general administrative expenses.

Total revenues of $1,034.4 million increased $116 million year over year from $918.2 million reported in the year-ago quarter. The upside can be attributed to increased funeral and cemetery revenues. The top line came ahead of the Zacks Consensus Estimate of $923.5 million.

Gross profit increased nearly $69 million to $333 million. Corporate general and administrative costs declined $4.5 million to $36.5 million due to a decline in workers’ compensation as well as lower general liability and auto liability insurance accruals in the reported period. The company saw favorable comparisons with elevated charitable contributions in the year-ago period. Operating income of $304.3 million increased from $223.2 million reported in the year-ago quarter.

Segment Discussion

Consolidated Funeral revenues rose to $592.3 million from $518.6 million reported in the year-ago quarter. Total comparable funeral revenues increased 13.6% year over year, mainly driven by solid growth in core funeral revenues, recognized preneed revenues and other revenues. Growth in core funeral revenues to the tune of 11.1% was driven by an increase in core average revenue per service as well as higher core funeral services performed. The comparable core cremation rate expanded 60 basis points (bps) to 52.8%. Non-funeral home revenues rose 16.7% owing to increased average revenue per service and services performed growth.

Comparable preneed funeral sales production increased 21.6% driven by continued growth in digital and direct mail leads along with the return of local marketing events and in-person seminars. The company witnessed a 21.1% increase at its core funeral locations and 23.6% growth in preneed production via the non-funeral home channel.

Comparable funeral gross profit increased $39.9 million to $163.8 million. The gross profit margin expanded 400 bps to 28.1%.

Consolidated Cemetery revenues came in at $442.1 million, up from $399.6 million reported in the year-ago quarter. Comparable cemetery revenues increased 10.6% year over year, mainly on growth in core revenues. The core revenue growth of $35.9 million was backed by a 19.5% increase in atneed revenues.
    
Comparable preneed cemetery sales production growth of 8.2% was fueled by impressive gains in sales averages and large sales activity. Comparable preneed cemetery sales production is benefiting from more productive and efficient sales force that utilizes the customer relationship management system efficiently. The sales averages gained on consistent investment in high-quality inventory at moderately higher price points.

Comparable cemetery gross profit came in at $168 million, up $28.2 million from the year-ago period’s levels. The gross profit margin increased from 35% to 38% in the reported quarter on higher revenues.

Other Financial Details

Service Corporation ended the quarter with cash and cash equivalents of $406.9 million, long-term debt of nearly $3,760 million and total equity of $1,941.9 million.

Net cash provided by operating activities amounted to $730.4 million during the nine months ended Sep 30, 2021. During the same timeframe, the company incurred capital expenditures of $74.6 million.

Management now expects adjusted net cash from operating activities to be $850-$925 million in 2021, up from $700-$775 million guided earlier. Expenditures associated with capital enhancements at current locations and cemetery development are still anticipated in the band of $235-$255 million.

Image Source: Zacks Investment Research

Outlook

Considering the company’s consistent outperformance, management is lifting its midpoint of 2021 adjusted earnings per share (EPS) guidance by 95 cents to $4.30. The company now envisions adjusted EPS in the range of $4.15-$4.45 compared with $3.20-$3.50 projected earlier. We note that the company’s earnings came in at $2.91 per share in 2020.

The company is also raising the midpoint guidance for adjusted operating cash flow by $150 million to $888 million. The company now envisions the metric in the range of $850-$925 million compared with $700-$775 projected earlier. The company’s guidance for the year takes into account the continued uncertainty associated with the pandemic.

For the fourth quarter of fiscal 2021, the company expects adjusted EPS in the range of 74 cents to $1.04. Adjusted operating cash flow is anticipated in the range of $128-$203 million in the quarter.

Top 3 Staple Picks

J & J Snack Foods Corp. JJSF, currently sporting a Zacks Rank of 1 (Strong Buy), has a trailing four-quarter earnings surprise of 200.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Natural Foods, Inc. UNFI, currently flaunting a Zacks Rank #1, has a trailing four-quarter earnings surprise of 13.1%, on average.

Helen of Troy Limited HELE, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 19.8%, on average.

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Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Operating revenues of $459.5 million beat the Zacks Consensus Estimate of $446.1 million and increased more than 100% on a year-over-year basis.

Allegiant Travel Company Price, Consensus and EPS Surprise

 

Allegiant Travel Company price-consensus-eps-surprise-chart | Allegiant Travel Company Quote

Quarter in Details

Passenger revenues, which accounted for a bulk (92.2%) of the top line, surged more than 100% on a year-over-year basis. The upside can be attributed to an improvement in air-travel demand.

Air traffic (measured in revenue passenger miles or RPMs) for scheduled service surged 92.6% in the quarter under review. Capacity (measured in available seat miles or ASMs) also increased 25% year over year. Consequently, load factor (percentage of seats filled by passengers) widened 2690 basis points to 76.6% in the reported quarter, as traffic surge outweighed capacity expansion.

Operating cost per available seat miles (CASM), excluding fuel, increased 20.2% year over year. Average fuel cost per gallon (scheduled) surged 66.7% to $2.20 in the quarter. Total scheduled service passenger revenue per available seat miles (TRASM) rose 85.7% to 10.4 cents. The carrier exited the quarter with a fleet size of 106. The same is expected to total 108 by the year-end.

Liquidity

As of Sep 30, 2021, Allegiant Travel’s total unrestricted cash and investments totaled $1,070.9 million compared with $685.3 million at the end of December 2020. Long-term debt and finance lease obligations (net of current maturities and related costs) came in at $1,434.6 million compared with $1,441.8 million reported at the end of 2020.

Q4 Expectations

For the fourth quarter, ASM (for scheduled service) is expected to increase 12-16% from fourth-quarter 2019 figures.

Total system ASM are expected to surge 10-14% from fourth-quarter 2019 figures.

Total operating revenues are expected to move up 0.5-4% from fourth-quarter 2019 actuals.

Fuel cost per gallon is expected to be at $2.55.

2021 Expectations

For 2021, the projection for aircraft, engines and induction costs is unchanged from the previous expectation of $115-$125 million.

The view for capitalized airbus deferred heavy maintenance is unchanged from the prior view of $50-$60 million.

Other airline capital expenditures are now expected between $60 million and $70 million (previous expectation: $40 million and $50 million).

Interest expenses are still expected in the range of $65-$70 million.

Project spending (Sunseeker Resorts Project) for 2021 is expected to be $50-$55 million.

Zacks Rank

Allegiant Travel currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sectorial Snapshot

Within the broader Transportation sector, Delta Air Lines DAL, J.B. Hunt Transport Services JBHT and Kansas City Southern KSU recently reported third-quarter 2021 results.

Delta reported third-quarter earnings (excluding $1.59 from non-recurring items) of 30 cents per share, outpacing the Zacks Consensus Estimate of 15 cents. Revenues of $9,154 million beat the Zacks Consensus Estimate of $8,370.6 million.

J.B. Hunt reported third-quarter earnings of $1.88 per share, surpassing the Zacks Consensus Estimate of $1.77. Total operating revenues of $3144.8 million outperformed the Zacks Consensus Estimate of $3002.1 million.  

Kansas City Southern reported third-quarter earnings (excluding 31 cents from non-recurring items) of $2.02 per share, missing the Zacks Consensus Estimate of $2.07. Quarterly revenues of $744 million surpassed the Zacks Consensus Estimate of $725.9 million.
 

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Let’s discuss how things have shaped up ahead of the announcement.

Factors at Play

A smooth flow of contracts in the past few quarters is expected to have boosted organic revenue growth for Leidos in the third quarter.  

On the other hand, positive synergies from acquisitions made in the past few quarters must have contributed to the company’s quarterly top-line performance.

In August, Leidos completed the transition for the Department of the Navy's enterprise information technology (IT) networks. These networks provide IT services to more than 650,000 uniformed and civilian professionals who use them daily at more than 1,500 locations across the United States and worldwide. This is likely to positively impact the company’s quarterly results.

The Zacks Consensus Estimate for quarterly revenues is pegged at $3.58 billion, which indicates a rise of 10.5% from the year-ago quarter.

In terms of margin, factors like strong program management, higher volumes on some fixed-price programs and better direct labor utilization are expected to have boosted Leidos’ margin during the third quarter. This, in turn, might have bolstered the company’s quarterly earnings performance.

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at $1.60, which suggests an improvement of 8.8% from the year-ago quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Leidos Holdings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Leidos Holdings carries a Zacks Rank #3 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are a couple of defense companies you may want to consider, as these have the right combination of elements to post an earnings beat this season:

Transdigm Group TDG has an Earnings ESP of +0.36% and a Zacks Rank #2.

Huntington Ingalls HII has an Earnings ESP of +3.59% and a Zacks Rank #2.

A Recent Defense Release

Raytheon Technologies Corporation’s RTX third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.

 

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Quarter in Detail

Adjusted earnings came in at $1.22 per share, which missed the Zacks Consensus Estimate of $1.26. The bottom line rose 2.5% year over year, owing to higher adjusted earnings from Altria’s equity investment in ABI, favorable net periodic benefit income, lower adjusted income tax rate and interest expenses as well as fewer shares outstanding. The upsides were partially countered by lower adjusted operating companies income (OCI).

Net revenues declined 4.7% year over year to $6,786 million due to lower net revenues in the smokeable segment. Revenues, after deducting excise taxes, were down 2.6% to $5,531 million. The Zacks Consensus Estimate for revenues was pegged at $5,768 million.

Segment Details

Smokeable Products: Net revenues in the category declined 5.4% year over year to $5,975 million due to lower shipment volumes, partially offset by higher pricing and lower promotional investments. Revenues, net of excise taxes, were down 3% year over year to $4,757 million.

Total smokeable products shipment volumes fell 12.9% to 24,475 million. Domestic cigarette shipment volumes were also down 12.9% year over year, mainly driven by the industry’s rate of decline and trade inventory changes. On adjusting for trade inventory movements, smokeable products’ domestic cigarette shipment volumes fell an estimated 7%. Altria’s reported cigar shipment volumes declined 9.8%. Total cigarette retail share inched down 0.4 percentage points to 48.9%, year on year.

Adjusted OCI in the segment dropped 2.2% to $2,761 million due to lower shipment volumes and a rise in resolution expenses, partly mitigated by higher pricing and lower promotional investments. Adjusted OCI margin increased 0.5 percentage points to 58%.

Oral Tobacco Products: Net revenues in the segment fell 2.2% from the year-ago quarter’s level to $626 million, due to lower shipment volumes and higher promotional investments — partly countered by greater pricing. Revenues, net of excise taxes, declined 2.1% to $594 million.

Domestic shipment volumes in the segment went down 3.8%, mainly due to retail share losses (from an increase in oral nicotine pouch sales) and trade inventory movements. The drawbacks were partially mitigated by industry growth, calendar differences and other factors. On an adjusted basis, oral tobacco products shipment volumes went down an estimated 2.5%. Total oral tobacco products’ retail share fell 2.2 percentage points to 47.8%.

Adjusted OCI declined 8% to $405 million owing to lower shipment volume, higher promotional investments in on! and higher costs, partially offset by higher pricing. Adjusted OCI margin contracted 4.3 percentage points to 68.2%.

Wine: Net revenues in the segment rose 12.7% year on year to $177 million due to increased pricing and improved mix. The segment’s revenues, net of excise taxes, increased 13.2% to $172 million. Reported wine shipment volumes went up 5.1% to about 5.4 million cases.

Adjusted OCI in the category went up 35% to $27 million, resulting from higher pricing as well as improved mix. Adjusted OCI margin expanded 2.5 percentage points to 15.7%.

Financial Updates

Altria ended the quarter with cash and cash equivalents of $2,957 million, long-term debt of $27,022 million and total stockholders’ deficit of $1,265 million.

Altria expects capital expenditures for 2021 in the range of $150-$200 million compared with the previous expectation of $200-$250 million.

The company’s board authorized the expansion of its existing $2-billion share repurchase program to $3.5 billion. Altria expects to complete the expanded program by December 31, 2022. During the third quarter, Altria bought back 6.7 million shares for $322 million. In the first nine months of 2021, the company repurchased 20.2 million shares for $972 million. Following the company’s share expansion move, it now has shares worth approximately $2.5 billion remaining under the share repurchase program

During the quarter, the company paid out dividends worth $1.6 billion. In August, the company raised its quarterly dividend. The company currently has an annualized dividend rate of $3.60 per share, representing a dividend yield of 7.5% as of October 25, 2021. The company maintains a long-term dividend payout ratio goal of about 80% of the adjusted earnings per share.

Image Source: Zacks Investment Research

Other Developments & Guidance

The company provided an update on the IQOS heated tobacco system patent proceedings. In September 2021, the International Trade Commission (ITC) imposed a ban on importing and issued cease-and-desist orders (CDO) on IQOS, Marlboro HeatSticks and infringing components. However, Altria disagrees with the ITC’s decision as it believes that IQOS does not infringe any of the plaintiff’s patents. The ITC’s decision is currently under a 60-day review by the Biden Administration. If the decision is not rejected post review, the CDO will take effect on Nov 29, 2021, making all IQOS and Marlboro HeatSticks products unavailable in the marketplace. Altria’s subsidiary, PM USA, is preparing to comply with the orders and is designing contingency plans. It has been in communication with Philip Morris International Inc. PM regarding their domestic manufacturing plans.

As of Sep 30, 2021, Helix expanded its U.S distribution of on!, to 110,000 stores. The company submitted pre-market tobacco product applications (PMTA) for the entire on! portfolio to the FDA, which currently remains pending. Helix is working on modified risk tobacco product applications for on!.

On Oct 1, 2021, Altria, through its subsidiary — UST LLC — completed the divestiture of Ste. Michelle Wine Estates (Ste. Michelle). The company received cash proceedings worth approximately $1.2 billion, which was used to partially fund the company’s expanded share repurchase program.

Altria noted that its tobacco business has not witnessed any material disruption related to the COVID-19 pandemic. The company continues to assess the macroeconomic impacts of the pandemic on adult tobacco consumers (ATCs), such as stay-at-home trends, disposable income and buying patterns.

For 2021, the company updated adjusted earnings view in the range of $4.58-$4.62 from $4.56-$4.62. The revised bottom-line view indicates growth of 5-6% from $4.36 recorded in 2020. Management stated that the company will continue assessing the external environmental factors like ATC dynamics, unemployment rates, purchasing pattern as well as the timing and breadth of the coronavirus vaccine, among others.

We note that shares of this Zacks Rank #3 (Hold) company have gained 1.9% in the past six months compared with the industry’s decline of 0.3%.

Consumer Staples Picks You Can’t Miss

J & J Snack Foods Corp. JJSF, flaunting a Zacks Rank #1 (Strong Buy), delivered an earnings surprise of 200.4% in the last four quarters, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

United Natural Foods, Inc. UNFI, also with a Zacks Rank #1, delivered an earnings surprise of 13.1% in the last four quarters, on average.

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Including one-time items, the company posted GAAP earnings of 82 cents per share compared with 50 cents reported in the year-ago quarter.

This year-over-year improvement can be attributed to higher revenues as well as segment profit generated this quarter.

Revenues

Total revenues came in at $2,990 million, which missed the Zacks Consensus Estimate of $3,104 million by 3.7%. The reported figure, however, increased a solid 9.3% from the year-ago quarter’s $2,735 million, driven by higher contribution from the Textron Aviation segment.

Manufacturing revenues increased 9.4% to $2,979 million. Revenues at the Finance division declined 15.4% to $11 million.

Segmental Performance

Textron Aviation: In the quarter under review, revenues at this segment improved 48.6% to $1,181 million from $795 million in the year-ago quarter. The upside was driven by higher Citation jet volume, aftermarket volume and commercial turboprop volume.

The company delivered 49 jets, up from 25 in the year-ago quarter. It also delivered 35 commercial turboprops, up from 21 in third-quarter 2020.

The segment generated a profit of $98 million in the quarter against a loss of $29 million incurred in the year-ago quarter. The upside was driven by higher volume and mix, a positive performance impact of $96 million, and favorable pricing, net of inflation.

The order backlog at the end of the quarter was $3.5 billion, down $0.8 billion sequentially.

Bell: Revenues from this segment were $769 million, down 3% from the year-ago quarter’s $793 million, owing to lower military revenues.

The segment delivered 33 commercial helicopters in the quarter, down from 41 in last year’s quarter.

Segment profits were down 11.8% to $105 million on account of lower military revenues. Bell’s order backlog at the end of the quarter was $4.1 billion, down $0.7 billion sequentially.

Textron Systems: Revenues at this segment came in at $299 million, which slipped 1% year over year due to the lower volume observed in the Air Systems product line.

Segmental profits increased 12.5% year over year to $45 million in the third quarter, driven by favorable performance.

Textron Systems’ backlog at the end of the third quarter was $2.2 billion, down $0.1 billion sequentially.

Industrial: Revenues at this segment declined 12.3% to $730 million, primarily due to lower volume and mix of $156 million, largely in the Fuel Systems and Functional Components product line, reflecting order disruptions related to the global auto OEM supply chain shortages.

Segment profit was $23 million, down 60.3% from the previous-year quarter owing to lower volume and mix.

Finance: Revenues at this segment decreased to $11 million from $13 million in the year-ago quarter. The profit of this segment was $8 million compared with $1 million in the third quarter of 2020.

Financials

As of Oct 2, 2021, cash and cash equivalents totaled $1,969 million compared with $2,146 million as of Jan 2, 2021.

Cash flow from operating activities amounted to $1,012 million at the end of the third quarter compared with $220 million at the end of the prior-year period.

Capital expenditures were $76 million in third-quarter 2021 compared with $55 million in third-quarter 2020.

Long-term debt was $3,80 million as of Oct 2, 2021, compared with $3,198 million as of Jan 2, 2021.

Guidance

Textron currently expects to generate adjusted earnings per share from continuing operations in the range of $3.20 to $3.30, indicating an increase from the prior guidance range of $3.00-$3.20.  

The Zacks Consensus Estimate for 2021 of $3.28 lies above the mid-point of the company’s newly guided range.

Zacks Rank

Textron currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Hexcel Corporation HXL reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.

Raytheon Technologies Corporation’s RTX third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.

Lockheed Martin Corporation LMT reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.
 

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Earnings and Revenue Discussion

During third-quarter 2021, the company’s adjusted earnings of $1.22 beat the Zacks Consensus Estimate of $1.06. In the prior-year quarter, the company had reported adjusted earnings of $1.01.

Yum Brands, Inc. Price, Consensus and EPS Surprise

 

Yum Brands, Inc. price-consensus-eps-surprise-chart | Yum Brands, Inc. Quote

Quarterly revenues of $1,606 million surpassed the consensus estimate of $1,584 million. The top line increased 11% year over year. The upside can be attributed to an increase in company sales as well as a rise in franchise and property revenues.

Worldwide system sales — excluding foreign currency translation — increased 8% year over year with Taco Bell, KFC and Pizza Hut increasing 8%, 11% and 4%, respectively, year over year.

Divisional Performance

YUM! Brands primarily announces results under four divisions — KFC, Pizza Hut, Taco Bell and Habit Burger Grill.

For third-quarter 2021, revenues from KFC totaled $692 million, up 18% year over year. Comps in the division increased 6% year over year against the year-ago quarter’s decline of 4%.

The segment’s operating margin declined 180 basis points (bps) year over year to 45.4%. The downside was primarily caused by the lapping of bad debt recoveries, partially offset by system sales growth. In the quarter under review, KFC Division opened 636 gross new restaurants.

At Pizza Hut, revenues amounted to $247 million, up 2% on a year-over-year basis. Comps increased 4% in the reported quarter versus a 3% fall in the prior-year quarter.

The segment’s operating margin expanded 390 bps year over year to 40.6%. The upside was driven by solid same-store sales. Pizza Hut Division opened 297 gross new restaurants during the third quarter.

Taco Bell’s revenues were $534 million, up 6% from the year-ago quarter’s levels. Comps in the segment increased 5% year over year compared with 3% growth reported in the year-ago quarter. Its operating margin declined 260 bps year over year to 34.6%. The downside was due to higher general and administrative expenses, partially offset by comps growth.

Taco Bell opened 74 gross new restaurants during the quarter under review.

The Habit company sales amounted to $132 million during the third quarter. Comps in the division increased 11% year over year. In the quarter, the company opened eight gross new restaurants in the United States.

Other Financial Details

As of Sep 30, 2021, cash and cash equivalents totaled $1,001 million compared with $730 million on Dec 31, 2020. Long-term debt at the end of the reported quarter was $11,189 million compared with $10,272 million at 2020-end.

Zacks Rank & Key Picks

Yum! Brands carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Retail - Restaurants industry space are Noodles & Company NDLS, Dave & Buster's Entertainment, Inc. PLAY and Papa John's International, Inc. PZZA, each carrying a Zacks Rank #2 (Buy).

Noodles & Company’s 2021 earnings are expected to surge 182.8%.

Dave & Buster's has a trailing four-quarter earnings surprise of 201.8%, on average.

Papa John's has three-five-year earnings per share growth rate of 15%.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Adjusted earnings (excluding 45 cents from non-recurring items) of 89 cents per share beat the Zacks Consensus Estimate by 4.7% and increased 23.6% year over year. Revenues of $1.6 billion topped the consensus mark by 1.8% and rose 14.9% year over year.

Acquisitions contributed $51.4 million to revenues in the reported quarter.

So far this year, shares of Waste Connections have gained 27.7% against a 2.6% decline of the industry it belongs to.

Image Source: Zacks Investment Research

Revenues by Segment

The Solid Waste Collection segment’s revenues increased 12.7% year over year to $1.13 billion.

The Solid Waste Disposal and Transfer segment’s revenues increased 7.9% from the year-ago quarter’s level to $336.1 million.

The Solid Waste Recycling segment’s revenues surged more than 100% year over year to $54.4 million.

The Intermodal and Other segment’s revenues increased 38.7% to $37.6 million.

The E&P Waste Treatment, Recovery and Disposal segment’s revenues soared 48.3% from the year-ago quarter’s level to $35 million.

Waste Connections, Inc. Price, Consensus and EPS Surprise

 

Waste Connections, Inc. price-consensus-eps-surprise-chart | Waste Connections, Inc. Quote

Operating Results

Adjusted EBITDA in the reported quarter was $505.6 million, up 16.9% from the year-ago quarter’s levels. Adjusted EBITDA margin came in at 31.7% compared with 31.1% in the year-ago quarter.

Operating income totaled $285.1 million compared with $230.7 million in the prior-year quarter.

Balance Sheet and Cash Flow

Waste Connections exited third-quarter 2021 with cash and cash equivalents of $339.5 million compared with $727.39 million at the end of the prior quarter. Long-term debt was $4.87 billion compared with $4.76 billion at the end of the last reported quarter.

The company generated $421.5 million of cash from operating activities in the reported quarter. Adjusted free cash flow was $240 million. Capital expenditures totaled $208.1 million.

The company paid out dividends worth $53.3 million in the reported quarter. Currently, Waste Connections carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Dividend Hike

Waste Connections’ board of directors approved a 12.2% increase in the quarterly cash dividend to 23 cents per share. The dividend will be paid out on Nov 23, 2021, to shareholders on record as of Nov 9, 2021.

Raised 2021 Guidance

The estimates below are updated from August 2021.

Revenues are estimated at approximately $6.11 billion (previous outlook: $5.975 billion), higher than the Zacks Consensus Estimate of $6.05 billion.

Adjusted EBITDA is expected to be at $1.91 billion (previous outlook: $1.875 billion).

Capital expenditures are estimated at approximately $700 million (previous outlook: $675 million).

Net cash from operating activities is estimated at $1.689 billion (previous outlook: $1.666 billion).

Adjusted free cash flow is estimated at approximately $1.025 billion (previous outlook: $1 billion).

Performance of Other Business Services Companies

Equifax’s EFX third-quarter 2021 adjusted earnings of $1.85 per share beat the Zacks Consensus Estimate by 7.6%. The bottom line declined on a year-over-year basis. Revenues of $1.22 billion outpaced the consensus estimate by 3.6%. The top line increased 14.5% year over year on a reported basis and 14% on a local-currency basis.

IQVIA’s IQV third-quarter 2021 adjusted earnings per share of $2.17 beat the consensus mark by 1.9% and rose 33.1% on a year-over-year basis. Total revenues of $3.39 billion outpaced the consensus estimate by 1%. The top line increased 21.7% year over year on a reported basis and 21.1% on a constant-currency basis.

Omnicom’s OMC third-quarter 2021 adjusted earnings of $1.65 per share beat the consensus mark by 20.4% and increased 36.4% year over year. Total revenues of $3.4 billion surpassed the consensus estimate by 0.6% and increased 7.1% year over year.
 

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Revenue Details

In the quarter under review, the company’s net sales were $4,263.2 million, reflecting a 10.7% increase from the year-ago quarter. The results benefitted 8% from a volume increase and 2% from favorable pricing. Foreign-currency translation too had a positive impact of 1%.

The company’s top line surpassed the Zacks Consensus Estimate of $4,260 million.

Stanley Black reports revenues under three segments. A brief discussion on the quarterly results is provided below:

Tools & Storage’s revenues totaled $3,185.9 million, representing 74.7% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 13.6%, driven by an 11% gain from volume, 2% growth from favorable pricing and a 1% favorable impact from foreign currency translation.

The Industrial segment generated revenues of $593.5 million, accounting for 13.9% of the net revenues in the reported quarter. Revenues grew 1.2% year over year as pricing gains of 2% and favorable currency impact of 1% were partially offset by a 1% decline in volumes.

The Security segment’s revenues, representing 11.4% of net revenues, increased 5.3% year over year to $483.8 million. The results benefitted a 7% from volume increase, a 1% gain from acquisitions and a 1% impact from favorable pricing.

Margin Profile

In the reported quarter, Stanley Black’s cost of sales (normalized) increased 16.2% year over year to $2,866.7 million. It represented 67.2% of the quarter’s net sales versus 64.1% in the year-ago quarter. The gross profit (normalized) increased 1% year over year to $1,396.5 million. The gross margin decreased 310 basis points (bps) to 32.8%.

Selling, general and administrative expenses increased 24.5% year over year to $875 million. It represented 20.5% of net sales in the reported quarter versus 18.3% in the year-ago quarter. Operating profits (normalized) decreased 23.4% year over year to $521.5 million, whereas the margin declined 550 bps to 12.2% due to the adverse impacts of supply-chain woes.

The adjusted tax rate in the reported quarter was 2% compared with the year-ago quarter figure of 17.8%.

Balance Sheet & Cash Flow

Exiting the third quarter of 2021, Stanley Black had cash and cash equivalents of $292.7 million, decreasing 33.5% from $440.4 million recorded in the last reported quarter. Long-term debt (net of current portions) of $4,246.9 million was flat on a sequential basis.

In the quarter under review, the company generated net cash of $4.6 million from its operating activities compared with $677.2 million generated in the year-ago quarter. Capital spending totaled $129.1 million versus $62.1 million in the third quarter of 2020.

In the reported quarter, Stanley Black paid out cash dividends of $126 million, up 15% from the previous year’s quarter. It invested $2.8 million for purchasing a common stock for treasury, representing an increase from $1.9 million in the year-ago quarter.

Outlook

The company has lowered its financial projections for 2021. It now anticipates adjusted earnings per share of $10.90-$11.10 compared with $11.35-$11.65 per share mentioned earlier. The impacts of labor, commodity and transit inflation are expected to be an adverse $690 million. The impacts of favorable currency movements are predicted to be $15 million.

Organic sales growth for the company is expected to be 16-17%, down from 16-18% mentioned previously.

Free cash flow is expected to be $1.1-$1.3 billion.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Performance in Detail

Management noted that sales of SSD controllers were flat sequentially.

Revenues from SSD solutions increased 0-5% quarter over quarter. Revenues from eMMC and UFS controllers rose 60-65% sequentially.

In third-quarter 2021, sales of SSD controllers surged 70-75% year over year. Sales of eMMC and UFS controllers increased 305-310% on a year-over-year basis. In the quarter under review, SSD solutions’ sales declined 0-5% year over year.

Silicon Motion Technology Corporation Price, Consensus and EPS Surprise

 

Silicon Motion Technology Corporation price-consensus-eps-surprise-chart | Silicon Motion Technology Corporation Quote

Margins

Non-GAAP gross margin of 50.2% expanded 110 basis points (bps) on a year-over-year basis but contracted 80 bps sequentially.

Non-GAAP operating expenses, as a percentage of revenues, came in at 20.8%, contracting 530 bps year over year and 110 bps sequentially.

Non-GAAP operating margin expanded 640 bps on a year-over-year basis and 20 bps sequentially to 29.4%.

Balance Sheet & Cash Flow

As of Sep 30, 2021, Silicon Motion had cash, cash equivalents, restricted cash and short-term investments of $419.5 million compared with $412.3 million as of Jun 30, 2021.

The company generated $28.7 million cash from operations during the reported quarter compared with $60 million in the previous quarter.

On Oct 26, 2020, the company’s board of directors approved $1.40 per ADS of annual dividend, slated to be paid out in quarterly installments of 35 cents per ADS. On Aug 19, 2021, the company paid out $12.2 million as dividend to shareholders, which marked its fourth installment.

On Oct 25, 2021, Silicon Motion’s board approved a 43% hike in annual dividend to $2.00 per ADS, which is to be paid out in quarterly installments of 50 cents per ADS. The first installment will be paid on Nov 24, 2021. 

A Look at Guidance

For fourth-quarter 2021, Silicon Motion expects non-GAAP revenues in the range of $254-$267 million. The Zacks Consensus Estimate is currently pegged at $242.5 million.

Revenues are likely to reflect benefits from strength in design wins with big OEM clients as well as favorable product mix amid tight foundry wafer supply, noted the company. Continued momentum in PC sales triggered by online learning and the work-from-home wave hold promise. Strong PC shipments are expected to benefit the company’s PCIe NVMe SSD controllers.

Non-GAAP gross margin is anticipated in the range of 48.5-50.5%. Non-GAAP operating margin is projected in the range of 28.5-30.5%.

Zacks Rank & Other Stocks to Consider

Currently, Silicon Motion carries a Zacks Rank #2 (Buy).

Some better-ranked stocks in the broader technology sector worth considering are Salesforce CRM, HP Inc HPQ and Jabil JBL. All stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Salesforce, HP Inc and Jabil is currently pegged at 16.8%, 12.7% and 12%, respectively.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Revenues & Expenses Increase Significantly

Total revenues jumped significantly year over year from $207.6 million to $490.8 million. The top line outpaced the Zacks Consensus Estimate of $405.7 million.

Total operating expenses (adjusted basis) were $337 million, up significantly year over year. The rise was due to an increase in both compensation and benefits costs, and non-compensation costs.

Other income was $30.4 million against other expenses of $1.6 million recorded in the prior-year quarter.

As of Sep 30, 2021, the company had cash and liquid investments of $558.4 million, with no debt or goodwill.

Capital Deployment Update

In the nine months ended Sep 30, 2021, the company repurchased 1.8 million shares for $100 million.

Additionally, Moelis & Company announced a dividend of $3.10 per share, comprising a special dividend of $2.50 per share. The total dividend will be paid out on Nov 19 to shareholders of record as of Nov 8.

Our View

Moelis & Company’s global expansion initiatives along with diverse operations across sectors and industries bode well for the future. The company's enhanced capital deployments reflect a strong balance sheet.

Currently, Moelis & Company carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Charles Schwab’s SCHW third-quarter 2021 adjusted earnings of 84 cents per share surpassed the Zacks Consensus Estimate of 80 cents. The bottom line jumped 65% from the prior-year quarter.

Interactive Brokers Group’s IBKR third-quarter 2021 adjusted earnings per share of 78 cents surpassed the Zacks Consensus Estimate of 75 cents. The bottom line reflects growth of 47.2% from the prior-year quarter.

Morgan Stanley’s MS third-quarter 2021 adjusted earnings of $2.04 per share easily outpaced the Zacks Consensus Estimate of $1.70. The bottom line reflects a rise of 22.9% from the year-ago quarter’s level.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Revenues Decline, Expenses Rise

Net revenues were $283.2 million, down 3.4% from the prior-year quarter. The top line surpassed the Zacks Consensus Estimate of $280.4 million.

NII was $248.6 million, down 3.7% year over year. Net interest margin, on a tax-equivalent basis, contracted 47 basis points (bps) to 3.10%.

Non-interest income totaled $34.6 million, down marginally from the prior-year quarter. The decline was due to a fall in trust income, mortgage income, bank-owned life insurance income and other non-interest income.

Non-interest expenses increased 1.6% from the prior-year quarter to $119.8 million. A rise in salaries and benefits costs, and credit and debit card, data processing and software amortization expenses primarily led to the increase. Also, in the reported quarter, the company recorded a net loss on the sale or write-down of other real estates against a gain in the prior-year quarter.

As of Sep 30, 2021, total loans were $18.96 billion, down 1.5% from the end of the previous quarter. Deposits totaled $29.45 billion, up from $29.11 billion as of Jun 30, 2021.

Credit Quality: A Mixed Bag

In the reported quarter, the company did not record any provision for credit losses against provisions of $10 million in the year-ago quarter. As of Sep 30, 2021, total non-performing assets were $36.5 million, plunging 47.4% from the prior-year quarter end.

The ratio of allowance for credit losses to total loans was 1.51%, down 5 bps year over year. However, net charge-offs were $15.7 million, up from $10.6 million recorded in the year-ago period.

Capital Ratios Improve

As of Sep 30, 2021, the Tier-1 risk-based capital ratio was 14.84%, up from 13.17% as of Sep 30, 2020. The total risk-based capital ratio was 15.20% compared with the prior year’s 14.28%.

Profitability Ratios Deteriorate

At the end of the third quarter, the annualized return on average assets was 1.42%, down from 1.58% witnessed at the end of the prior-year quarter. Annualized return on common equity was 8.07%, down from the year-earlier period’s 8.64%.

Our Take

The company’s solid balance sheet position is expected to keep supporting its financials in the quarters ahead. Nonetheless, margin pressure due to low rates remains concerning.

Prosperity Bancshares currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Zions Bancorporation’s ZION third-quarter 2021 net earnings per share of $1.45 surpassed the Zacks Consensus Estimate of $1.38. The bottom line represents an increase of 43.6% from the year-ago quarter’s number.

Hancock Whitney Corporation’s HWC third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter.

First Horizon National Corporation’s FHN third-quarter 2021 earnings per share of 50 cents beat the Zacks Consensus Estimate of 41 cents. Results excluded an after-tax impact of 9 cents per share from notable items related to the IBERIABANK Corporation Merger and early retirement of certain trust preferred securities.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Top-Line Details

The company’s third-quarter net sales increased 20.3% year over year to $914.6 million. The increase was driven by higher sales in North America and China, supported by its pricing actions. The top line surpassed the Zacks Consensus Estimate of $838 million.

A.O. Smith’s quarterly sales in North America (comprising the U.S. and Canada water heaters and boilers) moved up 21% year over year to $658.2 million. The segment’s results were driven by higher sales of water heaters, boilers, and water treatment products, supported by its pricing actions.

Segmental operating earnings were up 14% to $151.8 million on a year-over-year basis. The increase was on account of higher sales volume and inflation-related price increases, partially offset by a rise in material and logistics costs.

Quarterly sales in the Rest of the World (including China, India, and Europe) grew 19% year over year to $263.1 million. The increase was primarily backed by higher consumer demand for all major product categories in China.

The segment’s operating earnings were $26.8 million, reflecting an increase of 60% year over year. Higher sales volume, partially offset by higher operating costs, boosted the segment’s income.

Margin Details

In the quarter, A.O. Smith’s cost of sales was $574.3 million, up 24.1% on a year-over-year basis. Selling, general & administrative expenses were $177.6 million, up 11.4%.

Gross profit increased 14.5% year over year to $340.3 million with a margin of 37.2%, down 190 basis points. Interest expenses declined 37.5% to $1 million.

Liquidity & Cash Flow

On Sep 30, 2021, A.O. Smith’s cash and cash equivalents totaled $486.1 million compared with $444.8 million in the previous quarter.

At the end of the reported quarter, long-term debt was $99.6 million, stable on a sequential basis.

In the first nine months of 2021, cash provided by the operating activities totaled $376.8 million compared with $330.4 million in the year-ago period.

Share Repurchases

In the first nine months of 2021, the company repurchased shares worth $212 million compared with $56.7 million in the year-ago period. It paid dividends worth $125.4 million compared with $116.5 million a year ago.

Guidance

The company raised revenue and earnings guidance for 2021. For the year, it anticipates revenues to increase 20-21% from the previous year, higher than growth of 17-18% guided earlier.

It currently expects adjusted earnings of $2.86-$2.90 compared with $2.70-$2.76 guided previously.

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the Zacks Industrial Products sector are Nordson Corporation NDSN, AZZ Inc. AZZ, and Franklin Electric Co., Inc. FELE. While Nordson currently sports a Zacks Rank #1 (Strong Buy), AZZ and Franklin Electric carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nordson delivered an earnings surprise of 17.77%, on average, in the trailing four quarters.

AZZ delivered an earnings surprise of 25.47%, on average, in the trailing four quarters.

Franklin Electric delivered an earnings surprise of 16.27%, on average, in the trailing four quarters.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Image Source: Zacks Investment Research

Q3 Highlights

The company reported normalized earnings per share of 50 cents, down from 79 cents in the year-ago quarter. The bottom line also missed the Zacks Consensus Estimate of 64 cents.

Underlying earnings per share (normalized EPS, excluding mark-to-market gains and losses related to the hedging of share-based payment programs and the impacts of hyperinflation) were 85 cents in third-quarter 2021, up 6.3% from 80 cents earned in the year-ago quarter.

Revenues of $14,274 million improved 11.4% from the year-ago quarter and beat the Zacks Consensus Estimate of $13,423 million. It registered an organic revenue growth of 7.9%, primarily driven by robust volume and revenue per hectoliter (hl) growth. The company notes that revenues in the third quarter were more than the pre-pandemic levels, improving in the low-teens range from the third quarter of 2019.

Revenues per hl were up 4.3% on an organic basis, backed by revenue management and premiumization efforts. The total organic volume grew 3.4%, with a 2.8% increase in the own-beer volume and 7.8% growth in the non-beer volume.

AnheuserBusch InBev SANV Price, Consensus and EPS Surprise

 

AnheuserBusch InBev SANV price-consensus-eps-surprise-chart | AnheuserBusch InBev SANV Quote

The company’s premium portfolio reported revenue growth of 11.3% in the third quarter, leading the portfolio with 30% of revenue contribution. This included a strong performance of its three global brands — Budweiser, Corona and Stella Artois — which advanced 5% globally and 9.3% outside their respective home markets in the third quarter. The company remains focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Within the Beyond Beer portfolio, it reported triple-digit revenue growth for the canned cocktail brand, Cutwater and Brutal Fruit in South Africa.

The cost of sales increased 14.9% to $6,039 million and was up 11.6% on an organic basis.

The company’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) were $5,214 million, which rose 6.6% year over year and 3% on an organic basis. However, the normalized EBITDA margin declined 170 basis points (bps) to 36.5% and dipped 174 bps organically. EBITDA margins were impacted by negative currency translations and commodity headwinds as well as higher supply-chain costs in some markets. This more than offset the rise in revenues.

SG&A expenses increased 11.1% year over year to $4,379 million and 7.3% on an organic basis. Higher SG&A expenses can be attributed to a volume-driven rise in distribution costs and increased variable compensation accruals.

2021 Outlook

For 2021, AB InBev now expects EBITDA growth of 10-12% compared with 8-12% mentioned earlier. It continues to anticipate revenue growth higher than EBITDA growth, driven by strong volume and pricing.

Management anticipates a normalized effective tax rate of 28-30% for 2021, marking an increase from that reported in 2020. The year-over-year increase relates to the phasing out of the temporary COVID-19 measures and changes in tax attributes in some key markets. Net capital expenditure is projected to be $4.5-$5 billion for 2021, driven by higher investments in innovation and other consumer-centric initiatives to fuel the ongoing momentum.

3 Better-Ranked Beverage Stocks

The Duckhorn Portfolio, Inc. NAPA presently carries a Zacks Rank #2 (Buy). The company has a long-term earnings growth rate of 9.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Helen of Troy Limited HELE has an expected long-term earnings growth rate of 8%. It currently has a Zacks Rank #2.

Archer Daniels Midland Company ADM currently carries a Zacks Rank #2. It has a long-term earnings growth rate of 9%.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Intercontinental Exchange Inc. Price, Consensus and EPS Surprise

Performance in Detail  

Intercontinental Exchange’s revenues of $1.8 billion increased 28% year over year on higher revenues at Exchanges, Fixed Income, and Data Services and Mortgage Technology. The top line beat the Zacks Consensus Estimate by 2.7%.

Net revenues from Exchanges were $959 million, up 17% year over year. Fixed Income and Data Services revenues were $458 million, which increased 6% year over year. Mortgage Technology revenues more than doubled year over year to $366 million.

Adjusted operating expenses were $755 million for the third quarter, up 23.6% from the year-ago figure.

Adjusted operating income improved 30.9% year over year to $1 billion. Adjusted operating margin expanded 100 basis points (bps) from the year-ago quarter to 58%.

Exchanges' adjusted operating income of $650 million was up 20.6% year over year. Adjusted operating margin expanded 200 bps to 66%.

Fixed Income and Data Services' adjusted operating income increased 8.2% to $184 million. Adjusted operating margin expanded 100 bps to 39%.

Mortgage Technology’s adjusted operating income of $213 million more than doubled year over year. Adjusted operating margin contracted 600 bps to 58%.

Financial Update

As of Sep 30, 2021, Intercontinental Exchange had cash and cash equivalents of $1.65 billion, up nearly 5.1% from the level as of Dec 31, 2020. Long-term debt of $12.4 billion was down 12.3% from the 2020-end level.

Total equity was $21.6 billion as of Sep 30, 2020, up 10.5% from 2020 end.

Operating cash flow was $2.1 billion in the first nine months of 2021, up 17.4% year over year. Free cash flow was about $2 billion, up 22.2% year over year.

Fourth-Quarter 2021 Guidance

Total recurring revenues are estimated between $892 million and $907 million.

Operating expenses are projected in the range of $922-$932 million. Adjusted operating expenses are expected to be in the range of $737 million to $747 million and include $50 million related to Bakkt.

Non-operating income is expected to be in the range of $1.185 billion to $1.190 billion, including an expected gain on the Bakkt merger of approximately $1.3 billion.

Adjusted non-operating expense is expected to be in the range of $100 million to $105 million.

Weighted average shares outstanding are anticipated between 563 million and 569 million shares.

Zacks Rank

Intercontinental Exchange currently carries a Zacks Rank #2 (Buy).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Securities and Exchanges

Third-quarter earnings of Nasdaq NDAQ, MarketAxess Holdings MKTX and CME Group CME beat the respective Zacks Consensus Estimate.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Revenue Details

The company generated revenues of $441 million in the reported quarter, surpassing the Zacks Consensus Estimate of $425 million. On a year-over-year basis, quarterly revenues increased 6.7%, driven by a healthy product demand.

The sales derived from premium and mid-tier robots increased 14% year over year. It accounted for 87% of the company’s total robot revenues.

Sales generated from the e-commerce platform (representing 60% of the reported quarter’s revenues) increased 8% year over year. Notably, the e-commerce platform includes online sources of retailers, the company’s app and website, and e-commerce websites. Direct sales to consumers expanded 13% year over year to $40 million and represented 9.1% of the quarter’s revenues.

Total product units of 1,543 thousand shipped in the quarter reflected a year-over-year increase of 0.3%, while average selling prices grew 3.2%. For vacuum products, revenues of $398 million reflected growth of 7.9% from the year-ago quarter. Units shipped were 1,379 thousand, up 1.8% from the year-ago quarter. Revenues from mopping products decreased 2.3% to $43 million. Units shipped were 164 thousand, down from 184 thousand recorded in the third quarter of 2020.

On a geographical basis, the company sourced 49.1% of its revenues from domestic operations, and the rest came from the international arena. Domestic revenues totaled $216.5 million, reflecting a 5% increase from the year-ago quarter. International revenues grew 8.3% to $224.1 million. International operations gained from a 2% revenue increase in Japan and a 15% rise in EMEA sales.

Margin Profile

In the quarter under review, iRobot’s non-GAAP costs of revenues increased 29.7% year over year to $227.9 million, representing 63.1% of revenues compared with 51.9% in the year-ago quarter. The non-GAAP gross profit was $163 million, down 18.3% year over year, while the adjusted gross margin decreased 1130 basis points to 37%.

Research and development expenses were $48.3 million, up 25% year over year. This accounted for 11% of revenues compared with 9.4% in the year-ago quarter. Selling and marketing expenses increased 17% year over year to $59.1 million. As a percentage of revenues, it reflected 13.4% in the reported quarter compared with 12.2% in the prior-year quarter. General and administrative expenses were $22.7 million, down 20.4% year over year. The figure mirrored 5.2% of the total revenue base compared with 6.9% in the year-earlier quarter.

In the quarter under review, the company recorded adjusted operating earnings of $48 million, down 48.5% from the year-ago quarter. The adjusted operating margin was 10.9% versus 22.5% in the year-ago quarter.

Tariff costs related to Section 301 totaled $14.1 million in the reported quarter. Its impact on the gross and operating margins was (3.2%).

Balance Sheet and Cash Flow

Exiting third-quarter 2021, iRobot had cash and cash equivalents of $218 million, decreasing 47.6% from $415.8 million recorded at the end of second-quarter 2021. Total long-term liabilities were $67.7 million, down 3.1% sequentially.

In the first nine months of 2021, the company used net cash of $90.8 million for its operating activities against a net cash flow of $96.8 million in the year-ago period. Capital used for purchasing property and equipment totaled $25.3 million, increasing 1.1% year over year.

In the first three quarters of 2021, the company repurchased shares worth $150 million.

Outlook

For the rest of 2021, supply-chain issues, logistics woes, shipping delays and protracted shipping timeframes are expected to impact the performance. Transportation costs are expected to increase sharply.

It revised revenue projection to $1.555-$1.590 billion from the previously stated $1.55-$1.62 billion.

The non-GAAP gross profit is expected to be $558-$578 million, lower than $612-$645 million stated previously. The non-GAAP operating income is expected to be $36-$55 million, down from $80-$110 million mentioned previously. The impact of tariff-related costs of Section 301 is expected to be an adverse $42-$43 million on both gross profit and operating income results. The tax rate is expected to be 5-7%.

The company lowered its non-GAAP earnings projection to $1.15-$1.74 per share from the previously mentioned $2.25-$3.15.

iRobot Corporation Price, Consensus and EPS Surprise

 

iRobot Corporation price-consensus-eps-surprise-chart | iRobot Corporation Quote

Zacks Rank & Stocks to Consider

The company currently has a market capitalization of $2.2 billion and a Zacks Rank #3 (Hold).

Some better-ranked players in the Zacks Industrial Products sector are Nordson Corporation NDSN, HeritageCrystal Clean, Inc. HCCI, and Casella Waste Systems, Inc. CWST. While Nordson and HeritageCrystal currently sport a Zacks Rank #1 (Strong Buy), Casella Waste carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for the companies improved for the current year. Further, earnings surprise for the last reported quarter was 14.15% for Nordson, 33.90% for HeritageCrystal, and 4.17% for Casella Waste.

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The company’s results gained on the back of substantial revenue growth and uptick in visits, partly offset by escalating costs.

Operational Update

The company’s operating revenues of $522 million (higher than management’s expected range of $510-$520 million) surpassed the Zacks Consensus Estimate by 1%. The top line improved 81% year over year in the third quarter, courtesy of a solid contribution of its revenue components namely access fees and visit fees.

Revenues from access fees (which comprised 86.6% of total revenues) doubled year over year to $451.6 million. Within this, access fees from the United States more than doubled year over year to $413.6 million and accounted for 91.6% of total access fees. International access fees made up the remaining 8.4% and amounted to $38 million (up 19% year over year).

Meanwhile, the company generated $60 million of visit fee revenues (up 18% year over year) in the quarter under review. While visit fee revenues from the United States advanced 18% year over year to $59.9 million, International visits revenues totaled $0.1 million (up 22% year over year).

Adjusted EBITDA surged 70.6% year over year to $67.4 million and remained higher than management’s projected range of $60-$65 million.

Adjusted gross margin expanded 390 basis points year over year to 67.6% in the third quarter.

Total visits of 3.9 million (higher than the expectation of 3.4-3.6 million) improved 37% year over year on account of 40% and 19% increase in visits from the United States and International segments, respectively.

Teladoc ended the quarter with U.S. paid membership of 52.5 million, which inched up 2% year over year. U.S. visit fee only access membership rose 8% year over year to 23.6 million in the quarter under review.

Total expenses escalated 88.7% year over year to $582.2 million due to higher expenses related to cost of revenues, advertising and marketing, sales, technology and development, and general and administrative.

Strong Financial Update (as of Sep 30, 2021)

The company exited the third quarter with cash and cash equivalents of $823.8 million, which increased 12.3% from the 2020-end level.

Total debt was $1.2 billion, which tumbled 12.2% from the figure as of Dec 31, 2020.

During the first nine months of 2021, net cash provided by operating activities amounted to $110.8 million, which soared 80.4% from the prior-year comparable period.

Fourth-Quarter Guidance

For the fourth quarter of 2021, the company expects total revenues of $536-$546 million and adjusted EBITDA of $69-$74 million. It projects total visits between 3.9 million and 4.1 million. Net loss per share is expected to be within 53-73 cents per share.

2021 Outlook Revised

The company has revised its full-year guidance with respect to certain metrics.

For 2021, revenues are anticipated between $2.015 billion and $2.025 billion compared with the previous guidance of $2-$2.025 billion.

Adjusted EBITDA is estimated to be $260-$265 million compared with the prior outlook of $255-$275 million.

The company projects total visits in the band of 14.5 million to 14.7 million (up from the 13.5-14 million range anticipated earlier).

Total U.S. paid membership is expected between 52.5 million and 53.5 million members (compared with the prior guidance of 52-54 million). Visit fee only access is projected to be available to somewhere around 23-24 million individuals (up from the earlier projection of roughly 22 million individuals).

Net loss per share is expected to be $3.20-$3.40 per share, narrower than the prior outlook of a loss of $3.35-$3.60.

Zacks Rank

Teladoc Health currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the medical sector players that reported third-quarter results so far, the bottom lines of UnitedHealth Group Incorporated UNH, HCA Healthcare, Inc. HCA and Tenet Healthcare Corporation THC have beat the respective Zacks Consensus Estimate.

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Top-Line Details

Financial services revenues (32.5% of revenues) increased 4.3% year over year at cc to $1.54 billion. Increase in digital revenues and strong contribution from acquisitions drove growth.

Healthcare revenues (28.5% of revenues) increased 9.8% year over year at cc to $1.35 billion, driven by growth in life sciences businesses and increased demand for its services among pharmaceutical companies. Strong demand for the company’s integrated software solutions from healthcare clients drove top-line growth.
 

Cognizant Technology Solutions Corporation Price, Consensus and EPS Surprise

Cognizant Technology Solutions Corporation price-consensus-eps-surprise-chart | Cognizant Technology Solutions Corporation Quote

Products and Resources revenues (23.3% of revenues) increased 18.1% year over year at cc to $1.11 billion due to strong demand from retail, consumer goods, travel and hospitality clients, as well as solid contribution from acquisitions.

Communications, Media and Technology revenues (15.6% of revenues) were $739 million, up 19.1% from the year-ago quarter at cc. Acquisitions and increased demand from technology clients drove growth.

Region-wise, revenues from North America increased 9.5% year over year at cc and represented 73.5% of total revenues.

Revenues from Europe increased 13.7% from the year-ago quarter at cc and accounted for 19.3% of total revenues. Revenues from the United Kingdom and Continental Europe increased 18.8% and 9.6% year over year, at cc, respectively.

Rest of the World revenues rose 21% at cc and represented 7.3% of total revenues.

Operating Details

Selling, general & administrative (SG&A) expenses, as a percentage of revenues, increased 50 bps year over year to 19.5%.

Net headcount increased 12.5% year over year. Quarterly annualized attrition was 37%, up from 31% reported in the previous quarter.

Cognizant reported non-GAAP operating margin of 15.8%, which contracted 10 bps year over year.

Balance Sheet

Cognizant had cash and cash equivalents (and short-term investments) of $2.41 billion as of Sep 30, 2021, compared with $1.85 billion as of Jun 30, 2021.

The company has no significant debt maturities until 2023. As of Sep 30, 2021, Cognizant had a total debt of $674 million, down from $683 million as of Jun 30, 2021.

Cognizant generated $948 million in cash from operations compared with $541 million reported in the previous quarter.

Free cash flow was $897 million compared with $466 million reported in the previous quarter.

In third-quarter 2021, Cognizant returned $129 million through share repurchases and $127 million in dividends to shareholders.

As of Sep 30, 2021, Cognizant had $2.2 billion remaining under the current share-repurchase program.

Guidance

Fourth-quarter 2021 revenues are expected between $4.75 billion and $4.79 billion, indicating growth of 13.3%-14.3% on a cc basis.

2021 revenues are now expected to be $18.5 billion, indicating growth of 9.8% on a cc basis.

The company expects adjusted operating margin to be 15.4% in 2021 compared with 14.4% reported in 2020.

2021 adjusted earnings are expected to be in the range of $4.02-4.06 per share (raised from $4-4.06 per share).

Zacks Rank & Stocks to Consider

Cognizant currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Apple AAPL, Trimble TRMB and Cognex CGNX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Apple, Trimble and Cognex are set to report their quarterly earnings on Oct 28, Nov 3 and Nov 4.

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On a GAAP basis, net earnings were $6.05 per share, down 15.6% year over year.

Revenues in the quarter under review increased 4.3% year over year to $4.06 billion and exceeded the Zacks Consensus Estimate by 13.4%.

The increase in revenues can be attributed to 10.2% growth in organic base business (excluding COVID-19 testing revenues), partially offset by a 6.8% decline in COVID-19 PCR and antibody testing. The quarter recognized 0.4% growth from acquisitions and 0.5% contribution from favorable foreign currency translation. 

Quarter in Detail

LabCorp reports results under two operating segments — LabCorp Diagnostics and Covance Drug Development.

LabCorp Diagnostics third-quarter revenues of $2.62 billion reflected a 3.2% drop year over year. On an organic basis, revenues declined 3.9%. There was a 0.3% favorable impact from foreign currency translation. Acquisition-related growth was 0.4% in the quarter. While base business reported 5.8% growth, COVID-19 testing revenues declined 9.7% in the reported quarter.

The company witnessed a 0.2% rise in total volume (measured by requisition). Organic volume edged down 0.1%. Acquisition volume growth was 0.2%. Organic volume growth was impacted by a 5.9% drop in COVID-19 testing, partially offset by a 5.9% increase in base business. Organic Base Business volume was up 7.7% year over year.

Laboratory Corporation of America Holdings Price, Consensus and EPS Surprise

Laboratory Corporation of America Holdings price-consensus-eps-surprise-chart | Laboratory Corporation of America Holdings Quote

Covance Drug Development revenues grew 17.5% to $1.46 billion in the third quarter on organic Base Business growth of 19.9%, acquisition growth of 0.4% and favorable foreign currency translation of 1%. However, this was partially offset by 3.5% decline in COVID-19 testing performed through its Central Laboratories business and a 0.3% negative impact of divestitures.

Margins

Gross margin contracted 592 basis points (bps) to 34.1% in the third quarter. Adjusted operating income was $865.6 million, marking a 24.1% plunge from the year-ago period. Adjusted operating margin contracted 795 bps from the year-ago quarter to 21.3%.

Cash Position

LabCorp exited the third quarter with cash and cash equivalents of $2.04 billion compared with $1.96 billion at the end of the second quarter. Cumulative cash flow from operating activities at the end of the third quarter was $767.3 million, down from $786.2 million a year ago. Additionally, cumulative free cash flow at the end of the third quarter was $2.10 billion, up from $1.08 billion a year ago.

In the third quarter, the company repurchased shares worth $300 million under its existing share repurchase program.

2021 View

The company raised its 2021 guidance. Total LabCorp Enterprise revenues are expected to grow in the range of 13-14% (earlier expectation was 6.5-9% growth). This includes Base Business growth in the range of 18.5-19.5% (17-19%). COVID-19 testing revenues are expected to decline in the range of 6-11% (down 33-38%).

Total Diagnostics revenues are expected to grow 8-10% (earlier expectation was down 1% to up 2%). Total Drug Development revenues are expected to rise 19.5-20.5% (17-19% growth expected earlier) from 2020.

The Zacks Consensus Estimate for full-year revenues is pegged at $15.26 billion, projecting 9.2% growth from 2020.

Our Take

LabCorp exited the third quarter of 2021 with better-than-expected earnings and revenues. However, the earnings figure declined on a year-over-year basis.

Diagnostics revenues in the quarter were significantly impacted by decelerating demand for COVID-19 testing.

Covance Drug Development however delivered higher sales on strong base business growth. In the quarter under review, overall base Business improved 14.6%. On projection of an improved outlook for the rest of the year, the company has raised its full-year guidance.

Zacks Rank

LabCorp currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space that have announced quarterly results are Quest Diagnostics Incorporated DGX, Abbott Laboratories ABT, and HCA Healthcare, Inc. HCA. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Quest Diagnostics, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $3.96, which beat the Zacks Consensus Estimate by 33.8%. Third-quarter revenues of $2.77 billion outpaced the consensus mark by 12.6%.

Abbott reported third-quarter 2021 adjusted EPS of $1.40, which surpassed the Zacks Consensus Estimate by 52.2%. Third-quarter revenues of $10.93 billion outpaced the Zacks Consensus Estimate by 15.3%. It currently carries a Zacks Rank #2.

HCA Healthcare, carrying a Zacks Rank #2, reported third-quarter 2021 adjusted EPS of $4.57, surpassing the Zacks Consensus Estimate by 11.5%. Revenues of $15.28 billion surpassed the Zacks Consensus Estimate by 4.7%.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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eBay Inc. Price, Consensus and EPS Surprise

 

eBay Inc. price-consensus-eps-surprise-chart | eBay Inc. Quote

GMV Details

The company’s total GMV of $19.5 billion in the reported quarter exhibited a year-over-year decline of 10% and 12% on a reported and an FX-neutral basis, respectively. The company witnessed weak momentum across its mobility business in the third quarter. Also, a shift in the consumer preferences toward leisure activities and travels led to diminishing volume in the reported quarter.

The reported GMV missed the Zacks Consensus Estimate of $21.04 billion.

Notably, eBay’s GMV is entirely generated by the Marketplace platform after the sale of StubHub. Marketplace GMV is categorized into two parts.

U.S. GMV totaled $8.97 billion, which accounted for 46.1% of total GMV, down 8% from the year-ago quarter.

International GMV was $10.5 billion, which accounted for 53.9% of total GMV. It fell 12% on a year-over-year basis.

Revenues in Detail

eBay’s revenues are classified into two types:

Net Transaction: The company reported net transaction revenues of $2.35 billion in the quarter under review, accounting for 94% of the total revenues. Further, the figure was up 12% from the year-ago quarter. Notably, net transaction revenues are entirely generated by the Marketplace platform.

Marketing Services and Other: eBay generated $151 million of total marketing services and other revenues (6% of total revenues), down 6% from the year-ago quarter.

Operating Details

In the third quarter, eBay’s gross margin was 72.9%, contracting 590 basis points (bps) year over year.

Operating expenses of $1.2 billion rose 3.8% year over year. As a percentage of net revenues, the figure contracted 310 bps to 46.4% from the year-ago quarter.

The non-GAAP operating margin was 31.7% in the third quarter, contracting 270 bps year over year.

Balance Sheet & Cash Flow

As of Sep 30, 2021, cash equivalents and short-term investments were $5.3 billion, down from $6.9 billion as of Jun 30, 2021.

Long-term debt was $7.7 billion at the end of the reported quarter compared with $8.3 billion at the end of the last reported quarter.

The company generated $661 million of cash from operating activities in the third quarter, down from $1.07 billion in the second quarter.

Its free cash flow stood at $502 million in the reported quarter.

The company repurchased $2.3 billion worth of shares and paid out dividends of $116 million in the reported quarter.

Guidance

For fourth-quarter 2021, eBay expects net revenues of $2.57-$2.62 billion. On a FX-neutral basis, year-over-year growth in revenues is anticipated to be 3-5%. The Zacks Consensus Estimate for revenues is pegged at $2.65 billion.

Non-GAAP earnings per share are anticipated to be between 97 cents and $1.01. Notably, the Zacks Consensus Estimate for the same is pegged at 98 cents.

Zacks Rank & Other Stocks to Consider

Currently, eBay carries a Zacks Rank #2 (Buy).

AutoNation, Inc. AN, Revolve Group, Inc. RVLV and JD.com, Inc. JD are some other top-ranked stocks in the broader Retail-Wholesale sector. While AutoNation sports a Zacks Rank #1 (Strong Buy) at present, Revolve and JD.com carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for AutoNation, Revolve and JD.com are pegged at 19.08%, 20.71% and 26.89%, respectively.

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The company’s results benefited from reduced expenses, partly offset by dampened revenues and lower underwriting profit.

Quarter in Detail

The company’s operating revenues of $74 million plunged 12% year over year due to lower net premiums earned and softer net investment income. The top line missed the consensus mark by 3.4%.

Net premiums earned fell 9.6% year over year to $67.6 million in the third quarter due to reduced voluntary premiums resulting from consistently lower approved state loss costs.

Net investment income of $6.1 million slumped 14.4% year over year primarily due to decline in investment yields on fixed-income securities.

Pre-tax underwriting profit fell 5.2% year over year to $19.3 million in the quarter under review.

Total expenses of $48.3 million decreased 11.1% year over year on account of lower loss and loss adjustment expenses incurred.

Net combined ratio improved 130 basis points (bps) year over year to 71.5% in the third quarter.

Financial Update (as of Sep 30, 2021)

The company exited the third quarter with cash and cash equivalents of $123.1 million, which doubled itself from the 2020-end level.

Total assets of $1.5 billion inched up 0.6% from the figure as of Dec 31, 2020.

Shareholders’ equity totaled $480.2 million, which rose 9.4% from the level at the 2020 end.

Book value per share of $24.80 dipped 0.5% year over year.

Operating return on average adjusted equity came in at 17.2%, which contracted 260 bps year over year.

Dividend Update

Concurrent with the third-quarter earnings release, AMERISAFE’s board of directors approved a quarterly dividend of 29 cents per share. The dividend will be paid out on Dec 17, 2021, to shareholders of record as of Dec 3.

Besides, the company announced a special cash dividend of $4.00 per share, which will be paid on Nov 17, 2021, to shareholders of record as of Nov 10.

Zacks Rank

AMERISAFE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Of the insurance industry players that have reported third-quarter results so far, the bottom line of Aflac Incorporated AFL, First American Financial Corporation FAF and Cincinnati Financial Corporation CINF beat the Zacks Consensus Estimate.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Behind the Headlines

Alliance Data reported total revenues of $1.1 billion, up 5% year over year, attributable to higher revenues at the Card Services segment, offset by lower revenues at the LoyaltyOne segment. The top line beat the Zacks Consensus Estimate by 0.9%.

Operating expenses decreased 5.7% year over year to $716.5 million. Operating income increased 31.5% year over year to $382.8 million, largely due to lower expenses.

EBT increased 65% to $291 million due to lower provision for loan loss.

Segment Update

LoyaltyOne: Revenues totaled $169.3 million, down 8% year over year. EBT increased 143% to $45 million due to lower cost of redemptions and amortization expense.

AIR MILES reward miles issued increased 9%, due in part to higher redemptions, as well as the impact of favorable currency exchange rates. AIR MILES reward miles redeemed increased 30%, reflecting an improvement in travel-related categories.

BrandLoyalty revenues decreased 18% due to a decline in retailer programs associated with the continuing impact of COVID-19.

Card Services: Revenues were $930 million, up 7% year over year, primarily due to the negative impact of the pandemic on gross revenue yields in the third quarter of 2020. EBT increased 48% to $314 million, attributable to improved revenues, lower interest expense, and a lower provision for loan loss.

Financial Update

As of Sep 30, 2021, cash and cash equivalents was $3.2 billion, up 2.9% from Dec 31, 2020-level.

At quarter-end, the debt level was down 2.6% from 2020-end to $2.7 billion.

Cash from operations decreased 18.8% year over year to $1.1 billion in the first nine months of the year. Capital expenditure at Alliance Data increased 55.1% year over year to $58.8 million in the same period.

Dividend Update

The board of directors approved a quarterly dividend of 21 cents to be paid out on Dec 17 to stockholders of record as of Nov 12.

Spin-off of the LoyaltyOne Segment

The spin-off of the LoyaltyOne segment is expected to happen on Nov 5, 2021. Following the spin-off, Alliance Data will retain a 19% ownership in Loyalty Ventures Inc., and expects to receive a $750 million cash distribution from it, which it will use for deleveraging. The spin-off is expected to provide a significant improvement in Alliance Data’s capital metrics. Loyalty Ventures will have the opportunity to focus on its unique strategic priorities and make meaningful investments to drive growth and efficiencies.

Guidance

Total revenues in 2021 are anticipated to be down in low single digits year over year due to lower receivables.

Credit sales are estimated to increase at a double-digit growth rate, providing positive receivables growth momentum into 2022.

Based on the current visibility and payment rate expectations, receivables at year-end 2021 are projected to be in line with year-end 2020 levels. The company expects to resume high-single- to low-double-digit average receivables growth in 2022.

The company expects total expenses, excluding provision for loan loss, to be flat to modestly down year over year while it continues to fund initiatives to position the company for future growth.

In 2021, the company is investing over $100 million in digital innovation and technology enhancements and expects to continue to invest in 2022.

Zacks Rank

Alliance Data currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Another Financial Transaction Services Release

American Express’ AXP third-quarter 2021 earnings beat the Zacks Consensus Estimate.

Upcoming Releases

Global Payments GPN is set to release third-quarter 2021 earnings on Nov 2. The Zacks Consensus Estimate for the same stands at $2.05 per share.

The Western Union Company WU is set to release third-quarter 2021 earnings on Nov 2. The Zacks Consensus Estimate for the same stands at 58 cents per share.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The net interest income (NII) was $362.5 million, lagging the Zacks Consensus Estimate of $410.2 million. The figure declined 19% year over year.

With continued low financing costs, Annaly witnessed a rise in net interest spread. However, the company registered a year-over-year decline in book value per share (BVPS) and the average yield on interest-earning assets.

In the third quarter of 2021, the company closed the previously announced sale of substantially all of the assets that comprise the commercial real estate business for $2.33 billion. The remaining assets are expected to be legally transferred by the end of fourth-quarter 2021.

Inside the Headlines

At the third-quarter end, the company had $94.2 billion of total assets, with 92% of assets invested in the Agency portfolio. At the end of the quarter, unencumbered assets stood at $9.8 billion.

In the reported quarter, the average yield on interest-earning assets (excluding premium amortization adjustment or PAA) was 2.63%, down from the prior-year quarter’s 2.86%.Average GAAP costs of interest-bearing liabilities were 0.32%, declining from 0.60%.

Net interest spread (excluding PAA) of 1.97% for the third quarter rose from 1.93% in the prior-year quarter. The net interest margin (excluding PAA) in the reported quarter was 2.04% compared with 2.05% witnessed in third-quarter 2020.

Annaly’s BVPS was $8.39 as of Sep 30, 2021, sequentially up from $8.37. However, BVPS compared unfavorably with $8.70 as of Sep 30, 2020. At the end of the reported quarter, the company’s economic capital ratio was 14.2%, rising from 13.6% in the prior-year quarter.

For the September-end quarter, the weighted average actual constant prepayment rate was 23.1%, sequentially down from 26.4%.

Economic leverage was 5.8X as of Sep 30, 2021, flat sequentially and down from 6.2X in the prior-year quarter. The company generated an annualized EAD return on average equity (excluding PAA) of 12.81% in the third quarter, down from the prior quarter’s 13.05%.

Annaly currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance and Earnings Dates of Other mREITs

AGNC Investment Corp. AGNC reported a third-quarter 2021 net spread and dollar roll income per common share (excluding estimated "catch-up" premium amortization costs) of 75 cents per share, beating the Zacks Consensus Estimate of 63 cents. However, the reported figure declined from the third-quarter 2020 number of 81 cents.

We now look forward to the earnings releases of other mortgage REITs like Arbor Realty Trust, Inc. ABR and Chimera Investment Corporation CIM, which are scheduled to release their results on Oct 29 and Nov 3, respectively.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

In the last reported quarter, the company’s adjusted earnings per share of $2.61 surpassed the Zacks Consensus Estimate by 9.2%. The company’s earnings surpassed estimates in the trailing four quarters, the average beat being 16.73%.

Let’s take a look at how things have shaped up prior to this announcement.

Factors at Play

The Research Models and Services (RMS) segment is registering sturdy performance over the past few months banking on the recovery in Research Model order activity following the COVID-related disruption. RMS’ revenue growth in the second quarter was primarily led by robust demand for research models in China. With the overall macro-economic scenario remaining unchanged in China, this is expected to have continued in the third quarter. Meanwhile, strong demand for research models outside China is also likely to have driven growth.

Charles River Laboratories International, Inc. Price and EPS Surprise

Charles River Laboratories International, Inc. price-eps-surprise | Charles River Laboratories International, Inc. Quote

In its second-quarter earnings call, Charles River noted that its client base in China had shifted from being dominated by academic and government accounts to a vibrant mid-tier biotech and CRO client base. This expansion in client base can also be viewed as a potential growth driver for the RMS arm. Further, new academic client wins in the second quarter, from client shutdowns related to COVID-19 last year and, more recently, digital engagements aimed at the academic client base also make room for growth in the RMS arm.

Within the Discovery and Safety Assessment (DSA) arm, the Safety Assessment business is likely to have gained from robust demand from both biotech and global biopharma clients coupled with price increases, as it did in the previous quarter. The company earlier noted that it is well-positioned to meet this robust demand as it continues to expand its scale, science and innovative technologies through a combination of internal investment, M&A and strategic partnership strategy. The Discovery business is likely to have gained from the comprehensive portfolio of oncology, CNS, early discovery and antibody discovery capabilities in the third quarter. In its second-quarter earnings update, the company noted that these capabilities were enhanced through the Distributed Bio and Retrogenix acquisitions. Further, bookings and proposal volume continued to reach record highs in the second quarter, with strength across all regions and main service areas. This trend is likely to have continued in the third quarter, driving the top line.

The Manufacturing Support, similar to the second quarter, is expected to have gained from revenue growth in the Biologics Testing Solutions and Microbial Solutions businesses. In the second quarter, strong demand for cell and gene therapy testing services as well as COVID-19 vaccination work drove the Biologics Testing business. Notably, Charles River expects cell and gene therapies to be long-term growth drivers. Further, the company earlier stated that the commercial production of COVID vaccines is likely to continue for many years to come, which will support the demand for manufacturing services. This should get reflected through the company’s third-quarter results.

The acquisition of Vigene Biosciences, completed in late June, is also likely to have helped the Manufacturing Support arm grow in the third quarter. The Vigene Biosciences buyout, with its viral vector-based gene delivery systems, enables the firm to achieve its goal of building a comprehensive cell and gene therapy portfolio that covers all the key CDMO platforms.

Q3 Estimates

The Zacks Consensus Estimate for third-quarter 2021 revenues is pegged at $908.6 million, suggesting a 22.2% surge over the year-ago reported figure.

The Zacks Consensus Estimate for the company’s third-quarter 2021 earnings per share of $2.56 indicates a 9.9% uptick from the year-ago reported figure.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: The company has an Earnings ESP of +1.12%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #4 (Sell).

Stocks Worth a Look

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Horizon Therapeutics Public Limited Company HZNP has an Earnings ESP of +0.97% and a Zacks Rank of 2. The company will release third-quarter 2021 results on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Insulet Corporation PODD has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Nov 4.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +10.62% and a Zacks Rank of 2. The company will report third-quarter 2021 results on Nov 2.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Net sales in the reported quarter increased 10.1% on a reported as well as CER basis to $12.31 billion (€10.43 billion), driven by higher sales of Sanofi’s blockbuster eczema medicine, Dupixent, and vaccines. Sales slightly missed the Zacks Consensus Estimate of $12.49 billion.

Sales rose 13.4% at CER in the United States and 6.7% in the Rest of the World (includes China, Japan, Brazil and Russia). In Europe, sales increased 8.9%.

All growth rates mentioned below are on a year-on-year basis and at CER.

Segmental Performance

Pharmaceuticals sales rose 7.8% in the quarter to €6.86 billion, driven by strong performance of Dupixent.

Sanofi Specialty Care GBU sales increased 20.2% to €3.29 billion, mainly driven by Dupixent.

In the immunology and neurology franchise, Dupixent generated sales of €1.41 billion in the quarter, up 54.6% year over year. Sales of the drug in the United States rose 47.7%, driven by continued growth in atopic dermatitis and rapid uptake in asthma and chronic rhinosinusitis with nasal polyposis indications. Sales rose 78.4% in Europe and 82.3% in Rest of the world.

Aubagio sales declined 3.8% to €483 million, hurt by lower sales in the U.S. market due to competitive launches. Kevzara recorded sales of €83 million in the quarter, up 42.4%, driven by higher demand for IL-6 receptor blockers and a temporary shortage of tocilizumab. Sanofi markets Dupixent and Kevzara in partnership with Regeneron REGN.

Sales of rare disease drugs rose 5.4% to €779 million. Myozyme sales rose 10.4% to €266 million. Fabrazyme sales were €209 million, up 3.4%. Cerezyme sales declined 0.6% to €159 million.

Oncology sales increased 8.1% to €225 million, driven by launches of Sarclisa and Libtayo, which offset the decline in sales of Jevtana. Libtayo sales were €35 million while Sarclisa sales were €48 million, both slightly higher than the previous quarter. Jevtana’s sales declined 20.9% to €105 million due to the entry of generic competition in Europe.

The rare blood disorders franchise recorded sales of €287 million, down 1.4% year over year Sales of Eloctate declined 4.6% to €144 million in the quarter.  The new drug, Cablivi recorded sales of €42 million compared with €46 million in the previous quarter.

Sales in General Medicines GBU declined 1.7% to €3.57 billion, as growth of core drugs (like Toujeo, Soliqua, Praluent, Multaq, Lovenox and Plavix) was more than offset by lower sales of non-core drugs like Lantus and AprovelAvapro.

The Diabetes franchise declined 1.7% to €1.12 billion due to lower sales in the United States. Sales of diabetes drugs in the United States declined 13.4%. In Europe, sales declined 3.2% while in Rest of the World, sales increased 9.3%.

Lantus sales decreased 5.9% to €622 million in the quarter. Toujeo generated sales of €239 million in the reported quarter, up 11.1% year over year.

Sales of Cardiovascular and Established Rx Products came in at €2.24 billion, down 2.1% mainly as higher sales of core assets were offset by lower sales of Aprovel/Avapro and generics and divestment of non-core products.

Vaccines GBU sales rose 16.5% to €2.42 billion in the quarter, driven by the recovery in demand for the meningitis vaccines in the United States and higher sales of influenza vaccines.

While sales of flu vaccines rose 25.5%, sales of Polio/Pertussis/Hib vaccines rose 1.8% in the quarter. Meningitis vaccine sales were up 18.7%. Sales of travel and other endemic vaccines rose 16.9% in the quarter. Adult Booster vaccines sales grew 4.6% in the third quarter.

Consumer Healthcare stand-alone unit generated sales of €1.16 billion, up 11.1%, driven by the strong performance of Digestive Wellness and Pain Care categories.

Cost Discussion

Selling, general and administrative expenses increased 3.6% at CER in the quarter, reflecting increased investments in Specialty Care, which offset the benefit from cost savings. Research and development expenses increased 4.9% at CER as higher investments behind priority assets were partially offset by the termination of diabetes and cardiovascular care-related pipeline products.

2021 Guidance

Sanofi revised its earnings guidance for 2021 upward. The company now expects earnings to grow around 14% at CER in 2021 compared with the previous projection of 12%. However, it anticipates a negative currency impact in the range of 3.5%-4.5% on earnings versus the previous expectation of 4%-5%.

Our Take

Sanofi’s quarterly results were mixed as it beat estimates for earnings while missing the same for sales. Dupixent continued its outstanding performance in the quarter. The drug has, in a very short time, become the key top-line driver for Sanofi. With outside U.S. revenues accelerating and multiple approvals for new indications expected in the near future, Dupixent’s sales are expected to be higher. Record sales of vaccines also contributed to growth in the third quarter. As a result, the French drug giant revised its guidance upward for 2021, for the second time this year.

Sanofi stock has risen 2.1% this year so far compared with the industry’s rally of 12.7%.

Image Source: Zacks Investment Research

Sanofi made notable pipeline developments in the quarter that included positive data readouts for Dupixent in eosinophilic esophagitis and prurigo nodularis as well as the U.S. approval and launch of Nexviazyme in Pompe disease. The acquisition of Translate Bio in September 2021 accelerated Sanofi’s efforts to develop transformative vaccines and therapies using mRNA technology. Sanofi is also developing an adjuvanted recombinant protein candidate vaccine in partnership with Glaxo GSK that is in pivotal late-stage development.

Zacks Rank

Sanofi currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sanofi Price, Consensus and EPS Surprise

Sanofi price-consensus-eps-surprise-chart | Sanofi Quote

A better-ranked drugmaker is Vertex Pharmaceuticals VRTX, which carries a Zacks Rank of 2 (Buy). Its earnings estimate for 2021 has gone up from $12.37 to $12.43 over the past 60 days while that for 2022 has increased from $13.13 to $13.16 per share.

 

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

In the last-reported quarter, the company’s earnings per share (EPS) of $1.76 beat the Zacks Consensus Estimate by 17.3%. Moreover, its earnings surpassed the consensus estimate in three of the trailing four quarters and missed in one. The average earnings surprise was 9.54%.

Let's see how things have shaped up prior to the announcement.

Factors At Play

The Healthcare arm has been witnessing faster-than-expected recovery in customer demand since the fiscal first quarter, with its Key Surgical and Cantel Medical businesses contributing about 70% to consumable revenues.

In the previously-reported quarter’s earnings call, the company noted that it has taken several strategic decisions to increase the integration synergy of the Cantel acquisition (completed in early June). These decisions include utilizing the talent and expertise of the Cantel sales organization and creation of a dedicated sales channel focused solely on endoscope reprocessing. The company expected these decisions to impact the way it approaches the market with a customer-first mentality. This should have positively contributed to the company’s fiscal second-quarter sales.

STERIS plc Price and EPS Surprise

STERIS plc price-eps-surprise | STERIS plc Quote

The company also noted by combining STERIS, Key Surgical and Cantel, it has made significant progress in realigning its European Healthcare business. We expect this to be reflected in STERIS’ to-be-reported quarter’s results. Further, the Healthcare segment is expected to gain from a record capital backlog at the end of the fiscal first quarter with surgical and infection prevention strength.

The Zacks Consensus Estimate for Healthcare revenues is pegged at $727 million, suggesting a surge of 54.4% from the year-ago quarter’s reported figure.

The Applied Sterilization Technologies (AST) arm is also likely to gain from increased demand from medical device customers in the fiscal second quarter, as it did in the previous quarter. The company expects this arm to remain strong as its core medical device customers continue to benefit from the rebound in procedures and rebuilding of some inventory. In addition, demand for COVID-related products and vaccines as well as bioprocess manufacturing disposables is anticipated to remain robust, benefitting the AST arm.

The Zacks Consensus Estimate for AST revenues is pegged at $195 million, suggesting a rise of 15% from the year-ago quarter’s reported figure.

The Life Sciences segment, similar to the prior quarter, is likely to benefit from consistently growing capital equipment and service revenues. Notably, in the fiscal first quarter, this segment rose 3.9% on 8% growth in capital equipment revenues and 17% growth in service revenues.

The Zacks Consensus Estimate for Life Sciences revenues is pegged at $122 million, suggesting a rise of 5.4% from the year-ago quarter.

The company also introduced a new Dental segment in the fiscal first quarter and mapped the Cantel businesses to STERIS’ four reporting segments. Notably, the Dental arm generated $35.2 million in revenues in the fiscal first quarter, representing one month of financial performance. Based on this remarkable performance, we anticipate significant revenue growth in this arm in the to-be-reported quarter as well.

Q2 Estimates

The Zacks Consensus Estimate for second-quarter fiscal 2022 revenues is pegged at $1.16 billion, suggesting an improvement of 53.58% from the year-ago reported figure.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2022 EPS of $1.83 suggests a 23.65% uptick from the year-ago reported figure.

What Our Model Suggests

Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has higher chances of beating estimates. However, this is not the case here as you can see:

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2.

Stocks Worth a Look

Here are a few stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.

Horizon Therapeutics Public Limited Company HZNP has an Earnings ESP of +0.97% and a Zacks Rank of 2. The company will release third-quarter 2021 results on Nov 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Insulet Corporation PODD has an Earnings ESP of +15.79% and a Zacks Rank of 2. The company is scheduled to release third-quarter 2021 results on Nov 4.

Vertex Pharmaceuticals Incorporated VRTX has an Earnings ESP of +10.62% and a Zacks Rank of 2. The company will report third-quarter 2021 results on Nov 2.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

In the last reported quarter, the company delivered an earnings surprise of 14.29%. Its earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 17.88%.

Factors to Note

During the last few quarters, the company has been witnessing a ramp up in demand for solar products across all business scope and geographies. Also, consistent increase in sell-through and installation rates in both residential and commercial products has been boosting revenues. This trend is likely to have continued in the third quarter as well. This, in turn, might get reflected in SolarEdge’s third-quarter topline.

During the second quarter, the company successfully initiated shipments of SolarEdge energy bank residential battery and inverters to the United States and Europe. Sales of these products are likely to have positively impacted the company’s revenues in the to-be-reported quarter.

However, in the beginning of the third quarter, the company’s Vietnam manufacturing facility was working at reduced capacity due to coronavirus-led lockdowns. This may have an adverse impact on its quarterly performance. However, the expanded manufacturing rate in China might have offset the impact.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $529.7 million, suggesting growth of 56.7% from the year-ago quarter.

The company has been facing component shortages,which tend to result in higher cost for components, due to the impact of the COVID-19 pandemic. It has also been experiencing higher logistic costs and freight expenses. Such cost increases are expected to have weighed on SolarEdge’s performance in the to-be reported quarter.

However, the modest price increases implemented by the company may have contributed to the third-quarter performance.

Also, the expansion initiatives taken by the company in its manufacturing facilities are likely to get reflected in the to-be-reported quarter’s results.

The Zacks Consensus Estimate for third-quarter earnings is pegged at $1.38 per share, indicating an improvement of 14.1% from the prior-year reported figure.

SolarEdge Technologies, Inc. Price and EPS Surprise

SolarEdge Technologies, Inc. price-eps-surprise | SolarEdge Technologies, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SolarEdge this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP:The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SolarEdge currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three solar players you may want to consider, as these have the right combination of elements to post an earnings beat this season:

FTC Solar, Inc FTCI has an Earnings ESP of +6.57% and a Zacks Rank #3.

Array TechnologiesARRY has an Earnings ESP of +146.67% and a Zacks Rank #3.

Sunrun RUN has an Earnings ESP of +504.92% and a Zacks Rank #2.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The company’s results gained on the back of improved revenues driven by strong performance by the Inpatient Rehabilitation segment, partly offset by COVID-linked headwinds troubling the Home Health and Hospice segment, and escalating costs.

Behind the Headlines

The company’s net operating revenues advanced 9.4% year over year to $1.3 billion in the third quarter, courtesy of the Inpatient Rehabilitation segment, which in turn, was driven by solid discharge growth and favorable pricing. However, the top line was partially affected by COVID-related headwinds that strained volume growth and increased costs in the home health and hospice business. The top line lagged the consensus mark by 2.4%.

Adjusted EBITDA of $245.6 million rose 6.7% year over year in the quarter under review.

Total operating expenses of $1.1 billion increased 8.4% year over year due to a rise in salaries and benefits, other operating expenses, general and administrative expenses, and depreciation and amortization.

General and administrative expenses, excluding stock-based compensation, increased 5.2% year over year to $32.4 million in the third quarter.

Segmental Results

Inpatient Rehabilitation

Revenues at the segment amounted to $1 billion, which improved 12.4% year over year. The growth came on the back of an 11.4% rise in revenues from the inpatient business, riding on favorable pricing and volume growth. The segment’s revenue growth was also driven by the 67.9% surge in outpatient and other business revenues.

Adjusted EBITDA grew 10.7% year over year to $231.6 million in the third quarter, attributable to improved revenues.

Home Health and Hospice

Encompass Health is looking for strategic alternatives aimed at partial or complete separation of the home health and hospice business in relation to which management is eyeing a transaction in the first half of 2022. Detailed information about the timing and type of separation transaction is likely to be disclosed with the company’s fourth-quarter 2021 earnings release.

Coming back to the third quarter, the segment’s revenues of $273.9 million dipped 0.2% year over year due to a 1% drop in revenues at the Home Health sub-unit. The sub-unit was affected by reduced admissions stemming from COVID-19 headwinds. Meanwhile, Hospice sub-segment revenues increased 3.1% year over year to $52.8 million.

Adjusted EBITDA plunged 10.4% year over year to $46.4 million in the third quarter due to pandemic-linked headwinds resulting in reduced volumes and higher costs.

Financial Update (as of Sep 30, 2021)

Encompass Health exited the third quarter with cash and cash equivalents of $94.8 million, which more than doubled from the 2020-end figure.

Total assets of $6.7 billion increased 4.3% from the level at 2020-end.

The company’s long-term debt, net of current portion totaled $3.1 billion, which declined 3.3% from the figure as of Dec 31, 2020.

Adjusted free cash flow of $124.1 million remained flat year over year.

Slashed 2021 Outlook

Concurrent with third-quarter results, the company trimmed its full-year outlook for certain metrics taking the prevailing volatile environment into consideration.

Since the company has not yet arrived at a final decision regarding the home health and hospice business, it has considered the existing business structure while laying down expectations.

This year, management anticipates net operating revenues within $5.08 billion to $5.13 billion, down from the previous outlook of $5.10-$5.25 billion.

Adjusted EBITDA is projected to lie in the range of $1.025-$1.045 billion, lower than the prior guidance of $1.05-$1.07 billion.

Adjusted earnings per share from continuing operations are forecast between $4.23 and $4.38 in 2021, down from the prior outlook of $4.32-$4.47.

Zacks Rank

Encompass Health currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the medical sector players that reported third-quarter results so far, the bottom lines of UnitedHealth Group Incorporated UNH, HCA Healthcare, Inc. HCA and Anthem, Inc. ANTM have beat the Zacks Consensus Estimate.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

In the last reported quarter, the company’s earnings matched the estimates. PSEG has a trailing four-quarter negative earnings surprise of 3.20%, on average.

Factors to Note

During major parts of the third quarter, Public Service Enterprise’s service territory areas experienced warmer-than-normal temperature, which may have boosted electricity demand for cooling purposes. This is likely to have benefited the company’s performance in the to-be-reported quarter.

Withthe economy gradually gaining momentum, PSEG may have witnessed an uptick in demand from commercial and industrial space. This is likely to have favored the to-be-reported quarter's performance.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $2.66 billion, suggesting growth of 12.1% from the year-ago quarter.

The various capital investment programs initiated by the company are likely to have contributed to the performance in the quarter to be reported. However, seasonal price impact of recontracting might have weighed on the third-quarter bottom line.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 92 cents per share, indicating a decline of 4.2% from the prior-year reported figure.

Public Service Enterprise Group Incorporated Price and EPS Surprise

Public Service Enterprise Group Incorporated price-eps-surprise | Public Service Enterprise Group Incorporated Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for PSEG this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP:The company’s Earnings ESP is -0.82%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PSEG currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three Utilities players you may want to consider, as these have the right combination of elements to post an earnings beat this season:

AES CorporationAES has an Earnings ESP of +3.53% and a Zacks Rank #3.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +0.30% and a Zacks Rank #3.

Edison InternationalEIX has an Earnings ESP of +1.46% and a Zacks Rank #3.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Willis Towers Watson Public Limited Company Price, Consensus and EPS Surprise

Operational Update

Revenues improved 4% year over year to $2 billion in the third quarter. Revenues grew 7% on an organic basis and 3% on a constant currency basis. The top line missed the Zacks Consensus Estimate of $2.1 billion.

Total costs of providing services dropped 54% year over year to $842 billion due to a decrease   in transaction and integration expenses.

Adjusted operating income amounted to $264 million, which improved 14.3% year over year. Margin came in at 13.4%, up 120 basis points (bps) year over year.

Adjusted EBITDA climbed 10.7% year over year to $415 million in the third quarter. Adjusted EBITDA margin was 24.4%, up 220 bps year over year.

Quarterly Segment Update

Human Capital & Benefits: Total revenues of $852 million improved 7% year over year (5% increase constant currency and 6% organic increase). On an organic basis, Technology and Administrative Solutions, Health and Benefits, Retirement and Talent and Rewards all delivered revenue growth. The operating margin came in at 28.4%, up 210 bps year over year.

Corporate Risk & Broking: Total revenues of $697 million rose 7% year over year (up 6% in both constant currency and organic basis). On an organic basis, North America, International, Western Europe and Great Britain generated revenue growth with new business generation and strong renewals across several insurance lines. The operating margin came in at 16.3%, up 380 bps year over year.

Investment, Risk & Reinsurance: Total revenues of $172 million declined 22% year over year (down 24% constant currency but up 10% organic). On an organic basis, Insurance Consulting and Technology business and the Investment business exhibited growth. The segment’s operating margin came in at 12.9%, up 360 bps year over year.

Benefits Delivery & Administration: Total revenues of $242 million climbed 7% year over year (up 7% both constant currency and organic). The increase was driven by Individual Marketplace, primarily by TRANZACT, which generated revenues of $111 million in the third quarter with strong growth in Medicare Advantage sales. Benefits Outsourcing revenues also increased. The operating margin was negative 7.9% compared with negative 5.3% reported in the prior-year quarter.

Financial Update

As of Sep 30, 2021, the company’s cash and cash equivalents totaled $2.2 billion, which improved 6% from the 2020-end level.

Long-term debt declined 15.7% from 2020-end to nearly $4 billion in the quarter under review.

As of Sep 30, 2021, shareholders’ equity of $11.4 billion rose 4.6% from the level as of Dec 31, 2020.

Cash flow from operating activities in the first nine months of 2021 decreased 56% year over year to $1.9 billion. Adjusted free cash flow increased 17% year over year to $1.2 billion.

The company bought back $1 billion worth share in the first nine months of 2021.

2021 Guidance

Willis Towers expects organic revenue growth of around 6%. Adjusted operating margin is estimated in the range of 19.5% to 20.0%

Zacks Rank

Willis Towers Watson currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurance Brokers

Of the insurance brokers that have reported third-quarter results, the bottom line of Brown & Brown, Inc. BRO and Marsh & McLennan Companies, Inc. MMC beat the Zacks Consensus Estimate.

Upcoming Release

Aon plc AON is due to release its third-quarter earnings on Oct 29. The Zack Consensus Estimate for the to-be-reported quarter earnings per share is pegged at $1.67.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Q3 in Detail

Adjusted earnings of 44 cents per share increased 12.8% year over year and met the Zacks Consensus Estimate.

Net sales of $3,250 million surpassed the Zacks Consensus Estimate of $3,149 million and increased 7.6% from the year-ago quarter. The upside was driven by growth across all business segments, with the Beverage Concentrates and Latin America Beverages segments posting strong double-digit growth. On a constant-currency (cc) basis, net sales increased 6.8%, driven by an increased volume/mix of 3.2% and favorable net price realization of 3.6%.

In the third quarter, the company benefited from a robust in-market performance, with dollar consumption increasing 6.8% across the cold beverage retail base, including growth in categories such as CSDs, premium unflavored water, enhanced flavored water, apple juice, apple sauce, and coconut water. Dr Pepper, Sunkist, Canada Dry, A&W and Squirt CSDs, Evian, Bai, Vita Coco, Polar, and Mott's apple juice and apple sauce were the key brands aiding growth.

In coffee, the retail consumption for single-serve pods manufactured by KDP rose 4.3% in channels tracked by IRi. The dollar market share for pods manufactured by KDP advanced 83% in the third quarter. The company witnessed improvement in the away-from-home channel’s performance in the quarter. However, this Zacks Rank #4 (Sell) company notes that the increased consumer mobility is yet to translate into the return-to-office trend.

Adjusted operating income advanced 6.5% year over year to $931 million, driven by strong net sales growth, and adjusted gross margin expansion of 50 bps. On a cc basis, adjusted operating income increased 5.7%. Meanwhile, adjusted operating margin contracted 30 basis points to 28.6%, owing to significantly higher marketing investments.

Image Source: Zacks Investment Research

Segmental Details

Sales in the Coffee Systems segment advanced 5.3% year over year to $1,155 million. At cc, net sales rose 4.6%, owing to a higher volume/mix of 5.7% and favorable net price realization of 1.1%. Volumes/mix gained from pod volume, stemming from strength in the at-home business and the recovery in the away-from-home business, along with brewer volume growth.

Sales in the Packaged Beverages segment totaled $1,547 million, up 6.9% year over year. Segment sales rose 6.8% at cc, gaining from a favorable volume/mix of 1.5% and a higher net price realization of 5.3%. The segment benefitted from growth in CSDs, particularly Dr Pepper, Canada Dry, Sunkist, A&W, 7UP, and Squirt as well as growth in Polar and Mott's, somewhat offset by a decline in Snapple due to supply-chain issues and weakness in Hawaiian Punch.

Sales in the Beverage Concentrates segment rose 11.4% year over year to $392 million. At cc, the segment’s net sales increased 10.8%, gaining from favorable net price realization of 11.4% and volume/mix growth of 0.6%. Reduced concentrate shipments hurt volume/mix to some extent, while a recovery in the fountain foodservice business remained an upside.

The Latin America Beverages segment’s sales advanced 25.8% to $156 million. At cc, net sales increased 14.5%, owing to volume/mix growth of 10.5% and improved net price realization of 4%. Volume/mix was aided by the effects of the significantly higher marketing investments.

Financials

Keurig Dr Pepper ended the third quarter with cash and cash equivalents of $200 million. As of Sep 30, 2021, it had long-term obligations of $11,727 million and total stockholders’ equity of $24,405 million (excluding non-controlling interest). Net cash provided by operating activities totaled $1,933 million at the end of the third quarter.

The company generated a free cash flow of $676 million in the third quarter. The solid free cash flow enabled it to reduce total financial obligations by $327 million in the third quarter. For the nine months ended Sep 30, 2020, free cash flow totaled $1,626 million.

Outlook

Keurig Dr Pepper raised its cc sales view for 2021 and reiterated its adjusted earnings guidance. The company now expects cc net sales growth of 7-8% compared with 6-7% growth mentioned earlier. Management continues to expect adjusted earnings growth of 13-15%, backed by improved sales and any increase in profits anticipated to be reinvested in its business. The company expects management leverage ratio at or below 3.0X at the end of 2021.

Stocks to Consider

Albertsons Companies ACI, currently a Zacks Rank #1 (Strong Buy) stock, has an expected long-term earnings growth rate of 12%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Helen of Troy HELE currently has an expected long-term earnings growth rate of 8% and a Zacks Rank #2 (Buy).

General Mills GIS currently has an expected long-term earnings growth rate of 7.5% and a Zacks Rank #2.

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Image Source: Zacks Investment Research

Quarter in Detail

The company’s adjusted earnings of $1.75 per share grew 8% year over year and beat the Zacks Consensus Estimate of $1.55.

Net sales increased 2.5% to $2,822.7 million but missed the Zacks Consensus Estimate of $2,861 million. The lower-than-expected sales can be attributable to lower financial volume, thanks to economy brand declines and the U.S. domestic shipment timing. However, sales were aided by solid pricing in North America and Europe, and positive brand and channel mix, which led to year-over-year sales growth despite the aforementioned headwinds.

On a constant-currency (cc) basis, net sales rose 1%. Net sales per hectoliter increased 3.6% on a brand-volume basis, driven by strong net pricing, favorable brand mix linked to portfolio premiumization and a favorable channel mix due to the further reopening of on-premise.

Molson Coors Beverage Company Price, Consensus and EPS Surprise

 

Molson Coors Beverage Company price-consensus-eps-surprise-chart | Molson Coors Beverage Company Quote

Molson Coors’ worldwide brand volumes advanced 3.1% to 22.1 million. Financial volumes declined 3.9% to 22.9 million hectoliters primarily due to lower brand volume. Brand volume dipped 3.6%, owing to a decline in the United States, stemming from economy brands, lower Central Europe volumes and the lapping of prior-year volumes of the India business, which was disposed of in first-quarter 2021. This was partly negated by brand volume growth in Canada and Latin America due to the reopening of the on-premise channel.

Underlying (non-GAAP) EBITDA declined 9.8% year over year to $642.6 million and 10.9% on a constant-currency basis due to higher COGS resulting from inflation and mix, lower financial volume, and increased marketing spend to support brands and innovation. This more than offset sales growth, and lower general and administrative expenses.

Segmental Details

Molson Coors operates in the following geographical segments.

North America: Net sales in the segment dipped 1.2% to $2,224.7 million on a reported basis and 2.1% at cc, driven by lower financial volumes. Financial volumes declined 4.8% year over year due to lower brand volume and unfavorable shipment timing in the United States. North America brand volume dropped 3.8% on a 5.2% fall in the United States, owing to the de-prioritization of non-core SKUs for the economy brands. However, brand volume improved 0.5% in Canada and 9% in Latin America due to reduced on-premise restrictions in the third quarter.

Net sales per hectoliter, on a brand volume basis, rose 2.4% at cc on a favorable brand mix and higher net pricing. On the flip side, an unfavorable geographic mix, stemming from higher license volumes in Latin America, acted as a deterrent. Underlying EBITDA fell 13.6% on a reported basis to $502.6 million and 14.3% at cc.

Europe: The segment’s net sales on a reported basis rose 19.2% to $601 million and 14.7% at cc. The uptick was due to higher net sales per hectoliter on a reported basis. Net sales per hectoliter (brand volume basis) for the segment rose 11% at cc, resulting from favorable sales mix and higher pricing, along with the lapping of the prior year’s keg returns due to the on-premise closures amid the pandemic.

The segment’s financial volumes dipped 2% and brand volumes were down 3%, owing to the increased on-premise restrictions in some Central and Eastern Europe markets as well as the lapping of the prior-year volumes of the India business, which was disposed of in first-quarter 2021. The segment’s underlying EBITDA was up 5.6% on a reported basis to $127.2 million, and increased 2.7% at cc. The increase was driven by higher gross profit, aided by favorable sales mix and higher pricing, offset by cost inflation and rising MG&A expenses due to increased marketing spend to support its brands.

Other Financial Updates

Molson Coors ended the third quarter with cash and cash equivalents of $616.3 million. At the end of third-quarter 2021, the company had a total debt of $7.2 billion, resulting in net debt of $6.6 billion. In July, the company repaid 2.1% senior notes worth $1 billion, which matured on Jul 15.

In the nine months ended Sep 30, 2021, it generated cash from operating activities of $1,267.7 million, resulting in an underlying free cash flow of $933 million.

The company reinstated the quarterly dividend in the third quarter. It paid out a quarterly dividend of 34 cents on its class A and class B common shares on Sep 17.

Outlook

Despite the continued uncertainties related to the pandemic, management retained its view for 2021. The company is progressing with its revitalization plan, which targets long-term revenue and underlying EBITDA expansion.

Net sales are projected to grow in the mid-single digits at constant currency. Underlying EBITDA is likely to remain almost flat year over year at cc. Management estimates achieving a net debt to underlying EBITDA ratio of 3.25X by the end of 2021 and below 3.0X by 2022-end.

Underlying depreciation and amortization are projected at $800 million. The company now expects an underlying effective tax rate of 13-15% compared with 20-23% mentioned earlier. This is driven by the release of reserves for unrecognized tax positions in the third quarter. Consolidated net interest expenses are anticipated to be $270 million, plus or minus 5%.

Better-Ranked Stocks to Consider

The Duckhorn Portfolio, Inc. NAPA presently carries a Zacks Rank #2 (Buy). The company has a long-term earnings growth rate of 9.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Helen of Troy Limited HELE has an expected long-term earnings growth rate of 8%. It currently has a Zacks Rank #2.

Archer Daniels Midland Company ADM currently carries a Zacks Rank #2. It has a long-term earnings growth rate of 9%.

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Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Total Sales

In third-quarter 2021, Northrop Grumman reported total sales of $8,720 million, which missed the Zacks Consensus Estimate of $8,870 million by 1.7%. Sales decreased 4% from the year-ago quarter’s $9,083 million.

The downside was primarily due to a double-digit decline in Defense Systems’ sales.

Backlog Count

Northrop Grumman’s total backlog stood at $74.83 billion at the end of third-quarter 2021 compared with $81 billion at 2020-end. Of the total backlog, $30.28 billion was funded.

Segmental Details

Aeronautics Systems: Segment sales of $2,725 million declined 6% year over year due to lower volume in both Manned Aircraft and Autonomous Systems.

Operating income declined 10% to $265 million, whereas operating margin contracted 40 basis points (bps) to 9.7%.

Mission Systems: Segment sales decreased 5% to $2,436 million due to a $133 million reduction in sales related to the IT services divestiture.

Operating income rose 1% to $372 million, with operating margin expanding 80 bps to 15.3%.

Defense Systems: Sales at this segment declined 24% to $1,409 million due to a reduction in sales related to the IT services divestiture.

Operating income declined 19% to $175 million while operating margin expanded 70 bps to 12.4%.

Space Systems: Space Systems’ third-quarter 2021 sales rose 22% to $2,681 million owing to higher sales from Space and Launch & Strategic Missiles businesses.

The segment’s operating income soared 219% to $288 million while the operating margin contracted 50 bps to 10.7%.

Operational Update

Total operating costs and expenses at the end of the quarter were $7,677 million, down 5.2% from the year-ago quarter’s $8,098 million.

Operating income during the quarter increased 6% year over year to $1,043 million.

Financial Condition

Northrop Grumman’s cash and cash equivalents as of Sep 30, 2021 was $4,055 million, down from $4,907 million as of Dec 31, 2020.

Long-term debt (net of current portion) as of Sep 30, 2021 was $12,774 million, down from $14,261 million as of Dec 31, 2020.

Net cash inflow from operating activities as of Sep 30, 2021 was $2,125 million compared with $2,703 million as of Sep 30, 2020.

2021 Guidance

Northrop Grumman has updated its 2021 revenue and earnings guidance.

The company currently expects to generate revenues worth $36 billion compared with its earlier guidance range of $35.80-$36.20 billion. The Zacks Consensus Estimate of $36.20 billion lies above the company’s guided range.

The company’s 2021 earnings are currently projected to be in the range of $25.20-$25.60 per share, up from its prior guided range of $24.40-$24.80. The Zacks Consensus Estimate of $24.91 per share is lower than the guided range.

The company continues to expect its adjusted free cash flow to be in the range of $2.20-$2.50 billion in 2021.

Zacks Rank

Northrop Grumman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Hexcel Corporation HXL reported third-quarter 2021 adjusted earnings of 13 cents per share, which exceeded the Zacks Consensus Estimate of 8 cents by 62.5%.

Raytheon Technologies Corporation’s RTX third-quarter 2021 adjusted earnings per share (EPS) of $1.26 outpaced the Zacks Consensus Estimate of $1.07 by 17.8%.

Lockheed Martin Corporation LMT reported third-quarter 2021 adjusted earnings of $6.66 per share, which surpassed the Zacks Consensus Estimate of $1.96 by a whopping 239.8%.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

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In the last reported quarter, the company delivered a negative earnings surprise of 5.05%. Edison International has a trailing four-quarter earnings surprise of 2.91%, on average.

Factors to Note

During most part of the third quarter, the company’s service territories witnessed warmer than normal temperatures. This is likely to have boosted electricity demand for cooling purposes among the company’s customers. This, in turn, must have favorably contributed to the to-be-reported quarter's top-line performance.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $4.77 billion, suggesting growth of 2.8% from the year-ago quarter.

Some parts of Edison International’s service territories saw some wildfire events in the third quarter. This is likely to have pushed the company’s wildfire mitigation expenses. This might have weighed onits third-quarter bottomline.

Meanwhile, favorable contributions from FERC-related and CPUC-related revenues are likely to have contributed to the to-be-reported quarter’s performance.

The Zacks Consensus Estimate for third-quarter earningsis pegged at $1.74 per share, indicating an improvement of 4.2% from the prior-year reported figure.

Edison International Price and EPS Surprise

Edison International price-eps-surprise | Edison International Quote

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Edison International this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is the case here as you will see.

Earnings ESP:The company’s Earnings ESP is +1.49%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Edison International currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are three other Utilities players you may want to consider, as these too have the right combination of elements to post an earnings beat this season:

AES CorporationAES has an Earnings ESP of +3.53% and a Zacks Rank #3.

Pinnacle West Capital Corporation PNW has an Earnings ESP of +0.30% and a Zacks Rank #3.

TransAltaCorporation TAC has an Earnings ESP of +12.50% and a Zacks Rank #3.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Including acquisition- and divestiture-related costs, restructuring costs, income and losses from investments in equity securities and certain other items, earnings per share were $1.80 per share, up 96% on a reported basis (93% on a constant currency basis).

Revenues rose 20% year over year (19% on a constant currency basis) to $13.2 billion driven by increased demand for its cancer drugs and vaccines and higher sales of Animal health products. Sales beat the Zacks Consensus Estimate of $12.421 billion.

Quarter in Detail

The Pharmaceutical segment generated revenues of $11.5 billion, up 18% year over year. Excluding Fx impact, sales rose 17% on higher sales of oncology drugs and vaccines.

Keytruda, the largest product in Merck’s portfolio, generated sales of $4.53 billion in the quarter, up 21% (excluding Fx impact) year over year. Keytruda sales have been gaining particularly from continued strong momentum in lung cancer indications and continued uptake in newer indications.

Alliance revenues from Lynparza and Lenvima also boosted oncology sales in the quarter. Merck has a deal with British pharma giant, AstraZeneca AZN to co-develop and commercialize PARP inhibitor, Lynparza and a similar one with Japan’s Eisai for its tyrosine kinase inhibitor, Lenvima.

Lynparza alliance revenues increased 25% year over year to $246 million in the quarter. Lenvima alliance revenues were $188 million, up 30% from the year-ago period.

In the hospital specialty portfolio, the Bridion injection generated sales of $369 million in the quarter, up 15% year over year, reflecting the ongoing recovery from the pandemic.

Merck witnessed continued recovery in its vaccines portfolio due to the return to a more normal level of wellness visits.

Sales of the HPV vaccine, Gardasil/Gardasil 9, rose 63% year over year to $1.99 billion. Sales rose due to strong underlying demand in the United States (due to favorable timing of public sector purchases) and China (increased supply).

Proquad, M-M-R II and Varivax vaccines recorded combined sales of $661 million, up 14% year over year. Sales of the rotavirus vaccine, Rotateq rose 7% to $227 million. Sales of its pneumococcal vaccine, Pneumovax 23 vaccine declined 26% year over year to $277 million in the third quarter due to lower demand in the United States, following prioritization of COVID-19 vaccination. Merck gained FDA approval for its 15-valent pneumococcal conjugate vaccine, Vaxneuvance, in July.

Januvia/Janumet (diabetes) franchise sales were flat year over year at $1.34 billion.

Merck’s Animal Health segment generated revenues of $1.42 billion, up 16% from the year-ago quarter. Excluding the impact of currency, sales rose 14%, helped by growth across geographies and species.

Margin Discussion

Adjusted gross margin was 76.8%, up 30 basis points from the year-ago quarter due to the favorable impact of product mix, which offset higher manufacturing costs.

Selling, general and administrative (SG&A) expenses were $2.3 billion in the reported quarter, up 12% year over year due to higher promotion and administrative costs. Research and development (R&D) spending rose 11% to $2.5 billion due to higher clinical development costs for cancer and COVID candidates and increased investment in discovery research and early drug development.

2021 Guidance

Merck raised its previously issued earnings and sales guidance for 2021. Merck expects revenues to be in the range of $47.4 billion to $47.9 billion in 2021 compared with $46.4 billion to $47.4 billion expected previously. The guidance range indicates growth in the range of 14% to 15% (previously 12% to 14%) and includes a positive impact from foreign exchange of 1.5%.

Adjusted earnings per share are expected to be between $5.65 and $5.70, up from the previous expectation of $5.47 and $5.57. The earnings guidance includes a positive impact from foreign exchange of approximately 2%.

Adjusted operating costs are expected to be higher than 2020 by a high-single-digit rate.

Our Take

Merck’s third-quarter results were better than expected as it beat estimates for both earnings and sales. An ongoing recovery from the pandemic and strong global underlying demand across its business led to improved sales in the quarter.

Though Merck expects some negative effects from the pandemic on its business performance to persist, the demand trends are overall improving as the company believes that global health systems and people have largely adapted to the effects of the pandemic. Merck continues to expect COVID-related business disruptions to hurt sales by less than 3%.

In response to the better-than-expected results and the guidance increase, shares were up around 2.1% in pre-market trading. Merck’s stock has declined 0.3% this year so far against an increase of 12.7% for the industry.

Image Source: Zacks Investment Research

Merck also made meaningful progress in its pipeline in the quarter, including positive phase III results for its and partner Ridgeback Biotherapeutics’ oral antiviral medicine for treating mild-to-moderate COVID-19, molnupiravir. The companies have applied for Emergency Use Authorization (“EUA”) from the FDA for molnupiravir.

Merck, last month, announced the proposed acquisition of Acceleron Pharma XLRN for $180 per share in cash or an approximate total equity value of $11.5 billion. The deal, if successful, will add Acceleron’s promising phase III pipeline candidate, sotatercept, which is being evaluated for the treatment of pulmonary arterial hypertension, thereby strengthening Merck’s cardiovascular portfolio 

Merck currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Merck & Co., Inc. Price, Consensus and EPS Surprise

Merck & Co., Inc. price-consensus-eps-surprise-chart | Merck & Co., Inc. Quote

A better-ranked drugmaker is Vertex Pharmaceuticals VRTX, which carries a Zacks Rank of 2 (Buy). Its earnings estimate for 2021 has gone up from $12.37 to $12.43 over the past 60 days while that for 2022 has increased from $13.13 to $13.16 per share.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The year-over-year decline in the bottom line can be attributed to higher operating expenses.

Operational Performance

For the quarter under review, CMS Energy’s operating revenues were $1,725 million, which exceeded the Zacks Consensus Estimate of $1,605 million by 7.5%. The top line also improved 14.5% on a year-over-year basis.

CMS Energy’s interest charges were $125 million, down 3.9% from the year-ago period.

Financial Condition

CMS Energy had cash and cash equivalents of $102 million as of Sep 30, 2021, up from $32 million at the end of 2020.

As of Sep 30, 2021, total debt, capital leases and financing obligations (excluding securitization debt) were $12,499 million, up from $12,166 million at the end of 2020.

During the first nine months of 2021, the company generated cash from operating activities worth $1,483 million compared with $1,144 million in the first nine months of 2020.

2021 Guidance

CMS Energy tightened its 2021 adjusted earnings per share guidance range to $2.63-$2.65 from the prior band of $2.61-$2.65. The Zacks Consensus Estimate for the company’s 2021 earnings is currently pegged at $2.68, higher than the company’s newly guided range.

Zacks Rank

CMS Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

NextEra Energy, Inc. NEE reported third-quarter 2021 adjusted earnings of 75 cents per share, which beat the Zacks Consensus Estimate of 72 cents by 4.2%.

Avangrid, Inc. AGR reported third-quarter 2021 earnings of 34 cents per share, beating the Zacks Consensus Estimate of 30 cents by 13.3%.

DTE Energy Company DTE reported third-quarter 2021 operating earnings per share of $1.72, which missed the Zacks Consensus Estimate of $1.83 by 6%. The bottom line also declined 19.6% from the year-ago quarter’s $2.14.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The company reported GAAP earnings of $1.59 per share compared with the year-ago quarter’s $1.51.

Total Revenues

American Electric’s third-quarter revenues of $4.60 billion beat the Zacks Consensus Estimate of $4.44 billion by 3.6%.

The reported figure improved 12.2% from the year-ago quarter’s $4.10 billion.

American Electric Power Company, Inc. Price, Consensus and EPS Surprise

American Electric Power Company, Inc. price-consensus-eps-surprise-chart | American Electric Power Company, Inc. Quote

Segmental Performance

Vertically Integrated Utility Operations: Earnings in the quarter increased to $437.7 million from $393.5 million in the year-ago quarter.

Transmission & Distribution Utilities: Earnings were $155.9 million, up from $147.4 million in the year-ago quarter.

AEP Transmission Holdco:This segment generated earnings of $166.8 million, up from $138.3 million in the third quarter of 2020.

Generation and Marketing:Adjusted earnings were $21.4 million, down from $63.2 million in the year-ago quarter.

Corporate & Other:Losses were $65.1 million compared with losses of $47.3 million in the year-ago quarter.

Quarterly Highlights

Adjusted income was $716.7 million, down 1.6% from $728.2 million in the year-ago quarter.

Financial Update

As of Sep 30, 2021, American Electric had cash and cash equivalents of $1,372.7 million compared with $392.7 million as of Dec 31, 2020.

Long-term debt was $32.06 billion as of Sep 30, 2021, compared with $29 billion as of Dec 31, 2020.

Cash flow from operations was $2,973 million at the end of Sep 30, 2021, compared with $2,922 million as of Sep 30, 2020.

2021 Guidance

American Electric narrowed its 2021 operating earnings guidance tothe range of $4.65-$4.75 per share, from the prior guided range of $4.55-$4.75. The Zacks Consensus Estimate for 2021 earnings,which ispegged at $4.69 per share, lies just below the mid-point of the new guidance range.

Zacks Rank

American Electric currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Utility Releases

Avangrid, Inc (AGR) third-quarter 2021 adjusted earnings per share (EPS) of 34 cents per share outpaced the Zacks Consensus Estimate of 30 cents by 13.3%.

DTE Energy Company (DTE) reported third-quarter 2021 adjusted earnings of $1.72 per share, which missed the Zacks Consensus Estimate of $1.83 by 6%.

NextEra Energy, Inc (NEE) reported third-quarter 2021 adjusted earnings of 75 cents per share, which exceeded the Zacks Consensus Estimate of 72 cents by 4.2%.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

The company beat earnings expectations in three of the last four quarters and missed in one, the average surprise being a negative 10.15%. In the last reported quarter, the company beat earnings estimates by 10.96%.

What Our Model Predicts

Our proven model predicts an earnings beat for Incyte this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Incyte is +16.22% as the Zacks Consensus Estimate is pegged at 74 cents and the Most Accurate Estimate is pegged at 86 cents.

Zacks Rank: The company currently carries a Zacks Rank #3.

Factors to Note

Incyte primarily derives product revenues from sales of lead drug, Jakafi, in the United States and Iclusig. Patient demand for Jakafi, a first-in-class JAK1/JAK2 inhibitor, in all approved indications (polycythemiavera, myelofibrosis and refractory acute graft-versus-host disease [GVHD]) increased in the second quarter after a soft first quarter.  The trend has most likely improved further in the third quarter as patients resume visits to the doctors. Jakafi sales were up 12% in the previous quarter and the third quarter is likely to have witnessed a sequential increase. The Zacks Consensus Estimate for Jakafi sales stands at $558 million.

The company also earns product royalty revenues from Novartis AG NVS for the commercialization of Jakafi in ex-U.S. markets. Novartis recorded a 26% increase in Jakavi sales in the third quarter. Hence, Incyte is likely to have received higher royalties in the quarter.

We remind investors that while Jakafi sales and royalties are key catalysts for the company’s revenue growth, Iclusig sales and Olumiant royalties from Eli Lilly also contribute to the top line. Hence, these are likely to have aided the company’s revenues in the to-be-reported quarter. Net product revenues of Iclusig amounted to $28.2 million in the previous quarter and similar or higher levels of contribution are likely to have been witnessed by the company in the to-be-reported quarter. The Zacks Consensus Estimate for Iclusig sales stands at $27.3 million.

Olumiant product royalty revenues came in at $36 million in the second quarter, up 40% year over year, and similar levels of growth are likely to have boosted the top line in the to-be-reported quarter.

Incremental sales from newly approved drugs are likely to have boosted sales in the third quarter as well. Sales of Pemazyre (pemigatinib), a kinase inhibitor indicated for the treatment of adults with previously treated, unresectable, locally advanced or metastatic cholangiocarcinoma, came in at $17.9 million in the second quarter. The third quarter is likely to have witnessed a sequential increase.

Incyte also receives royalties from sales of Tabrecta (capmatinib) for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC). Its partner Novartis has exclusive worldwide development and commercialization rights to Tabrecta. Royalties from the same came in at $2.5 million in the second quarter.

Operating expenses are likely to have increased due to a rise in R&D expenses and selling, general and administrative expenses.

Key Pipeline Updates

Apart from the top and bottom-line numbers, we expect investors to focus on the company’s pipeline updates.

The FDA recently approved a label expansion of Jakafi (ruxolitinib). The drug can now be used for the treatment of chronic graft-versus-host disease (GVHD) after the failure of one or two lines of systemic therapy in adult and pediatric patients 12 years of age and older. The regulatory body also approved the cream formulation of ruxolitinib for the treatment of mild to moderate atopic dermatitis (AD). Ruxolitinib cream has been approved under the brand name Opzelura for the short-term and non-continuous chronic treatment of mild to moderate AD in non-immunocompromised patients 12 years of age and older. Further updates on the same are awaited in the call.

Share Price Performance

Incyte’s stock has lost 25.3% in the year so far compared with the industry’s 8.1% decline.

Image Source: Zacks Investment Research

Other Stocks to Consider

Here are a few other stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Regeneron Pharmaceuticals REGN has an Earnings ESP of +8.78% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead GILD has an Earnings ESP of +0.75% and a Zacks Rank #3.



 

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Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Behind the Headlines

Gross premiums written increased 19.6% year over year to $3.2 billion. Net written premiums improved 10.8% year over year to $2.1 billion, primarily fueled by higher premiums written across its Insurance, Reinsurance and Mortgage segments.

Net investment income decreased 31.4% year over year to $88.2 million.

Operating revenues of $2 billion increased 5.9% year over year.

Total expenses of $1.8 billion decreased 0.05% year over year due to lower interest expenses. It was offset by higher losses and loss adjustment expenses, acquisition expenses, other operating expenses, and corporate expenses.

Pre-tax current accident year catastrophic losses, net of reinsurance and reinstatement premiums were $335.9 million, which increased 65.2% year over year. This surge in catastrophic losses was primarily on account of Hurricane Ida, European floods and other global events.

Arch Capital’s underwriting income fell 79.9% year over year to $173.4 million. The combined ratio improved 350 basis points (bps) to 91.4%.

Segment Results

Insurance: Gross premiums written increased 32.4% year over year to $1.6 billion, while net premiums written improved 40% year over year to $1.1 billion. This growth can primarily be attributed to increases in most lines of business, due in part to rate increases, new business opportunities and growth in existing accounts.

Underwriting loss of $21.3 million was narrower than the year-ago quarter’s loss of $31.2 million. The combined ratio improved 200 bps to 102.2%.

Reinsurance: Gross premiums written increased 24.6% year over year to $1.2 billion, while net premiums written improved 2.8% year over year to $621.4 million. The growth can be attributed to increases in most lines of business, due in part to new business opportunities and rate increases.

Underwriting loss was $38.9 million against an income of $5.5 million in the year-ago quarter. The combined ratio deteriorated 720 bps year over year to 106.2%.

Mortgage: Gross premiums written increased 4.2% year over year to $360.9 million, while net premiums written inched up 0.8% year over year to $300.7 million. The increase in gross premiums written can be attributed to growth in Australian single premium mortgage insurance as a result of the previously disclosed acquisition of Westpac Lenders Mortgage Insurance Limited.

Underwriting income increased 79.3% year over year to $234 million. The combined ratio improved 3800 bps year over year to 26.2%.

Financial Update

Arch Capital exited the third quarter with cash of $1.13 billion, up 16.5% year over year. Debt was $2.7 billion as of Sep 30, 2021, inched up 0.03% year over year.

As of Sep 30, 2021, book value per share was $32.43, up 12.8% year over year. Annualized operating return on average common equity was 9.3% in the third quarter, up 510 bps.

For the first nine months of 2021, net cash provided by operating activities was $2.6 billion, up 12.7% year over year.

The company bought back 9.7 million shares for $386.9 million in the reported quarter.

Zacks Rank

Arch Capital currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Of the insurance industry players, which have reported third-quarter results so far, earnings of W. R. Berkley Corporation WRB, Chubb Limited CB and Selective Insurance Group, Inc. SIGI beat the respective Zacks Consensus Estimate.

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Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Q3 Estimates

For the quarter to be reported, the Zacks Consensus Estimate for a loss per share has narrowed to 42 cents over the past seven days from 47 cents per share. In the prior-year quarter, the company had reported an adjusted loss per share of $5.70. The consensus mark for revenues is pegged at $768.6 million, compared with the prior-year reported figure of $119.5 million.

Factors to Note

The company’s third-quarter 2021 performance is likely to have benefited from a sharp increase in global attendance. The impact of the increasingly favorable environment for movie-going and accelerated vaccinations in the United States, Europe and the Middle East is expected to have aided the company’s performance in the quarter to be reported. The company has been witnessing massive pent-up demand for movies. The Zacks Consensus Estimate for Admissions revenues is pegged at $528 million, compared with $63 million reported in the prior-year quarter.

The company may have gained from an increase in average ticket pricing. During second-quarter 2021, average ticket pricing was up more than 15%, and food and beverage revenues per patron increased approximately 42%, compared with the second quarter of 2019.

AMC Entertainment has been undertaking comprehensive health and sanitation programs, including enhanced cleaning procedures and upgraded air filtration efforts to ensure maximum safety for guests. These efforts entail high costs, which are likely to have weighed on the second-quarter performance.

Monthly cash burns may have hurt the company’s to-be-reported quarter’s bottom line. During second-quarter 2021, cash burn was approximately $85 million per month. Quarterly cash rent payments are likely to have been higher in third-quarter 2021. The cash rent in the second half of 2021 is expected to be higher. The company has to pay some rent deferred from prior periods.

What Our Model Says

Our proven model predicts an earnings beat for AMC Entertainment this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: AMC Entertainment has an Earnings ESP of +6.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks With Favorable Combination

Here are some other companies in the Zacks Consumer Discretionary sector, which according to our model, also have the right combination of elements to post an earnings beat.

Golden Entertainment, Inc. GDEN has a Zacks Rank #1 and an Earnings ESP of +51.95%.

Choice Hotels International, Inc. CHH has a Zacks Rank #2 and an Earnings ESP of +4.04%.

Accel Entertainment, Inc. ACEL has a Zacks Rank #2 and an Earnings ESP of +20.00%.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Let's check out how things have shaped up for Verisk prior to the announcement:

Q3 Expectations

The Zacks Consensus Estimate for Verisk’s third-quarter 2021 revenues stands at $754.44 million, indicating growth of 7.4% from the year-ago reported figure.

The consensus estimate for Insurance segment revenues is pegged at $547 million, indicating growth of 9.6% from the prior-year reported figure. Within the segment, underwriting and rating revenues are likely to have benefited from an annual increase in prices derived from continued enhancements of the solutions’ contents within the industry-standard insurance programs, sale of expanded solutions to existing customers in commercial and personal lines, and contributions from catastrophe-modeling services and international software solutions. Claims revenues are likely to have been aided by repair cost-estimating solutions revenues and claims analytics revenues.

The consensus mark for Energy and Specialized Markets segment revenues is pegged at $173 million, indicating 5.5% growth from the year-ago reported figure. The segment is expected to have benefited from contributions from consulting, and environmental health and safety service revenues.

The consensus estimate for Financial Services segment revenues is pegged at $36.59 million, indicating year-over-year decline of 9.2%. The segment is expected to have been weighed down by certain contract transitions, projects that did not reoccur and lower bankruptcy volumes.

Verisk’s bottom line is likely to have benefited from organic growth in the business, contributions from acquisitions and lower average share count. The Zacks Consensus Estimate for earnings in the to-be-reported quarter is pegged at $1.37 per share, indicating growth of 3.8% from the year-ago quarter’s reported figure.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Verisk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Verisk has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks to Consider

Here are a few stocks from the broader Zacks Business Services sector that investors may consider, as our model shows that these have the right combination of elements to beat on third-quarter 2021 earnings:

Avis Budget CAR has an Earnings ESP of +18.16% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Opendoor Technologies OPEN has an Earnings ESP of +38.89% and a Zacks Rank #2.

SoFi Technologies SOFI has an Earnings ESP of +64.71% and a Zacks Rank #3.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly. 

Operational Update 

Total operating revenues in the quarter under review were $1.8 billion, up 9.5% year over year. This improvement was driven by higher premiums earned, and an increase in investment income and other revenues. The top line beat the Zacks Consensus Estimate by 11.8%.

Net written premiums increased 10% year over year to $1.5 billion, owing to premium growth initiatives and price increases. Investment income improved 7.2% year over year to $179 million, driven by an increase in stock portfolio dividends and bond interest income.

Total benefits and expenses of Cincinnati Financial decreased 0.7% year over year to $1.6 billion, primarily due to lower insurance loss and contract holders’ benefits.

In its property & casualty (P&C) insurance business, Cincinnati Financial witnessed an underwriting profit of $121 million against an underwriting loss of $51 million in the year-earlier period.

Combined ratio — a measure of underwriting profitability — improved 1100 basis points (bps) year over year to 92.6%.

Quarterly Segment Update

Commercial Lines Insurance: Total revenues of $931 million grew 8% year over year. This upside was primarily driven by solid premiums earned. The segment reported an underwriting profit of $182 million against an underwriting loss of $20 million in the prior-year period.  The combined ratio improved 2180 bps year over year to 80.6%.

Personal Lines Insurance: Total revenues of $389 million rose 6% year over year owing to 6% increase in premiums earned. The segment reported an underwriting loss of $10 million, wider than the year-ago loss of $2 million. The combined ratio deteriorated 200 bps year over year to 102.7%.

Excess and Surplus Lines Insurance: Total revenues of $106 million rose 29% year over year, aided by 28% higher earned premiums. The segment’s underwriting profit dropped 36.4% year over year to $7 million. The combined ratio deteriorated 740 bps year over year to 94.1%.

Life Insurance: Total revenues were $120 million, up 5% year over year, aided by 1% higher earned premiums and 5% increased investment income. Total benefits and expenses increased 14% year over year to $105 million due to higher contract holders’ benefits.

Financial Update

As of Sep 30, 2021, Cincinnati Financial had total assets worth $29.9 billion, up 8.6% from the level at 2020 end. Total debt amounted to $848 million as of Sep 30, 2021, up 0.7% from the 2020-end level.

Cincinnati Financial’s debt-to-capital ratio was 6.7% as of Sep 30, 2021, down 50 bps from end of 2020.

As of Sep 30, 2021, Cincinnati Financial’s book value per share was $73.49, up 10% from 2020 end.

Zacks Rank

Cincinnati Financial currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Of the insurance industry players, which have reported third-quarter results so far, earnings of Arch Capital Group Ltd. ACGL, Chubb Limited CB and Selective Insurance Group, Inc. SIGI beat the respective Zacks Consensus Estimate.

Bitcoin, Like the Internet Itself, Could Change Everything

Blockchain and cryptocurrency has sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.

Zacks’ has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.