The third-quarter earnings season is well underway, and companies are reporting their results on a daily basis. Many companies have already posted better-than-expected results, which has not only started the period off on a positive note but has also boosted market sentiment.
Among the companies that have impressed investors by raising their guidance are UnitedHealth (UNH), AT&T (T), and PPG Industries (PPG). When a company raises its outlook, it signifies various positive factors, such as increased demand, successful cost-saving efforts, or favorable market conditions.
Now, let’s take a closer look at what stood out in each company’s recent release:
Leading up to the quarterly report, UNH shares experienced a significant increase in value over the last month. While the stock cooled slightly after the earnings announcement, the company exceeded the Zacks Consensus EPS Estimate by 3.6% and reported a revenue surprise of 1%, showcasing year-over-year growth rates of 13% and 14%, respectively.
UnitedHealth’s growth can be attributed to the expansion of its offered services and Optum’s growth. As a result, UNH raised its FY23 adjusted net earnings outlook to a range of $24.85 – $25.00 per share. Moreover, the company returned over $11.5 billion to investors through dividends and share repurchases during the period. Notably, UNH has been consistently surpassing both Zacks Consensus EPS and Sales Estimates for three consecutive quarters.
T shares faced some negative price action in the summer after news surfaced about lead-covered cables left behind by the company. However, since hitting a bottom following the news, the stock has surged 17%. The recent favorable quarterly report has attracted more buyers to invest in AT&T.
In the latest earnings announcement, AT&T reported earnings of $0.64 per share, narrowly beating the Zacks Consensus EPS Estimate. Although slightly lower than the previous year’s figure, the company’s quarterly revenue reached $29.9 billion, representing a 1% year-over-year improvement driven by solid growth in 5G and fiber subscribers.
AT&T’s free cash flow also positively surprised, totaling $5.2 billion, a 33% increase from $3.9 billion. As a result, the company raised its full-year free cash flow guidance to approximately $16.5 billion, surpassing the previous view of $16 billion. Additionally, AT&T improved its adjusted EBITDA guidance, anticipating full-year growth of 4% compared to the previous expectation of 3%.
PPG Industries (PPG)
In the third quarter, PPG Industries achieved record sales and adjusted EPS. While quarterly revenue slightly exceeded expectations at $4.6 billion, adjusted EPS of $2.07 beat the consensus expectation by 6%. However, PPG’s share price has continued to decline by 16% over the past three months.
PPG raised its full-year 2023 adjusted EPS guidance, projecting adjusted earnings in the range of $7.58 – $7.64 per share. Both of the company’s segments demonstrated improved profitability during the quarter due to lower input costs and higher selling prices. It’s important to note that PPG’s shares are currently trading below their respective 50 and 200-day moving averages, indicating selling pressure. Given the negative reaction to the quarterly release, the stock might continue to face downward pressure.
The earnings season is currently in full swing, and investors have been delighted with the flurry of positive reports. UnitedHealth (UNH), AT&T (T), and PPG Industries (PPG) are among the companies that have released strong quarterly results, prompting them to raise their guidance. This demonstrates the potential for continued growth and success in the near future.
Disclaimer: The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.