Q4 Earnings Scorecard and Analyst Reports for Ford, Microsoft & United Technologies

Monday, January 30 2017

The Zacks Research Daily features the best output of our research team every day. In today's write-up, we are featuring analyst reports on 16 major stocks, including reports on Microsoft (MSFT), Ford (F) and United Technologies (UTX). These stock research reports have been hand-picked from the 70 or so reports published by our analyst team today. You can see all of today's research reports here >>

In addition to these stock research reports, we are also giving you a real-time scorecard of the ongoing Q4 earnings season. We take pride in closely monitoring each and every earnings report and presenting our analysis of emerging trends in the weekly Earnings Trends and Earnings Preview reports. Our latest Earnings Preview report is: Earnings Growth Returns, Will it Continue?

Q4 Earnings Scorecard : We are one-third into the Q4 earnings season, with results from 171 S&P 500 members, or 34.1% of the index's total membership, already out. More than 400 companies are on the docket to report quarterly results this week, including 106 S&P 500 members. By the end of next week, we will have seen Q4 results from 55% of S&P 500 members.

Total earnings for the 171 index members that have reported results already are up +6% on +3.1% higher revenues, with 64.3% beating EPS estimates and 54.4% beating revenue estimates. This is better earnings and revenue growth performance than we have seen from this group of 171 S&P 500 members in other recent periods, even after adjusting for the strong growth from the Finance sector. The proportion of companies beating EPS and revenue estimates, however, is tracking moderately below other recent periods.

Looking at Q4 as a whole, combining the actual results from the 171 index members with estimates from the still-to-come 329 companies, total earnings are expected to be up +5.3% from the same period last year on +4% higher revenues. This is the best earnings and revenue growth pace in the last 8 quarters. Importantly, estimates for the current period (2017 Q1) are holding up fairly well; they are coming down, but not at the pace as would typically expected. All of this should help add to confidence in market expectations for the current and following quarters when growth is expected to notably ramp up.

Buy rated Microsoft shares lagged the Zacks Tech sector through the fall, but have led the way over the last three months (up +9.8% versus +6%) on greater appreciation for the company's reorganization and repositioning which got reconfirmed by the company's impressive quarterly results last week. The Zacks analyst points to the company's continuing enterprise strength, benefits from the Office 365 subscription model, strong growth prospects of Azure and promising new products. The recent acquisition of artificial intelligence startup Maluuba is a big positive for the company given the growing demand for artificial intelligence techniques throughout the world. Further, the anticipated completion of the LinkedIn acquisition will boost Microsoft's presence in the social media market. All in all, the company has emerged as a leader in the cloud space that promises momentum on a number of fronts. (You can read the full research report on Microsoft here >> )

United Technologies shares have gained +7.3% over the last three months, higher than the +6.3% increase for the Zacks Conglomerates sector. The company's fourth-quarter 2016 results were mixed, with revenues beating expectations and earnings coming in-line. But the Zacks analyst likes the business mix and diversification which allows the company to deliver consistent earnings and dividend growth. The company is focused on revamping its aerospace unit to overhaul the organizational structure and accelerate inorganic growth through potential acquisition opportunities. On the flip side, the company remains exposed to a weak global macroeconomic backdrop and uncertainty about the Trump administration's trade policy. Other issues include exposure to market price volatility and availability risks related to raw materials. (You can read the full research report on United Technologies here >> )

Ford shares have underperformed the domestic auto manufacturing industry as well as GM over the last three months. Ford's adjusted earnings for the fourth quarter declined year-over-year and also came in under expectations. Losses in South America, Brexit-related concerns, frequent product recalls and rising structural expenses are some of the issues faced by the company. However, the positives for Ford include product launches, global expansion plans, efficient capital deployment, success of the One Ford plan, focus on autonomous vehicle development and a solid long-term outlook. (You can read the full research report on Ford here >> )

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Sheraz Mian

Director of Research

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here >>>

Today's Must Read

Microsoft (MSFT) Beats on Q2 Earnings, Revenue Estimates

United Technologies (UTX) Q4 Earnings In Sync, View Affirmed

Ford's (F) Q4 Earnings Miss Estimates, Decrease Y/Y

Featured Reports

Intel (INTC) Beats on Q4 Earnings; '17 View Lacks Shine

The Zacks analyst believes that Intel's full year 2017 guidance lacks shine as the higher capital expenditure on emerging markets sans revenue growth will impact profitability going ahead.

Southwest Airlines (LUV) Beats on Q4 Earnings & Revenues

The covering analyst is pleased by the company's outperformance in Q4. Increasing labor costs will, however, continue to hurt the bottom-line.

Rogers Communications (RCI) Q4 Earnings Meet, Revenues Rise

The Zacks analyst believes that Rogers Communications' efforts to remain the first wireless Canadian operator to offer Internet of Things services have driven its revenues.

eBay (EBAY) Misses Q4 Earnings, Holiday Sales Drive Revenues

The covering analyst believes that eBay's revenue growth in Q4 was driven by a strong holiday season and improvements in structured data, customer-to-customer (C2C) business and mobile platform.

Las Vegas Sands (LVS) Misses Q4 Earnings, Poised for Growth

Though the operating environment in Macao continues to improve, a complete rebound in the region will take time as is evident by lower-than-expected Q4 results, per the Zacks analyst.

Sherwin-Williams (SHW) Q4 Earnings Top, FY17 View Positive

While the company faces currency and input cost pressure, its focus on cost control, strength in its Paints Store unit and Valspar acquisition will boost its results in 2017.

Crown Castle (CCI) Beats on Earnings in Q4, Outllok Strong

The Zacks analyst believes that Crown Castle's extensive tower portfolio, continued acquisition of towers, demand for infrastructure and mobile broadband are its main positives.

New Upgrades

Robust Retail Momentum Drives Logitech's (LOGI) Huge Q3 Beat

The Zacks analyst thinks broad-based momentum across its retail markets drove Logitech's Q3 earnings beat. Going ahead, its growth prospects are backed by a strong product roster and excellent demand.

Raytheon (RTN) Beats on Q4 Earnings, Revenues Up Y/Y

The covering analyst thinks Raytheon's better-than-expected earnings were driven by favorable performance in Missile Systems, Space and Airborne Systems and Forcepoint segment.

Maxim (MXIM) Beats Q2 Earnings and Revenues

With Maxim delivering strong Q2 results, the Zacks analyst believes that the company's cost-reduction efforts and diversification strategy will help to improve the company's business profile going forward.

New Downgrades

Textron (TXT) Slips on Q4 Earnings Miss, Higher Expenses

The Zacks analyst thinks lower revenues, primarily from Bell and Aviation segments, drove Textron's weaker-than-expected fourth quarter earnings. Higher expenses also hurt growth.

Macro Woes Raise Concern for SAP SE (SAP) Despite Q4 Beat

Despite a solid earnings beat in Q4 on cloud business strength, seasonality in technology spending and weakness in key end-markets are expected to mar SAP's near-term prospects.

Wynn Resorts (WYNN) Still Affected by Macau's Performance

Despite company's efforts to boost traffic in Macau, it might take time to mark a turnaround in the region, per the Zacks analyst. Thus, both earnings and revenues from older locations suffered in Q4.

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United Technologies Corporation (UTX): Free Stock Analysis Report

Raytheon Company (RTN): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Intel Corporation (INTC): Free Stock Analysis Report

Ford Motor Company (F): Free Stock Analysis Report

eBay Inc. (EBAY): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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