Going into the close on Wednesday, investors were enjoying a solid earnings season, which lends credence to the idea of a strong ramp of growth for the rest of the year.
4Q 2019 Earnings Season
410 companies reported:
Revenue
- 65% Beat
- 35% Missed
- 5.1% Blended Gain
- 6.3% Ex-Energy
Total: $2,962,100,000,000
Best Sectors
- 83% Health Care Beat
- 80% Technology Beat
Earnings
- 71% Beat
- 19% Missed
- 3.2% Blended Gain
- 6.1% Ex-Energy
Total: $345,500,000,000
Best Sector
- 85% Technology Beat
After the close, earnings results from various companies and industries were posted:
- (PER) Permian Percolating
Pioneer Natural Resources (PXD) posted strong results the same day rival Concho Resources (CXO) led oil names higher, and after posting strong results:
- Beat on Revenue
- Beat on Earnings +$0.26
- Raised Quarterly Dividend
The company says it has the best performing wells in the Permian Basin (PBT), pointing to $384 million in free cash flow management and raising its dividend to $0.55, +185%. Last quarter, the company returned $780 million to shareholders via dividend payouts and stock buybacks.
Other Names Climbing Off the Canvas
Avis Budget Group (CAR)
The company posted record results driven by strong revenue, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the Americas. Those numbers are a result of 26,509,000 rental days, +8% from one year ago.
Stamps.com (STMP)
On February 22, 2019, the company did the unthinkable when it kicked the U.S. Postal Service to the curb, saying it needed to shed the exclusive relationship to work with other carriers, including the United Parcel Service (UPS), FedEx (FDX), and Amazon (AMZN). The news sent the stock down 50% in a single session. Today, it will get a big chunk of that back.
Zillow Group (ZG), you must salute the company CEO
On February 21, 2019, management announced Zillow 2.0. At that point, the company started to flip houses. In many ways, it made sense that the company with all the great information would be well-positioned to take advantage, but house flipping didn’t make Wall Street happy…until last night.
Zillow posted record revenue of $943.9 million, +158% from one year ago, driven by its Home Division with $603.2 million in revenue, +52%. Mobile traffic on Apps and websites climbed to 173 million, average monthly users +10%, and the company finished the quarter with $2.4 billion in cash.
House Flipping
- Bought 1,787
- Sold 1,902
- Balance Sheet 2,707
Portfolio Approach
We put money to work in our model portfolio, which leaves with little cash. We are lowering Cash to 1 and increasing Technology to 3.
Today’s Session
Signs of Manufacturing Rebound Continues
How will your firm’s total production for the first quarter of 2020 compare with that of the last quarter of 2019?
% of firms expecting an increase: 62.0
If you expect to increase production in the next quarter, by what means will this be accomplished? | % of firms |
Hiring additional workers | 25.0 |
Increasing work hours of current staff, without hiring additional workers | 33.3 |
Increasing productivity of current staff, without hiring additional workers | 36.1 |
Other | 5.6 |
- General Business 17 from 2.4
- New Orders 18.2 from 11.1
- Shipments 23.4 from 15.4
- Employees 19.3 from 16.8