Jobless Claims, Q1 Earnings Steady & Positive

Thursday, April 19, 2018

Considering how many game-changing headlines we’ve seen so far in 2018 — from inflation/interest rate fears to geopolitical hornets nests to Washington DC soap operas — this has been a welcome week for the stock markets. Just think if we’d have had some seasonably appropriate weather — we’d be on Cloud 9 right now! And this relative calm in a sea of turbulence continues ahead of the opening bell this morning, with Initial Jobless Claims and new Q1 earnings results hitting the tape.

Initial Jobless Claims remained steady at 232K last week, 1000 claims fewer than the previous week and remaining solidly within the long-term range of 225K-250K which is illustrative of a very strong (and continually tightening) labor market. Aside from dips below even these very robust figures a month or so ago, and spikes into higher jobless claims territory for a short time following last summer’s massive hurricanes, we have enjoyed an historically strong and steady U.S. employment situation for several years now. Continuing claims reached 1.863 million in the week, another very healthy sign.

Q1 earnings results continue strong and steady, as well. While we’re not seeing any of the biggest companies on Wall Street reporting today, such as the FANG stocks (most of which start next week; Netflix (NASDAQ:NFLX) posted positive surprises Monday), we do have a number of companies that have registered new figures, and almost all better than expected:

Zacks Rank #2 (Buy)-rated W.W. Grainger (NYSE:GWW) posted a heft earnings beat, reporting $4.18 per share vs. $3.41 expected. Revenues also surpassed expectations, $2.77 billion vs. $2.71 billion in the Zacks consensus. The company also raised sales guidance for full-year 2018 from 3-7% previously to 5-8% today, to $14.30-15.30 per share. Shares, as a result, are trading up 7% in today’s pre-market. For more on GWW’s earnings, click here.

Two Wall Street banks have also brought forth Q1 results: BB&T (NYSE:BBT) and Bank of New York-Mellon (NYSE:BK) . Both Zacks Rank #3 (Hold)-rated firms beat on both top and bottom lines, with BK posting the wider positive margins: $1.10 per share on $4.18 billion, ahead of the 97 cents and $4.05 billion anticipated, up 33% and 9% year over year, respectively. BBT beat by 5 cents on the bottom line to 97 cents per share on revenues that eked out expectations of $2.83 billion.
For more on BBT’s earnings, click here.
For more on BK’s earnings, click here.

Among still others, tobacco major Philip Morris (NYSE:PM) topped earnings estimates by posting an even $1.00 per share in the quarter, above the 88 cents expected and representing growth of 2% year over year. Yet revenues of $6,896 million fell beneath the Zacks consensus of $7,024 million, although year over year was still up 13.7%. Guidance is for full-year growth of 8-11%, higher than previously expected. For more on PM’s earnings, click here.

Mark Vickery
Senior Editor

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