5 major US earnings to explore from this week

The ongoing year hasn’t been easy on the market, with all three benchmark US indices experiencing a fall into the bear market territory. The havoc pressure due to macroeconomic events like inflation, rising policy rates, and other related factors have weighed on the market sentiments.

However, investors are keeping a close watch on the earnings season for insights into the impact of the economic pressures on their operations. The earnings season has been mixed, while some positive earnings have helped raise the traders’ spirits.

On the other hand, the midterm polls have also played a crucial part in recent weeks, which have also seemed to have helped some gains in the market. The Republicans’ control over the House of Representatives has appeared to be a positive catalyst for the overall market.

The market participants expect that the split government, with President Joe Biden still in his chair for the rest two years of his tenure, would act as a positive event for the market. Historically a split government has proved to be a boon for the equity market.

Although past performance doesn’t guarantee future performance, a split government generally triggers a political gridlock. A political gridlock raises the investors’ sentiment typically, as it indicates that there won’t be any massive changes to policies in the coming times.

While President Joe Biden would be holding his chair in the White House with his veto power, the republicans are likely to create obstacles on the democrats’ agendas. To be precise, the difference in political views would delay any major agendas in the coming times.

So, let’s look at some of the major earnings from this week, which include Agilent Technologies, Inc. (NYSE: A), Medtronic plc. (NYSE: MDT), Analog Devices, Inc. (NASDAQ: ADI), Vmware, Inc. (NYSE: VMW), and Deere & Company (NYSE: DE), and see how they have performed in recent quarters.

Agilent Technologies, Inc. (NYSE: A)

The consumer electronics firm Agilent Technologies had a dividend yield of 0.54 per cent. The stock of the life sciences firm, which offers instruments, software, and related services for the laboratory workflow, traded flat on an annual basis and fell over two per cent in 2022.

The consumer electronics provider’s stock gained about 28 per cent in the running quarter after closing at US$ 155.35 on November 23. The company posted its latest quarterly earnings results this Monday.

In the final quarter of fiscal 2022, Agilent Technologies’ reported revenue grew 11 per cent YoY to US$ 1.85 billion, and its GAAP net income declined 15 per cent YoY to US$ 368 million with an EPS of US$ 1.23 apiece.

Meanwhile, it had raised its quarterly dividend by seven per cent quarter-over-quarter to 22.5 cents per share on its common stock, which will be paid on January 25, next year.

Medtronic plc. (NYSE: MDT)

The global medical technology and solutions provider, Medtronic plc’s dividend yield is 3.49 per cent. The stock of the Dublin, Ireland-based medical device firm fell over 23 per cent YTD and around 30 per cent YoY.

The MDT stock traded at around three per cent higher from its 52-week low of US$ 76.6 noted on November 22 this year. The global healthcare firm reported its earnings results on November 22.

In Q2 FY23, Medtronic plc’s revenue fell three per cent YoY on a reported basis to US$ 7.6 billion, and its diluted EPS plunged 67 per cent YoY to US$ 0.32 apiece. However, the company’s revenue grew two per cent YoY in the second quarter.

Analog Devices, Inc. (NASDAQ: ADI)

The multinational semiconductor firm specializing in data conversion and other related services holds a dividend yield of 1.8 per cent. The company’s stock, which focuses on signal processing, power management, and other related services, fell over three per cent YTD and around seven per cent YoY.

The ADI stock grew over 21 per cent through its close on November 23. The Wilmington-based semiconductor firm reported its final quarterly earnings results on November 22, before the market opened.

In Q4 FY22, Analog Devices Inc’s revenue grew sequentially in all markets and totaled US$ 3.25 billion, up 39 per cent YoY. Its annual revenue totaled US$ 12 billion, an increase of 64 per cent on an annual basis.

The semiconductor firm’s diluted EPS grew 1,038 per cent YoY to US$ 1.82 apiece in Q4 FY22, and 52 per cent YoY to US$ 5.25 apiece in fiscal 2022.

Vmware, Inc. (NYSE: VMW)

The cloud computing and virtualization technology firm, Vmware Inc., holds a market cap of US$ 50.48 billion. The company’s stock, which claims to be the first firm in successfully virtualizing commercial x86 architecture, grew three per cent YTD and about two per cent YoY.

Vmware Inc’s revenue grew one per cent YoY to US$ 3.21 billion in Q3 FY22, and its diluted EPS fell 43 per cent YoY to US$ 0.54 apiece. The company’s subscription and SaaS revenue rose 20 per cent YoY to US$ 988 million in the quarter.

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Deere & Company (NYSE: DE)

The industrial and manufacturing firm, Deere & Company reported its Q4 and fiscal 2022 earnings on November 23. The DE stock noted a gain of 27 per cent YTD and about 25 per cent YoY.

In the final quarter, Deere & Company’s sales and revenue rose 37 per cent YoY to US$ 15.53 billion, and its net income surged 75 per cent YoY to US$ 2.24 billion.

Bottom line:

The US indices have witnessed one of their worst performance in years through the year due to the economic headwinds and geopolitical turmoil so far. In addition, given the recent market uncertainties, the market participants have also stayed on the sideline.

However, the current set of economic metrics, which includes the consumer price index, producer price index, retail sales, etc., came in better than the market expectations. The metrics have also lifted the market spirits.

The recent CPI data showed that the inflation had cooled off in the prior month, suggesting that the higher rates have taken effect. This has also allayed some concerns of the investors over more hawkish moves by the investors in the coming times.

In addition, the retail sales data showed that the consumers had maintained stable spending in the prior month, despite the economic challenges daunting the sentiments.

The trading scenario is still highly volatile, for which investors should tread cautiously with their spending plans.

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