Earnings Previews: Altria, Cameco, Caterpillar, McDonald's

The three major U.S. equity indexes closed higher on Monday after bouncing lower in the early going. The Dow Jones industrials ended the day up 1.34%, the S&P 500 closed 1.19% higher and the Nasdaq rose 0.86%. Nine of 11 sectors closed higher, led by health care (1.91%) and consumer staples (1.79%). Materials and real estate posted losses on the day of 0.62% and 0.09%, respectively.

Tuesday’s main bit of economic news comes after markets open. The Conference Board’s Consumer Confidence Index is expected to slip from September’s reading of 108 to 105.5.

The advance estimate (first of three) on third-quarter gross domestic product is due before markets open Thursday. Economists’ consensus estimate calls for a year-over-year increase of 2.3%. On Friday, the monthly report on personal consumption expenditures (PCE) will be released before U.S. markets open. Income is expected to rise by 0.3%, and core PCE inflation is forecast to rise by 0.4%. Both estimates match August readings.

The three major indexes opened mixed Tuesday morning, with the Dow trading lower and the Nasdaq and the S&P 500 trading higher.

After U.S. markets closed Monday, Cadence Design reported that earnings per share (EPS) and revenue came in above estimates. Fourth-quarter guidance met the low end of EPS expectations, while fiscal-year guidance came in above expectations. The stock traded down about 4% about 90 minutes after Tuesday’s opening bell.

Discover Financial missed the consensus EPS estimate but did beat on revenue. Loan totals were up 17% year over year and 6% sequentially. Total net charge-off rate was 1.71%, up 25 basis points year over year. Thirty-day delinquencies came in at 2.11%, up 63 basis points year over year and 35 basis points sequentially. Shares traded up more than 3%.

Range Resources also missed on EPS but beat on revenue estimates. The company stuck to its flat production target for the year and expects capital spending at around $480 million, the high end of its previously announced range. The stock traded up 0.7% Tuesday morning.

Before markets opened Tuesday morning, Coca-Cola beat estimates on both the top and bottom lines. Coke expects to deliver organic revenue growth of 14% to 15% for the full fiscal year. Shares traded up about 1.1%.

UPS reported better-than-expected EPS but missed the consensus revenue estimate. The company reaffirmed fiscal 2022 guidance and shares traded up about 2.5% early Tuesday.

General Electric missed the consensus earnings estimate but easily topped revenue expectations. The company issued in-line guidance and said the spin-off of the health care business is on track for the first week of January. Shares traded down 2.2%.

General Motors posted better-than-expected revenue but missed on EPS. Inventory is rising slightly, but the company said that the chip shortage is improving. Demand is strong for its full-size trucks. Shares traded up about 3.3%.

Valero Energy beat both top-line and bottom-line estimates, but investors expected more. Shares traded down by about 1.6%.

Alphabet, Enphase, Microsoft and Visa are also reporting after U.S. markets close Tuesday. Before U.S. markets open on Wednesday, Boeing, Bristol-Myers Squibb and Kraft Heinz will report quarterly results. Look for Antero Resources, EQT, Ford and Meta Platforms to post their results later on Wednesday.

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