The bulk of the Q2 earnings season is in the rearview mirror, with most S&P 500 companies already unveiling their quarterly results. The period has largely been better than feared, helping to inject some positive sentiment into the market.
Of course, there have been several notable surprises during the cycle, including those from DraftKings DKNG, Eli Lilly LLY, and Emerson Electric EMR. All three companies posted beat-and-raise quarters, owing to their successful operations.
For those interested in riding recent momentum, let’s take a closer look at each company’s quarterly print.
Eli Lilly
Eli Lilly’s Q2 results came in nicely above expectations, with the company exceeding the Zacks Consensus EPS Estimate by roughly 6.5% and delivering a 10% sales beat. Earnings saw year-over-year growth of nearly 70%, whereas revenue climbed 28% from the year-ago quarter.
In addition, the company raised its full-year 2023 guidance; Eli Lilly now expects annual revenue in the range of $33.4 – $33.9 billion (previously $31.2 – $31.7 billion) and adjusted earnings of $9.70 – $9.90 per share (previously $8.65 – $8.85).
The market reacted positively to the results and the guidance lift, with LLY shares soaring in pre-market trading.
The better-than-expected results were primarily driven by strength across its drugs portfolio, with its Mounjaro diabetes treatment providing a notable boost. Positive revisions from analysts haven’t yet hit the tape, but they’re sure to come in the following days, likely providing fuel for shares to continue climbing.
And for those interested in riding the momemntum, LLY shares provide a passive income stream; shares currently yield a respectable 1%, with the payout growing by 15% over the last five years.
DraftKings
DraftKings exceeded the Zacks Consensus EPS Estimate by nearly 30%, improving nicely from the year-ago quarter. Quarterly revenue totaled $874.9 million, 15% ahead of expectations and growing an impressive 88% year-over-year, driven by customer retention and improved engagement.
As shown below, the company’s revenue growth has been rapid.
The company’s continued strong performance led to a revenue guidance upgrade; DKNG raised the midpoint of its FY23 revenue guidance to $3.5 billion, up from $3.185 billion. The company also updated its FY23 Adjusted EBITDA midpoint guidance to -$205 million vs. the previous -$315 million expected.
Positive revisions have followed, with analysts raising their expectations across several timeframes post-earnings. The stock is a Zacks Rank #2 (Buy).
Unsurprisingly, the market reacted positively to the results, with DKNG shares seeing a boost post-earnings.
Emerson Electric
Emerson Electric beat the Zacks Consensus Estimate by nearly 19% and reported earnings of $1.29 per share, down modestly from the year-ago period. The company generated $3.9 billion in revenue, ahead of expectations and well lower than year-ago sales of $5.0 billion.
The company raised its FY23 guidance following the results, expecting net sales growth of 10.5% and free cash flow in a bracket of $2.2 – $2.3 billion. Like DKNG, Emerson has seen positive revisions following the release, with the stock sporting a Zacks Rank #2 (Buy).
And like those above, Emerson Electric shares saw buying pressure post-earnings, confirming the robust results.
With the bulk of the Q2 earnings cycle behind us, we’ve been met with many positive surprises. Of course, there have been some negative surprises as well, but the overall tone of the period has been calm.
And all three companies above – DraftKings DKNG, Eli Lilly LLY, and Emerson Electric EMR – all delivered better-than-expected results and lifted guidance.
For those interested in riding momentum post-earnings, all three deserve serious consideration.
Emerson Electric Co. (EMR): Free Stock Analysis Report
Eli Lilly and Company (LLY): Free Stock Analysis Report
DraftKings Inc. (DKNG): Free Stock Analysis Report
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