Despite lofty valuations and the recent stock market carnage, mega-cap U.S. stocks saw a dramatic surge in sales and profits in Q3. The mega-cap stocks’ earnings, revenues and management outlook were primarily boosted by solid economic growth and rise in spending levels.
The reduction in tax rate has given a huge sigh to corporates. The tax rate has come down to 8% -15% from the earlier higher rate of 35%.
But, it’s the following four mega-cap U.S. stocks that dominated stellar Q3 earnings season. Let us have a look –
Microsoft Rides Cloud to Impressive Earnings Beat:
Microsoft Corporation’s earnings for the quarter 3 has surpassed top analysts prediction, including its division of Intelligent Cloud. The Azure sales rose 76% aiding the division sales climb of 24% to $8.6 billion. The productivity and business unit including Office 365 suite products also saw a revenue growth of 19% to $9.8 billion and personal computing revenues increased 15% to $10.7 billion.
CFO Amy Hood told investors that “customer demand for our hybrid and cloud offerings drove the quarter and we continued to benefit from favorable macroeconomic and IT spending trends.” Incidentally, Microsoft’s Azure cloud business is second after Amazon.com, Inc.’s AWS cloud platform in terms of market share.
Warren Buffett’s Insurers Withstand Storms:
Berkshire Hathaway Inc.’s insurers avoided the losses caused by Hurricane Florence in the third quarter and provided the biggest upward rise from last year. The company’s Q3 earnings of $6.9 billion nearly doubled from $3.4 billion earned last year, mainly due to the lower tax rate.
The focus on new segments ranging from more train traffic on its railroad to an uptick in demand for electronic components and insurance division has given a boost to the company’s revenue. The catastrophe costs contracted almost 90% from last year’s terrible Q3, the sharpest decline among all major publicly-traded U.S. insurers.
Intel Reports Top and Bottom-Line Beats:
Intel Corporation’s revenue of $19.2 billion has beaten top analysts’ estimates. Giant, Intel Corporation earned $1.40 per share in the third quarter and has crossed past profit estimates for the 12th straight quarter.
Interim CEO Bob Swan said in a statement that “stronger than expected customer demand across our PC and data-centric businesses continued in the third quarter. This drove record revenue and another raise to our full-year outlook, which is now up more than six billion dollars from our January expectations. We are thrilled that in a highly competitive market, customers continue to choose Intel.”
Boeing Flies High:
The Boeing Company, leader in Aerospace and defense sector, beat third-quarter earnings and revenue projections, with earnings per share of $3.58 and revenues at $25.15 billion.
Chairman and Chief Executive Officer Dennis Muilenburg, chipped in and said that “during the quarter we captured important new defense business, winning and investing in the MQ-25 and T-X programs and securing the MH-139 contract, clearly demonstrating the value Boeing brings to customers while positioning us well for future growth opportunities.”
The aforesaid stocks have not only posted upbeat results in the third quarter earnings season but are also poised to maintain their winning streak in the near future on balance sheet and cash flow strength and that makes them great buys as of now.
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