Earnings Wrap: Kimberly Clark, Sprint, Rockwell Collins, More

The start of another big earnings week is here, with heavyweights like Facebook Inc (NASDAQ:FB) scheduled to announce their quarterly results later this week. In this article we’ll run through five companies’ earnings reports which were issued before the morning bell and see how those companies fared in their latest quarter and how the market is receiving their performance this morning.

Those companies are Kimberly Clark Corp (NYSE:KMB), Westinghouse Air Brake Technologies Corp (NYSE:WAB), Sprint Corp (NYSE:S), Rockwell Collins, Inc. (NYSE:COL), and Roper Technologies Inc (NYSE:ROP). We’ll also use hedge fund sentiment to see what traders think of these companies’ long-term potential.

At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

Double Beat Not Enough for Kimberly Clark

Consumer Products Giant Kimberly Clark Corp (NYSE:KMB) is down by 1.52% this morning despite its top- and bottom-line second quarter results beating analysts’ expectations. Sales of $4.59 billion topped the $4.57 billion consensus estimate, while adjusted earnings per share came in at $1.53, ahead of the consensus mark by $0.05. Sales came in slightly lower year-over-year, being heavily impacted by currency headwinds, while EPS showed a huge improvement from a loss of $0.83 a year earlier. The company’s consumer tissue segment, headlined by its Kleenex and Scott brands, did $1.49 billion in sales during the quarter, while its personal care unit headlined by Huggies managed $2.28 billion in sales. Each unit’s sales were down slightly year-over-year due to currency exchange, while volumes rose.

A dividend aristocrat, Kimberly Clark Corp (NYSE:KMB) was in the portfolios of 31 of the hedge funds tracked by Insider Monkey as of March 31. Those investors held $1.22 billion worth of the company’s shares, amounting to 2.50% of its float.

Sluggish Freight Group Derails Wabtec

Shares of Westinghouse Air Brake Technologies Corp (NYSE:WAB) have tumbled by 5.61% this morning following its second quarter earnings release. Sales fell by 15% year-over-year to $723.60 million, with the company’s Freight Group being hit particularly hard, with sales falling by 26% to $397.10 million. The Transit Group fared better, with sales rising by 5% to $326.50 million. Currency exchange was again a factor, impacting the company’s top-line by $9 million. Wabtec’s bottom-line resisted the top-line declines by remaining flat year-over-year at $1.05 per share, thanks partially to a 7% reduction in the float. With Freight expected to remain sluggish for the remainder of the year, Wabtec was forced to cut its top- and bottom-line guidance.

Westinghouse Air Brake Technologies Corp (NYSE:WAB) is a top stock pick of Cryder Capital, which held 219,165 shares of the company on June 30.

We’ll check out the earnings reports of Sprint, Rockwell Collins, and Roper Technologies on the next page.

Impressive Subscriber Growth Propels Sprint

The market is rewarding Sprint Corp (NYSE:S) this morning after it announced a surprisingly strong quarter and robust subscriber growth, pushing shares up by 18.72% this morning. For its first quarter of fiscal year 2016 ended June 30, Sprint pulled in net operating revenue of $8.01 billion, slightly topping estimates, while it added 173,000 postpaid wireless additions during the quarter, its highest quarterly total in nine years. Sprint also announced that it has enough money to carry it through the end of the year, alleviating some concerns that its financial position was tenuous following parent company Softbank’s $32 billion purchase of ARM Holdings plc (ADR) (NASDAQ:ARMH), which was announced earlier this month.

Sprint Corp (NYSE:S) was not overly loved by the hedge funds in our database as of March 31, with them owning just 1.30% of its float, valued at $182 million. 20 hedge funds were long the stock.

Trimmed Guidance Has Investors Wary of Rockwell

Rockwell Collins, Inc. (NYSE:COL) has dipped slightly in morning trading following its fiscal third quarter earnings release before the market opened. Sales rose by 3% to $1.33 billion during the fiscal quarter, while EPS jumped by 23% to $1.63. Commercial Systems sales slipped by 2% year-over-year to $367 million, while Government Systems sales rose by 10% to $376 million. The solid quarter was somewhat undone by trimmed guidance ranges, with revenue, EPS, and cash flow from operations guidance ranges all being narrowed to the lower-end of the previously disclosed ranges. Cash flow from continuing operations also plummeted to $223 million for the first nine months of the 2016 fiscal year, down from $341 million during the year-ago period.

Ken Griffin‘s Citadel Investment owned 561,051 shares of Rockwell Collins, Inc. (NYSE:COL) on March 31, down by 5% quarter-over-quarter.

Double Miss Spells Double Trouble for Shares of Roper Technologies

Lastly, shares of Roper Technologies Inc (NYSE:ROP) have plunged by over 6% today after its second quarter financial results missed estimates. GAAP revenue rose by 5% year-over-year to $932 million, but was well off the Zacks Consensus Estimate of $959 million. Adjusted earnings fell by 8% year-over-year to $1.56 and also missed the Zacks mark by $0.05. Sales were strong in the company’s Medical & Scientific Imaging and RF Technology segments, while they suffered year-over-year declines in its Industrial Technology and Energy Systems & Controls segments. Roper Technologies Inc (NYSE:ROP) anticipates investing over $1 billion in acquisition opportunities by the end of the year to help facilitate its growth.

25 hedge funds in our database were shareholders of Roper Technologies at the end of March, owning over $728 million worth of its shares in total.

Disclosure: None