A Look Into Friday’s Top Earnings Reports: The Good, The Bad, and The Ugly

U.S. stocks are mixed in Friday trading, as oil tumbled and earnings have largely failed to impress. Among the companies that reported their financial results for their latest completed quarter this morning were General Electric Company (NYSE:GE), Gentex Corporation (NASDAQ:GNTX), Honeywell International Inc. (NYSE:HON), Moody’s Corporation (NYSE:MCO), and SunTrust Banks, Inc. (NYSE:STI). Let’s take a look into some of the most relevant figures, and see what the hedge funds in our database think about the companies in question.

At Insider Monkey, we track around 765 hedge funds and other 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 (see more details about our small-cap strategy).

Pavel Ignatov/Shutterstock.com

Pavel Ignatov/Shutterstock.com

GE Fails To Impress Despite Record Earnings Growth

Let’s start with General Electric Company (NYSE:GE), which has lost roughly 2.25% today even though it posted a top and bottom-line beat before the market opened. Second quarter EPS of $0.51, up by 64% year-over-year, and revenue of $33.5 billion, up by 15% year-over-year, beat the Street’s consensus estimates by $0.05 and $1.74 billion, respectively. However, a 2% decline in orders amidst what management described as a “volatile and slow-growth economy,” weighed on the stock. Feebleness in its core industrial business was an additional source of concern for investors, although company execs predicted a rebound during the second half of the year.

Among the more than 765 funds that we track, 64 were long General Electric Company (NYSE:GE) at the end of the first quarter. Nelson Peltz’s Trian Fund Management disclosed ownership of 74.24 million shares of the company valued at more than $2.3 billion as of March 31.

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Gentex Spikes On Double-Beat

Next up is Gentex Corporation (NASDAQ:GNTX), which is up by roughly 5.4% on Friday, driven by a double beat with its second quarter results. EPS of $0.30 beat the consensus estimate by $0.01, while revenue of $423.8 million, up by 11.7% year-over-year, came in $6.81 million above expectations. For the full year, management guided for revenue in the range of $1.68 billion to $1.72 billion.

15 funds in our database held long positions in Gentex Corporation (NASDAQ:GNTX) at the end of the first quarter. Among them, we can count Chuck Royce’s Royce & Associates, which owned 7.23 million shares when March reached its conclusion.

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We’ll dissect the earnings reports released by three other companies this morning on the next page.

Poor Revenue and Guidance Sour Honeywell

Shares of Honeywell International Inc. (NYSE:HON) have slipped by about 3.3% in Friday trading following a revenue miss reported by the company this morning. While second quarter EPS of $1.66 beat the Street’s consensus mark by $0.02, revenue of $9.99 billion, up by 2.1% year-over-year, missed expectations by $140 million. Moreover, management decided to trim its full year revenue guidance by $300 million, citing a sluggish economy and reduced demand for energy-related products and services. The company now anticipates sales of between $40.00 billion and $40.60 billion. The lower end of the earnings guidance was also cut by $0.05, to $6.60, while the high-end remained unchanged at $6.70.

55 funds among those we keep track of were long Honeywell International Inc. (NYSE:HON) at the end of the first quarter. The largest stake was that of Ken Griffin’s Citadel Investment Group, which owned 2.46 million shares on March 31.

Moody’s Call Seems Lukewarm

Back to gainers, there’s Moody’s Corporation (NYSE:MCO), which is up by a mere 0.2% following the announcement of its second quarter financial results. EPS of $1.30 came in $0.02 ahead of estimates, while revenue of $928.9 million beat the Street’s consensus mark by $19.82 million. Management reiterated its full year outlook, with revenue anticipated to rise by low-single digits and earnings expected to come in at the lower-end of the previous guidance range of $4.55-to-$4.65.

By the end of March, 36 funds in our database were bullish on Moody’s Corporation (NYSE:MCO). Warren Buffett’s Berkshire Hathaway was particularly optimistic about the company’s prospects, owning 24.66 million shares of the company.

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SunTrust Inspires No Trust Today

Finally, we’ve got SunTrust Banks, Inc. (NYSE:STI), which has lost more than 2% since the bell rang this morning, despite its second quarter earnings and revenue coming in ahead of expectations this morning. EPS of $0.89 and revenue of $2.22 billion beat the Street’s consensus guesstimates by $0.01 and $80 million, respectively. “Despite the impact of the continued low interest rate environment, we remain committed to helping our clients and communities improve their financial confidence, thereby helping our shareholders continue to outperform,” Chairman and CEO William H. Rogers, Jr. said in a statement.

SunTrust Banks, Inc. (NYSE:STI) counted the support of 33 funds in our database as of March 31. Noteworthy was the stake held by Cliff Asness’ AQR Capital Management, which comprised more than 4.00 million shares or $145 million in stock.

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Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned in this article.