Homebuilders, Airlines, and GM: Here’s How These Five Stocks Performed During Their Latest Quarters

All three index futures are close to flat as Wall Street digests the latest earnings results released by major corporations. In this earnings edition of market-trenders, we take a look at the latest earnings reports released by D.R. Horton, Inc. (NYSE:DHI), PulteGroup, Inc. (NYSE:PHM), Alaska Air Group, Inc. (NYSE:ALK), General Motors Company (NYSE:GM), and Southwest Airlines Co (NYSE:LUV) and we see what the smart money thinks of each stock.

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D.R. Horton Meets Earnings Estimates

D.R. Horton, Inc. (NYSE:DHI) earned $0.66 per share on revenue of $3.12 billion for the second quarter, meeting the consensus analyst estimate with its bottom-line results, but missing by $130 million on its top-line. Despite the revenue miss, D.R. Horton’s sales rose by 9.1% year-over-year and the company’s backlog jumped by 15% to 14,670 homes as low interest rates and a strong U.S economy stoke demand. The company’s pretax profit margin also inched up by 40 basis points to 11.7% for the period. 38 funds in our database were long D.R. Horton, Inc. (NYSE:DHI) at the end of March, down by four quarter-over-quarter.

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PulteGroup Reports Strong Results

PulteGroup, Inc. (NYSE:PHM) beat both bottom and top-line estimates with its second quarter results of EPS of $0.34 on sales of $1.8 billion, pushing its shares up by over 2.5% this morning. Analysts were expecting $0.32 per share in earnings and $1.66 billion in revenue. Sales rose by 40.6% year-over-year, driven by an 11% jump in ASP and a 27% increase in deliveries. Pulte’s backlog also jumped by 21% in dollar terms to $3.7 billion. Furthermore, the company’s Board tripled the size of its share repurchase authorization, to $1.5 billion. PulteGroup intends to buy back the $1.5 billion in shares by the end of 2017. Legg Mason Capital Management owned more than 6.6 million shares of PulteGroup, Inc. (NYSE:PHM) at the end of March.

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On the next page we’ll take a look at the earnings results of Alaska Air Group, General Motors Company, and Southwest Airlines.


Alaska Air Earnings Ahead of Expectations

Traders are watching Alaska Air Group, Inc. (NYSE:ALK) today after the airline reported second quarter EPS of $2.12 on sales of $1.49 billion, beating profit estimates by $0.03 per share but missing the top-line consensus by $10 million. Passenger revenue rose by 3% year-over-year and the company expanded its adjusted pre-tax margins to 28.4% from 25.7% in the second quarter of 2015. Second quarter PRASM fell by 7.7% to $0.1142 while load factor came in at 84.9%. For the first six months of 2016, Alaska Air generated $560 million in free cash flow and $900 million in operating cash flow. 33 funds in our system owned shares of Alaska Air Group, Inc. (NYSE:ALK) at the end of March.

GM Surges on Results

General Motors Company (NYSE:GM) shares are 4% higher in morning trading after the vehicle manufacturer delivered a strong second quarter. For the three months ended June 30, the company earned $1.86 per share on sales of $42.4 billion, beating the consensus marks by $0.35 and $3.47 billion respectively. Sales rose by 11.1% year-over-year, while operating margin came in at a record 9.3%. Guidance was also strong, as GM expects full year EPS of $5.50-to-$6.00 versus the previous range of $5.25-to-$5.75. Analysts were expecting just $5.63 per share. Of the 766 active funds that we track, 67 of them owned $3.72 billion worth of General Motors Company (NYSE:GM) shares on March 31, which accounted for 7.60% of the stock’s float.

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Southwest Misses, Stock Drops

Southwest Airlines Co (NYSE:LUV) shares are down by 6% today after the airline missed both top and bottom-line estimates. For the second quarter, Southwest earned $1.19 per share on revenue of $5.38 billion, missing the consensus estimates by $0.02 per share and $30 million, respectively. PRASM retreated by 3.5% year-over-year while load factor inched up to 85.6%, one percentage point higher than a year ago. Guidance was disappointing, with the airline expecting unit revenue to drop by another 3%-to-4% for the third quarter. Meanwhile GAAP unit costs might increase by 2% during the same time period, mainly due to various accounting depreciation expenses. The number of elite funds in our system with holdings in Southwest Airlines Co (NYSE:LUV) rose by six quarter-over-quarter to 58 as of the end of March.

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Disclosure: None