Earnings Previews: DR Horton, General Electric, Halliburton, Lockheed Martin, Raytheon

Shortly after Friday’s opening bell, the Dow Jones industrial average traded down 0.15%, while the S&P 500 traded up 0.25% and the Nasdaq Composite was up 0.77%.

After U.S. markets closed Thursday, Netflix reported results that missed the profit estimate while narrowly beating on revenue. The big news was subscriber growth, the metric by which Netflix’s results are always judged. New paid subscribers totaled 7.7 million, well above the consensus estimate for 4.6 million additions and the company’s own guidance for new subscriptions of 4.6 million. Netflix also shuffled its top managers. Reed Hastings, co-founder and co-CEO, will become executive board chair, and Chief Operating Officer Greg Peters will join Ted Sarandos as co-CEO. The stock traded up about 7.6% shortly after Friday’s opening bell.

Before markets opened on Friday morning, Regions Financial reported beating both earnings per share (EPS) and revenue estimates, and it said the bank expects adjusted revenue growth of 8% to 10% in the new fiscal year. Shares traded up about 2.4%.

Schlumberger also reported better-than-expected EPS and revenue. The oilfield services giant also raised its quarterly dividend by 43% to $0.25, beginning with the April payment to shareholders of record on February 8. Shares traded up about 0.7% early Friday.

Ericsson missed the consensus EPS estimate but beat on revenue. The company is going to propose a dividend increase of 13% from an annualized $0.23 to $0.26. Shares traded down about 6.4% Friday morning.

First thing Monday morning, Baker Hughes and Synchrony Financial are on deck to report quarterly results.

Here is a look at five companies set to report quarterly results early Tuesday morning.

D.R. Horton

Homebuilder D.R. Horton Inc. (NYSE: DHI) has reversed a 12-month, 20% drop in its stock at the end of the September quarter, with shares now trading up nearly 2% over the past 12 months. The stock has added more than 35% since mid-October. Given the moribund housing market, however, analysts expect the builder to deliver weaker quarterly earnings and revenue than either the prior quarter or the year-ago quarter.

Of 22 brokerages covering the stock, 15 have a Buy or Strong Buy rating. Six more have the shares rated as a Hold. At a recent price of around $92.00 a share, the upside potential based on a median price target of $102.00 is about 10.9%. At the high price target of $135.00, the implied upside is 46.7%.

For the first quarter of fiscal 2023, revenue is forecast to total $6.43 billion, which would be down 33.3% sequentially and 8.9% lower year over year. Adjusted EPS are forecast at $2.26, down 51.7% sequentially and by 28.7% year over year. For the fiscal year that ends in September, EPS are forecast at $9.69, down 41.3%, on sales of $27.91 billion, down by 16.6%.

D.R. Horton stock trades at about 9.5 times expected 2023 EPS, 9.5 times estimated 2024 earnings of $9.74 and 8.5 times estimated 2025 earnings of $10.85 per share. The stock’s 52-week trading range is $59.25 to $97.32. The company pays an annual dividend of $1.00 (yield of 1.06%). Total shareholder return for the past year was 3.08%.

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