Q1 Earnings Season a Mixed Bag on the iBillionaire Index

With Q1 earnings season still unfolding, it is a good time to look at how the billionaire stocks tracked by the iBillionaire Index (IBLN) are doing.

Headwinds from the fourth quarter of 2014 continued in the first quarter of 2015. The strong U.S. dollar, lower oil prices, harsh weather and slowed global grown have had a major impact on U.S. companies, many of which have seen their revenues impacted and have failed to meet Wall Street expectations on earnings.

The percentage of S&P 500 companies beating forecasts is lower than in the recent quarters – something largely explained by volatility in global currencies. Large-cap companies are especially sensitive to currency moves.

With Q1 earnings season still unfolding, it is a good time to look at how the billionaire stocks tracked by the iBillionaire Index (IBLN) are doing. The results are mixed. Of the 30 companies tracked by the index, 16 have already reported. Half exceeded expectations, while the other half fell short.

Table 1

Earnings Season Winners

Apple (NYSE: AAPL)

Last quarter, Apple set the bar high, reporting a profit of $18 billion, the highest quarterly profit of any publicly traded company. This quarter, Apple didn’t disappoint, either. Its reported net income came in at $13.6 billion, or $2.33 per share, well above the expected EPS of $2.19. Total revenue came in at $58 billion, a 27% increase from last year. The majority of Apple’s revenue comes from international sales, despite slowed global growth. Apple shares climbed +1.8% on Tuesday.

Table 2

Amgen (NYSE:AMGN)

Amgen beat earnings estimates of $2.11 per share and reported an adjusted EPS of $2.48. This is a 33% increase from the first quarter of 2014. “Our earnings growth of 33% reflects the benefits of our transformation initiatives and our discipline in controlling expenses ahead of the launch investments that we’ll make later this year,” said Amgen CEO Bob Bradway during the quarterly call. Total revenue also beat forecasts by 11% with a reported $5.03 billion.

Delta Air Lines (NYSE:DAL)

Delta’s earnings of $0.45 per share exceeded estimates by one cent. While its revenue of $9.388 billion was marginally lower than the expected $9.395 billion, the first quarter of 2015 is the best first quarter in Delta’s history. Pre-tax earnings grew 34% from the first quarter of 2014.”We continue to run, by far, the industry’s best operation,” said Delta CEO Richard Anderson. 

Dow Chemical (NYSE:DOW)

Dow beat estimates by an astonishing 41%. Earnings per share climbed to $1.18 from $0.78 per share last year, and EBITDA margins reached the highest levels since 2005. “This marks our 10th consecutive quarter of year-over-year operating EPS, EBITDA and margin growth,” said Howard Ungerleider during the quarterly call. Dow has also returned almost $1 billion to shareholders through dividends and repurchases.

In his first quarter letter to Omega Advisors investors, Leon Cooperman revealed that he has bought into Dow Chemical.

eBay (NYSE:EBAY)

eBay reported earnings of $0.67 per share, higher than the expected $0.58. Despite strong currency headwinds, eBay’s $4.45 billion revenue came close to the $4.46 billion forecast. The revenue increased 4% since Q1 of last year. eBay also declared $829 million in free cash flow, a $1 billion stock repurchase program and plans to acquired Paydiant and CyActive.

Consol Energy (NYSE:CNX)

Consol blew analysts’ $0.11 estimate out of the water by 236.4% and reported earnings of $0.37 per share. However, quarterly revenue is down 8.2% from the same period in 2014. Given lower global commodity prices, this did not come as a surprise. According to Zacks, Consol is well position to take advantage of a potential rebound in the sector.

Micron Technology (NYSE:MU)

Micron’s quarterly EPS of $0.81 came in five cents higher than the estimated $0.77 per share. Revenue also beat forecasts and increased by 1.4% from the first quarter of 2014 to $4.17 billion. According to Zacks, the better-than-expected numbers resulted from improving market conditions, diversified product portfolio and encouraging operating performance.

Thermo Fisher Scientific (NYSE:TMO)

Thermo Fisher’s adjusted EPS was $1.63, slightly ahead of the expected $1.61. Its $3.918 billion quarterly revenue was higher than last year, but lower than the consensus estimate of $4 billion. “We launched a number of exciting new products, further strengthened our presence in emerging markets, and began to realize revenue synergies from combining our new capabilities. (…) Based on these accomplishments we remained well positioned to deliver on our growth goals for the year,” Marc Casper, company president and CEO, said.

Earnings Season Losers

General Motors (NYSE:GM)

GM’s $0.86 per share came below the $0.97 forecast. Currency devaluation in Venezuela and economic and political instability in Russia has a negative impact on the company’s earnings. However, GM shows strong year-over-year results. This quarter, the company earned $945 million, or four times more than in Q1 2014. “Our results in the first quarter provide a solid foundation to achieve our financial commitments for the year,” said Mary Barra, GM CEO.

EMC Corp. (NYSE:EMC)

IT giant EMC Corp. missed the consensus estimate of $0.25 and reported slightly lower earnings of $0.22 per share. Quarterly revenues also missed forecasts but grew 2.4% from Q12014.

Monsanto (NYSE:MON)

This quarter, Monsanto lagged the consensus earnings estimate of $2.96 per share, reporting EPS of $2.90. Revenues also disappointed and came it at $5.2 billion, 10.9% lower than the year before. Cyclical factors, such as lower corn production in the U.S. and a long winter, played a role in the worse-than-expected results.

Facebook (NYSE:FB)

Facebook barely missed estimates and seems to be in good shape going forward. The company said that it was affected by the weakening euro against the dollar, though revenue increased 42% year-over-year to $3.54 billion. Mobile advertising was the main revenue driver, and mobile engagement seems promising. “We continue to see strong growth in daily engagement around the world, including in our most engaged markets. On mobile, nearly 1.25 billion people now use Facebook every month, 240 million more than a year ago, and we now we see more than 1 billion mobile searches every day,” said Mark Zuckerberg.

Google (NYSE:GOOG)

Google announced $17.3 billion in total revenue with $5.20 in earnings per share. This is 18 cents below the Street’s expectations. Similar to other tech giants, Google blamed changes in currency for lost earnings. The stronger dollar slashed the company’s revenue by roughly $1 billion. However, Google sits on a healthy balance sheet of $65 billion in cash and short-term investments. Despite lower-than-expected results, the stock spiked after Google’s quarterly call, during which company executives emphasized mobile growth and upcoming deals.

Yahoo (NYSE:YHOO)

Yahoo disappointed Wall Street this earrings season and declared EPS of $0.15 on $1.04 billion revenue, against the forecasted earnings of $0.18 per share on $1.06 billion revenue. “As you know, Yahoo! is amidst a multi-year transformation to return an iconic company to greatness,” Marissa Mayer said. “We have said in the past that we anticipated GAAP revenue growth occurring ahead of revenue ex-TAC and EBITDA growth and that’s precisely what we saw this quarter.”

Learn more about the iBillionaire Index and all 30 companies that comprise it at www.iBillionaireIndex.com.

* Expected earnings data has been drawn from Zacks Investment Research.

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