Q3 Earnings Preview: GE, MCD, HON, IR, SLB, BHI and APD

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Today is another earnings day. The amount of big companies reporting is smaller than prior days, but some key companies will be reporting Q3 earnings. We highlight the companies below, provide estimates, and potential headwinds. The biggest US companies reporting earnings before the market opening bell;  General Electric Company (NYSE:GE), McDonald’s Corporation (NYSE:MCD), Honeywell International Inc. (NYSE:HON), Ingersoll-Rand PLC (NYSE:IR), Schlumberger Limited. (NYSE:SLB), Baker Hughes Incorporated (NYSE:BHI), Air Products & Chemicals, Inc. (NYSE:APD), and Parker Hannifin Corporation (NYSE:PH).

Q3 Earnings Preview: GE, MCD, HON, IR, SLB, BHI and APD

Earnings Calendar for Friday, October 19, 2012

Before Market Open:

  • General Electric Company (NYSE:GE) is scheduled to report 3Q12 earnings on Friday, October 19th pre-market. Analysts forecast operating EPS of $0.36.  GE Industrial and GE Capital as are expected to report strong results.  General Electric Company (NYSE:GE)’s healthcare segment is seen as as potential drag to 3Q12 from declines in North American and European businesses.  General Electric Company (NYSE:GE) is a Connecticut-based highly diversified, global industrial corporation. Its businesses are organized broadly under six segments: GE Capital, Enegy Infrastructure, Aviation, Healthcare, Transportation and Home & Business Solutions. The company’s products and services include power generation equipment, aircraft engines, locomotives, medical equipment, appliances, commercial leasing and personal finance. For the six months ended 30 June 2012, General Electric Company (NYSE:GE) revenues decreased 3% to $71.68B. Net income applicable to common stockholders excluding extraordinary items increased 1% to $6.9B. Revenues reflect Corporate Items and Eliminations segment decrease of 100% to $20M, Healthcare segment decrease of 32% to $5.8B, GE Capital segment decrease of 10% to $22.9B. Net Income benefited from GE Capital segment income increase of 15%.
  • McDonald’s Corporation (NYSE:MCD) has already reported same store sales for the first two months of 3Q (0% for July; +3.7% for Aug.), which averaged +2.0%, consensus for September is +1.8%. Analysts predict 3QE EPS of $1.48 for McDonald’s Corporation (NYSE:MCD). Investors will be focusing on food inflation costs, sales, FX, and Europe, the source of 37% of profits forMcDonald’s Corporation (NYSE:MCD) remains the top biggest concern. For the six months ended 30 June 2012, McDonald’s Corporation (NYSE:MCD) increased 3% to $13.46B. Net income decreased less than 1% to $2.61B. Revenues reflect U.S. segment increase of 6% to $4.34B, APMEA segment increase of 7% to $3.1B, Comp. Store Sales(Growth%) U.S increase of 69% to 6.3%. Net income reflects U.S. segment income increase of 6% to $1.84B, APMEA segment income increase of 4% to $742.7M.
  • Honeywell International Inc. (NYSE:HON) is due to report on Oct 19th; conference call is at 9am. Analysts expect the company to report EPS of $1.14 in 3Q12. Headwines include weaker EU auto production and Commercial Aero A/M slowdown, due principally to margin support from restructuring actions. Honeywell International Inc. (NYSE:HON) operates as a diversified technology and manufacturing company worldwide. The company operates in four segments, aerospace, automation and control Solutions, transportation Systems, and performance Materials and technologies segment. For the six months ended 30 June 2012, Honeywell International Inc. (NYSE:HON) revenues increased 6% to $18.74B. Net income before extraordinary items increased 16% to $1.73B. Revenues reflect Aerospace Systems segment increase of 9% to $5.98B, Specialty Materials segment increase of 14% to $3.16B. Net income benefited from Other, net decrease from $27M (expense) to $0K, Interest and other financial charges decrease of 10% to $176M (expense).
  • Ingersoll-Rand PLC (NYSE:IR) reports on October 19th; conference call is at 10:30am. Analysts predict Ingersoll-Rand PLC (NYSE:IR) to report EPS of $0.99.  Potential headwinds facing Ingersoll-Rand PLC (NYSE:IR) in 2013, include slower US industrial demand and truck/trailer production cuts. For the six months ended 30 June 2012, Ingersoll-Rand PLC (NYSE:IR) revenues decreased 5% to $6.97B. Net income before extraordinary items increased from $54.1M to $455.8M. Revenues reflect Climate Solution segment decrease of 11% to $3.63B, Security Technologies segment decrease of 1% to $789.9M. Net income reflects Unallocated Corporate segment loss decrease of 86% to $61.8M, Industrial Technologies segment income increase of 10% to $225.9M.
  • Schlumberger Limited. (NYSE:SLB) reports third quarter earnings this morning. Analysts forecast Q3 EPS at $1.07.  One potential headwind is  frac, which continues to suffer from spot market pricing pressure and lower utilization levels across the industry. Schlumberger Limited. (NYSE:SLB) is a provider of exploration and production (E&P) services, solutions, and technology to the international petroleum industry. Key elements include a beneficial mix shift toward higher-margin exploration and deepwater activity and additional merger-related synergies. For the six months ended 30 June 2012, Schlumberger Limited. (NYSE:SLB). revenues increased 19% to $20.46B. Net income before extraordinary items increased 31% to $2.66B. Revenues reflect North America segment increase of 24% to $6.75B, Europe/Africa/CIS segment increase of 22% to $5.58B. Net income benefited from General & administrative decrease of 14% to $199M (expense), Merger & integration decrease of 43% to $37M (expense).
  • Baker Hughes Incorporated (NYSE:BHI) is reporting Q3 earnings before the bell. Street forecast is EPS of $0.84 for 3Q12 and $3.63/$4.07 for 2012/13.  Baker Hughes Incorporated (NYSE:BHI) is a leading provider of drilling, formation evaluation, completion, and production products and services to the worldwide oil and gas industry. Investors will be looking for news regarding international expansion.  Baker Hughes Incorporated (NYSE:BHI) is looking to build on their strong position in the North Sea. In August, they won a $500mn service contract from Statoil ASA (NYSE:STO) which should help offset the recent tenders in Brazil, in which BHI had ceded market share in awards from Petroleo Brasileiro Petrobras SA (NYSE:PBR). Baker Hughes Incorporated (NYSE:BHI) has cited Kuwait, Oman, Libya and Algeria all as potential incremental growth countries moving forward. For the six months ended 30 June 2012, Baker Hughes Incorporated revenues increased 15% to $10.68B. Net income increased 14% to $818M. Revenues reflect North America segment increase of 17% to $5.54B, Europe/Africa/CIS segment increase of 14% to $1.82B. Net income was partially offset by Research and engineering increase of 15% to $252M (expense). Dividend per share remained flat at $0.30.
  • Air Products & Chemicals, Inc. (NYSE:APD) will report earnings Friday morning. Street analysts expect the company to earn $0.64 EPS. On September 6th,  Paul Huck, SVP and CFO, reviewed business conditions around the world and reiterated Air Products & Chemicals, Inc. (NYSE:APD)’ F2012 outlook, while recognizing challenges in the form of weaker manufacturing growth, softer than expected conditions in electronics, and a stronger US dollar. Air Products’ project backlog is at a record $2.8bn and momentum in new project signings appears healthy. Air Products & Chemicals, Inc. (NYSE:APD) provides atmospheric gases, , performance materials, equipment, and services worldwide. For the nine months ended 30 June 2012, Air Products & Chemicals, Inc. (NYSE:APD) revenues decreased 2% to $7.01B. Net income before extraordinary items increased 4% to $862.1M. Revenues reflect Merchant Gases segment decrease of 3% to $2.65B, Tonnage Gases segment decrease of 3% to $2.36B, Equipment and Energy segment decrease of 4% to $293.8M, United States/Canada segment decrease of 5% to $3.33B, Europe segment decrease of 6% to $1.83B.
  • Parker Hannifin Corporation (NYSE:PH) is reporting third quarter earnings before the opening bell. Analysts forecast PH to report EPS of $2.03 for the quarter. One potential headwind for Parker Hannifin Corporation (NYSE:PH), 25% of revenue  comes from Europe. For the fiscal year ended 30 June 2012, Parker Hannifin Corporation (NYSE:PH) revenues increased 6% to $13.15B. Net income increased 10% to $1.15B. Revenues reflect Industrial segment increase of 7% to $10.08B, Aerospace segment increase of 9% to $2.1B, North America segment increase of 9% to $7.83B, International segment increase of 2% to $5.32B. Net income benefited from Industrial segment income increase of 9% to $1.63B. Parker Hannifin Corporation (NYSE:PH) manufactures fluid power systems, electromechanical controls, and related components.

Disclosure: No position in any securities mentioned

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