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Strong corporate earnings reports before Christmas


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With the end of the year approaching, the last corporate financial statements are on way. In terms of estimate revisions for companies in the S&P 500, analysts have reduced EPS estimates within average levels for Q4 2018 to date. On a per-share basis, estimated earnings for the fourth quarter have fallen by 3.2% since September 30.

During the week, were published the finance reports of cruise operator Carnival, sportswear manufacturing company Nike and smartphone developer BlackBerry.

The companies reported positive finance reports but on the background of the unfriendly environment, the stocks of the above-mentioned companies collapsed.

Carnival Corporation earning surpass estimates

Carnival Corporation announced US GAAP net income for the full year 2018 of 3.2 billion USD, or 4.44 USD diluted EPS, compared to 2.6 billion USD, or 3.59 USD diluted EPS, for the prior year. Full-year 2018 adjusted net income amounted to 3.0 billion USD, or 4.26 USD adjusted EPS.

Carnival Corporation reported net income for Q4 2018 of 494 million USD, or 0.71 USD diluted EPS. The gross cruise revenues for the reporting period increased by 4.3% YoY to 4.4 billion USD. However, the changes in fuel prices (including realized fuel derivatives) and currency exchange rates decreased earnings by 0.13 USD per share.

The company remains positive for 2019, as cumulative advance bookings for the full year 2019 are considerably ahead of the prior year at prices that are in line with the prior year. Based on current booking trends, the company expects the full-year 2019 constant currency net cruise revenues to be up approximately 5.5%, with capacity growth of 4.6%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times, remaining on the spotlight of investors. The positive trend is expected to continue in 2019 when the company expects serious growth and maintaining its profitability.

BlackBerry continues to delight investors

BlackBerry reported better-than-expected sales revenue for the quarter. The smartphone manufacturer generated a 59 million USD profit for the quarter, which ended on November 30, from a 275 million USD loss a year earlier. On a revised basis, the company earned 0.05 USD per share, surpassing the average analysts’ forecast of 0.02 USD per share.

The adjusted earnings for Q3 2018 reached 228 million USD, compared to an average estimate of the analysts for 215.7 million USD.

The revenue from the corporate software and services unit, a key indicator of growth, is 96 million USD in the reporting period, which is 1% less than a year earlier. Previously, the company said it expects software revenue to perform worse by fiscal 2019 due to changes in accounting standards.

BlackBerry has retreated from smartphone production in recent years, focusing on its future as a security software vendor under the leadership of Chief Executive, John Chen.

The company reaffirmed its forecast for 2019. It expects its software and service revenues to grow by between 8% and 10% and generate earnings per share.

As a result of news reports, the company’s stock price rose by 3.4% during early trading in New York. Since the beginning of the year, the BlackBerry stocks recorded a 34% drop in value.

Nike’s revenue beats analysts expectations

Nike’s ambitious digital transformation is driving strong results and momentum in North America and international markets. The athletic apparel company turned in quarterly earnings and revenue that beat analysts’ expectations with the help of strong global sales and improvements to its digital business.

The company’s revenue for the quarter amounted to 9.37 billion USD versus expected 9.18 billion USD.

The company’s revenues for the NIKE Brand were 8.9 billion USD, up by 14% on a currency-neutral basis driven by accelerated growth across all geographies and in NIKE Direct. The revenue grew in nearly every key category led by Sportswear with well-balanced double-digit growth across footwear and apparel globally.

The company’s revenues for Converse brand were 425 million USD, up by 6% on a currency-neutral basis, mainly driven by growth in Asia.

The company reported diluted earnings per share for the quarter of 0.52 USD, representing an increase of 13% driven by double-digit revenue growth, gross margin expansion and a lower average share count, partially offset by higher selling and administrative expenses and a higher effective tax rate.