Earnings season champs: Stocks that are increasingly profitable while other companies just scrape by
Second-quarter earnings season is almost over and, it turns out, it wasn’t necessarily as bad as feared. To be sure, inflation and profit margins remain a top concern, with some companies slowing down hiring or even cutting jobs . But bottom line S & P 500 earnings are on track to have increased 6.7% in the second quarter, up from the expected 4% at the end of June, according to FactSet. That’s with nearly 90% of the index’s companies reporting results. It’s one thing for companies to have beaten expectations in the quarter just ended. It’s another to have their future earnings prospects actually improve. What follows are those rare companies that actually increased their profitability. To find these names, CNBC Pro looked at companies that reported gross margin rises of at least 5 percentage points since the second quarter of 2021 and also saw analysts increase their 2022 earnings per share numbers after the latest earnings. Those EPS growth rates climbed by at least 5 percentage points compared with the growth rate when earnings season began in mid-July. All companies are part of the S & P 500 and already reported earnings this season. Not surprisingly, many energy names made the list thanks to the surge in oil prices. Marathon Petroleum , for instance, saw its earnings per share growth rate for 2022 increase by 179 percentage points and its gross margin expand by 10.4 percentage points year over year. Lithium miner Albemarle also made the cut, with its EPS growth rate for the year rising 177 percentage points and gross margins higher by 7.2 points from a year ago. Hilton and Expedia were both beneficiaries of the rebound in travel demand. Hilton’s 2022 earnings per share growth rate expanded 14.5 percentage points, and its year-over-year gross margins increased 6.9 points. Expedia saw its EPS growth rate rise 9.8 points and gross margins climb 8.1 points from last year. Strong steel demand helped boost Nucor . Its EPS growth rate for 2022 increased 16 percentage points and gross margins grew by 6.7 percentage points from a year ago. Technology company ON Semiconductor had its EPS growth for the year increase by 7.9 points, while its gross margins rose 11.8 points year over year. Correction: This story has been updated to provide EPS growth rates correctly in percentage points. This post has been syndicated from a third-party source. View the original article here.