Altria Group, Inc. (MO) Q3 2026 Earnings Call October 29, 2026 9:00 AM EDT
Company Participants
Mac Livingston - Vice President of Investor Relations
Salvatore Mancuso - CEO & Director
Heather Newman - Executive VP & CFO
Conference Call Participants
Mirza Faham Baig - UBS Investment Bank, Research Division
Matthew Smith - Stifel, Nicolaus & Company, Incorporated, Research Division
Bonnie Herzog - Goldman Sachs Group, Inc., Research Division
Andrei Andon-Ionita - Jefferies LLC, Research Division
Pallav Mittal - Barclays Bank PLC, Research Division
Eric Serotta - Morgan Stanley, Research Division
Presentation
Operator
Good day, and welcome to the Altria Group 2026 Third Quarter Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Altria's management and a question-and-answer session. Representatives of the investment community and media on the call will be able to ask questions following the conclusion of the prepared remarks.
I would now like to turn the call over to Mac Livingston, Vice President of Investor Relations. Please go ahead, sir.
Mac Livingston
Vice President of Investor Relations
Thanks, Olivia. Good morning, and thank you for joining us. This morning, Sal Mancuso, Altria's CEO, and Heather Newman, our CFO, will discuss Altria's 2026 third quarter and first 9 months business results.
Earlier today, we issued a press release providing our results. The release, presentation and quarterly metrics are all available at altria.com. During our call today, unless otherwise stated, we're comparing results to the same period in 2025.
Our remarks contain forward-looking statements, including projections of future results. Please review the forward-looking and cautionary statements section at the end of today's earnings release for various factors that could cause actual results to differ materially from projections. Future dividend payments and share repurchases remain subject to the discretion of our Board of Directors.
Key Takeaways Altria's Q3 adjusted EPS rose 4.8% to $1.52, while net revenues increased 1% to $6.13 billion.Higher pricing lifted smokeable profits 3.9%, despite lower cigarette volumes and increased promotions.Altria raised its 2026 EPS outlook to $5.66-$5.74 and expanded the share buyback program by $1 billion.
Altria Group Inc. (MO - Free Report) posted third-quarter 2026 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
Adjusted earnings increased 4.8% year over year to $1.52 per share, beating the consensus estimate of $1.51. Higher adjusted operating companies income (“OCI”) and improved adjusted earnings came from its investment in Anheuser-Busch InBev SA/NV.
Altria's net revenues increased 1% year over year to $6,132 million, primarily benefiting from higher revenues in the smokeable products business. Revenues, net of excise taxes, rose 3.6% to $5,441 million. The metric beat the consensus mark, which was pegged at $5,303 million.
Decoding Altria’s Segment-Wise ResultsSmokeable Products: Net revenues in the category increased 0.8% year over year to $5,432 million. Higher pricing supported growth, partially offset by increased promotional investments, lower shipment volumes and an unfavorable shift toward discount products. Revenues, net of excise taxes, advanced 3.7% to $4,762 million.
Adjusted OCI rose 3.9% to $3,072 million, benefiting from higher pricing and increased refunds of taxes and duties paid on imported cigarettes. These gains outweighed higher promotional spending, manufacturing costs and volume pressure. The adjusted OCI margin expanded 10 basis points to 64.5%.
Domestic cigarette shipment volumes declined 2.9% to 15,725 million sticks. Excluding trade inventory movements, management estimated a 4% decline in domestic cigarette shipments, compared with an estimated 5% contraction for the overall industry. Reported cigar shipment volumes increased 0.9% to 457 million units.
Oral Tobacco Products: Net revenues in the segment slipped 0.1% year over year to $688 million. Lower shipment volumes and higher promotional investments largely offset pricing gains. Revenues, net of excise taxes, increased 0.3% to $667 million.
Adjusted OCI declined 3.7% to $443 million, reflecting higher costs, promotional spending and lower volumes. The adjusted OCI margin contracted 280 basis points to 66.4%.
Domestic oral tobacco shipments fell 4.3% to 170.6 million cans, as Copenhagen and Skoal volumes declined 10.1% and 12.6%, respectively.
Altria's Nicotine Pouch Position Shows Mixed TrendsShipments of on! nicotine pouches increased 13.3% year over year to 47.8 million cans. The brand's retail share of the overall oral tobacco category improved 10 basis points to 8.3%, although it declined 30 basis points sequentially.
The nicotine pouch category represented 61.2% of the oral tobacco market, up 580 basis points year over year. However, on!'s share within the nicotine pouch category declined 130 basis points to 13.5%.
Altria Stock: Other UpdatesThe company ended September with cash and cash equivalents of $2,697 million and total debt of $24,061 million. Long-term debt stood at $22,886 million, while the total stockholders' deficit attributable to Altria was $2,225 million.
During the third quarter, Altria repurchased 5.9 million shares for $400 million and paid $1.7 billion in dividends.
The board also authorized a $1 billion expansion of the existing share repurchase program, which expires on Dec. 31, 2027.
What to Expect From MO in 2026Altria raised its 2026 adjusted earnings guidance to $5.66-$5.74 per share from the prior range of $5.61-$5.72. The updated outlook implies growth of 4.5-6% from adjusted earnings of $5.42 per share in 2025.
This Zacks Rank #2 (Buy) stock has gained 7.4% in the past three months compared with the industry’s 4% growth.
Image Source: Zacks Investment Research
Other Stocks to ConsiderLamb Weston Holdings, Inc. (LW - Free Report) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. LW presently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year earnings indicates 7.6% growth from the year-ago numbers. Lamb Weston delivered a trailing four-quarter earnings surprise of 22.1%, on average.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. At present, CHEF carries a Zacks Rank #2. Chefs' Warehouse delivered a trailing four-quarter earnings surprise of 30.4%, on average.
The consensus estimate for Chefs' Warehouse’s current fiscal-year sales and earnings implies growth of 10.8% and 34.2%, respectively, from the year-ago reported figures.
Mama's Creations, Inc. (MAMA - Free Report) manufactures and markets fresh deli-prepared foods in the United States. At present, MAMA holds a Zacks Rank of 2. Mama's Creations delivered a trailing four-quarter earnings surprise of 121.7%, on average.
The consensus estimate for Mama's Creations’ current fiscal-year sales and earnings implies growth of 30.3% and 66.7%, respectively, from the year-ago figures.
Vancouver, BC – TheNewswire - October 29, 2026 – Global Stocks News - Sponsored content disseminated on behalf of Alex Metals. On October 27, 2026, Alex Metals (TSXV: ALX) (OTCQB: ALXMF) reported the first batch of drill results from its inaugural drill program at its KSO project in Southeast Alaska.
Alex Metals owns three properties in accessible coastal Southeast Alaska. The Wodski and Frenchie projects lie within the Alexander Triassic Belt, which hosts the world-class 42 million tonne (MT) high-grade Greens Creek and 297 MT Windy Craggy volcanogenic massive sulphide (VMS) deposits.
The KSO Project lies within Proterozoic-age rocks that host numerous early 1900s-era historical VMS mines and noted occurrences. ALX is built with a clear purpose: to discover a new silver-gold-rich VMS deposit in under-explored Southeast Alaska.
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"We staked the KSO project for its potential to host copper-gold-rich VMS mineralization and our first drill holes returned precisely that," stated Gwen Preston, President and CEO in the October 28 press release. "Striking multiple intervals of semimassive to massive sulphide with strong copper and gold grades in a first test of a new target is rare and promising. We are also very pleased to report the discovery of a promising new VMS target within the first few weeks at KSO, which demonstrates the outstanding VMS potential of this seriously under-explored region."
The 2026 first-pass drill program at Khayyam was designed to test below the outcropping massive sulphide to understand the extent, orientation, and style of mineralization. Massive sulphide outcrops include 8 lenses over a 70-metre interval and along 300 metres of strike length.
"The rocks at KSO have undergone a complex structural and metamorphic history, common to Proterozoic VMS belts," stated Nathan Steeves, VP Exploration. "The geology, geochemistry, and geophysical response of each VMS deposit is unique, so exploration methods must be custom-tailored.”
“This first pass exploration program started to test the part of the system visible at surface,” continued Steeves, “But, as importantly, it is helping us understand the metamorphic and structural history of these rocks and build an exploration toolkit for this under-explored region, where we see ample VMS discovery potential."
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Gwen Preston, President and CEO of Alex Metals, holds a B.Sc. in Chemistry from McGill University and a Master of Journalism from UBC. Formerly, she was the CEO of the Resource Maven newsletter, where she spent a decade visiting mine sites, interviewing geologists and producing independent research for a global subscriber base.
On October 28, 2026, Alex Metals published an “explainer video” by Preston that provided detail and context for the company's first full Alaska field season.
“Alex Metals just delivered results from our inaugural drill program at the KSO project in southeast Alaska,” stated Preston in the explainer video. “Six of eight holes returned mineralization, including highlight intervals in four holes. While drilling those holes, we discovered a new VMS target 2 kilometres west with outcropping massive sulphide and indications of scale, including large alteration zones.”
“We staked the KSO project for the opportunity to deliver a new copper-gold-rich VMS discovery, and that’s what we’ve done. To drill into grades and widths like these in the first season at a project while also finding a new strong target is rare and promising.”
“Some great results there feed one of the two goals we had at KSO this season. That first goal: start testing whether the 8 lenses of massive sulphide visible at the surface at the Khayyam target area extend to depth, and therefore have scale. The answer after this initial test: the lenses do extend to depth, though at a different angle than we expected. This area deserves more drilling.”
“Our second goal: learn more about this zone of mineralization at Khayyam so we can explore the rest of this large underexplored VMS region effectively,” continued Preston. “VMS deposits are unique. Each has its own mineralogy, indicators, alteration and geophysical response. If you want to explore a new VMS belt effectively, you have to start by understanding at least one zone of mineralization so you know what you’re looking for.”
“To get good widths of strong copper-gold mineralization across multiple holes in that kind of first effort is promising, both for the potential to find something of scale at the Khayyam target and for our chance of unlocking this whole district.”
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“Over the next few months, we will keep releasing results,” concluded Preston. “We also have results from the rest of the work at KSO, including the new target called Triple G, and results from our work at the Wodski and Frenchie projects about 100 kilometres to the north.”
Triple G Target: A 2025 SkyTEM electromagnetic survey outlined conductive anomalies at both Khayyam and Stumble-On and identified a large new target two kilometres west that was named Triple G.
There are no historical records of mineralization around this target. Alex Metals drilled four holes from two pads to test massive and stringer-style sulphide mineralization at surface and plates modeled from SkyTEM survey data. Results from the Triple G holes are pending.
"While drilling at Khayyam, our team discovered the 'Triple G' VMS target just two kilometres to the west," stated Nathan Steeves, VP Exploration. "Subsequent mapping and prospecting led to the discovery of several outcropping massive sulphide lenses and stringer zones. Outcropping massive sulphide with alteration of scale is exciting to find, and we are keen to do more work at Triple G and around this highly under-explored region."
2026 Exploration Program Update: Alex Metals completed its first-pass 3,058 m drill program at the KSO Project in 2026, with meterage primarily focused on Khayyam where holes were designed to test below outcropping massive sulphide. Today's Khayyam results are the first batch released from the KSO Project. Stumble-On and Triple G drill results are pending.
In addition to drilling during the 2-month program, Alex Metals also completed prospecting, two weeks of mapping, a UAV magnetic and photogrammetry survey, ground and drillhole EM surveys, and soil and channel sampling at KSO. The Company is keen to receive and integrate these data to guide exploration.
The inaugural Wodski Project 2026 exploration program was completed over two months and included 3,138 metres of drilling at the Mad Dog prospect, LiDAR, UAV magnetic and photogrammetry surveys, and mapping and prospecting of key prospects. Wodski results are pending.
Mapping and geophysical surveys at the Frenchie Project on Zarembo Island are still underway. These results will guide an inaugural drill program in 2027.
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The scientific and technical information contained in this news release has been reviewed and approved by Darwin Green, Chairman of the Company, and a Qualified Person under NI 43-101. Mr. Green is not independent of the Company.
Disclaimer: Alex Metals paid Global Stocks News (GSN) $1,750 for the research, writing and dissemination of this content.
Full Disclaimer: GSN researches and fact-checks diligently, but we cannot ensure our publications are free from error. Investing in publicly traded stocks is speculative and carries a high degree of risk. GSN publications may contain forward-looking statements such as “project,” “anticipate,” “expect,” which are based on reasonable expectations, but these statements are imperfect predictors of future events. When compensation has been paid to GSN, the amount and nature of the compensation will be disclosed clearly.
Jim Farley has grand visions for Ford's future built on digital subscriptions and a new EV nobody can buy yet, but the company's own numbers tell a very different story about where things are headed.
Ford’s (NYSE: F | F Price Prediction) earnings report outlined its vision for the future. CEO Jim Farley said, “For me, personally, the most exciting upsell opportunity is really the long-term subscription and digital experience for the customer.” Since there is no evidence this is what drivers want, it is not much to stake the future on. But Farley has had long-term plans that have fallen apart before. His other plan is the Fathom smallish EV, which will not be on the market until next year. Ford thinks it can sell 100,000 in the first year. Of course, there is no reason to think that forecast has any value.
Ford posted good results in the most recently reported quarter. It did so because it is a fossil-fuel vehicle company. Americans are still in love with these. EV sales as a percentage of new car sales in the US are about 6% this year.
Ford points to its F-150 as a key to the future. It is America’s best-selling vehicle and accounts for over a third of Ford’s sales. A full-sized pickup is about as far from an EV as one can get. Ford also pointed to its overseas sales future. It sells very few cars in the EU and China, the two largest car markets other than the US.
Notably, Ford did improve its guidance.
As for its core car business, the WSJ pointed out, “Ford Motor reported lower profit and revenue in the third quarter, pressured by persistent losses in its electric-vehicle unit and softer sales across its gas and hybrid models.”
Revenue fell from $50.5 billion last year to $49.5 billion. EPS dropped from $ 0.61 to $ 0.51. Its EV segment continues to bleed money, with a loss of $1.1 billion, “as the segment continues to optimize first-generation vehicles for profitability….” It also pointed to plans for Fathom and Ford Energy, which may be its one future success.
In the last five years, Ford’s stock is down 30% while the S&P is up 68%. That is the real measure of Farley’s time as CEO. His visions for what comes next for Ford haven’t helped the stock in the past.
Contact [email protected] for any questions or corrections.
Key Takeaways Ford raised its 2026 adjusted EBIT outlook to $10.5-$11B despite commodity headwinds nearing $2.5B.F targets stable 2027 profits and an 8% EBIT margin by 2029, aided by cost cuts and operating efficiencies.F's $28,350 Fathom EV is set for late 2027, while Model e targets breakeven by 2029 amid rising investments.
Ford Motor Company (F - Free Report) emphasized cost discipline, product transformation and diversification during its third-quarter 2026 earnings call, while raising the lower end of its annual profit outlook despite mounting commodity pressures.
Management outlined plans to stabilize profitability in 2027 while investing in affordable electric vehicles, battery storage and higher-margin services. Executives also addressed launch risks, competitive pressures and the timeline for improving EV profitability.
F Raises 2026 Outlook Amid Rising CostsFord raised its 2026 adjusted EBIT guidance to $10.5-$11 billion from $10-$11 billion. The adjusted free cash flow guidance is at $6-$7 billion.
CFO Sherry House said that the outlook incorporates commodity headwinds approaching $2.5 billion, approximately $500 million higher than previously expected. Management maintained its $1-billion material and warranty cost reduction target.
The company reported adjusted earnings of 49 cents per share, beating the Zacks Consensus Estimate of 39 cents. Automotive revenues of $46.08 billion surpassed the consensus estimate of $45.67 billion, while consolidated revenues declined 2% to $49.5 billion.
Ford Targets Stable 2027 Profits Despite InflationCEO Jim Farley said that Ford is targeting 2027 profitability roughly in line with 2026 while pursuing an 8% adjusted EBIT margin by 2029.
Management expects $2 billion in additional commodity, memory and logistics cost pressures next year. Ford plans to offset these through operating efficiencies, revenue optimization and improved manufacturing productivity.
During JPMorgan's questioning, House emphasized that inventory management, product mix and structural savings remain within management's control. She highlighted artificial intelligence tools that align demand forecasting with production planning.
F Details Affordable EV Launch & Profitability TimelineFord's Universal Electric Vehicle platform remains central to its EV turnaround. Farley confirmed that the Fathom, an affordable electric vehicle starting at $28,350, remains scheduled for launch in the fourth quarter of 2027.
Responding to JPMorgan, COO Kumar Galhotra said that 90% of validation testing was complete, with 5,000 unicastings produced. Supplier readiness and production-quality consistency remain important launch priorities.
House told Wolfe Research that Model e profitability improvements will not follow a linear trajectory. Higher investment expenses are expected in 2027, with more substantial improvement beginning in the first half of 2028 as new vehicles and energy operations ramp up. Ford continues targeting Model e breakeven by 2029.
Ford Energy Gains Traction in Battery StorageFord Energy represents another pillar of management's diversification strategy. Farley said that the business remains on schedule to establish 20 gigawatt-hours of annual battery capacity by the end of 2027.
Executed contracts and late-stage customer negotiations collectively cover more than 80% of planned 2028 capacity. Management expects that capacity to be fully committed by the first quarter of 2027.
During Morgan Stanley's questioning, Ford Energy’s president David Carroll clarified that these commitments should not be interpreted as confirmed backlog. He said that formal backlog disclosures would begin next year.
F Expands Services as Commercial Margins Face PressureFord Pro generated $1.7 billion in quarterly EBIT, declining 16%, as higher commodity expenses and temporary Oakville production-launch costs pressured profitability.
House said that favorable commercial demand and pricing support the business's outlook. Ford Pro expects $7 billion in full-year EBIT, while expanded Super Duty capacity creates commercial sales opportunities.
Farley emphasized software, services and parts as increasingly important earnings contributors. House said that these businesses represented approximately 10% of quarterly revenues at attractive margins. BlueCruise, connectivity services and Ford Pro Intelligence supported software growth, while parts benefited from wholesale expansion.
Ford Maintains Focus on Execution & Capital EfficiencyManagement's overall message centered on balancing near-term profitability with substantial investment in new products and manufacturing capabilities.
Farley emphasized that cost competitiveness, operational reliability and disciplined capital allocation remain essential to achieving Ford's 2029 margin objective. Management also acknowledged continued exposure to inflation, geopolitical uncertainty and global competition.
What F's Zacks Rank & Style Scores IndicateFord currently carries a Zacks Rank #4 (Sell), indicating an unfavorable near-term earnings estimate revision outlook. Its Value Score of A, Growth Score of C and Momentum Score of B reflect stronger valuation and momentum characteristics than growth characteristics.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock also has a VGM Score of A, reflecting favorable combined value, growth and momentum characteristics. However, Zacks' framework prioritizes the Rank over Style Scores, making the current combination less favorable despite its strong composite score. The Zacks Rank can change as analysts revise earnings estimates following the latest quarterly results.
Key Takeaways Ford's Q3 adjusted EPS rose 8.9% to 49 cents, beating estimates by 25.64%, despite a 2% revenue decline.Favorable product mix and a 27% rise in Ford Credit pretax earnings supported quarterly results.Ford raised its 2026 adjusted EBIT outlook to $10.5-$11 billion despite rising commodity cost pressures.
Ford Motor (F - Free Report) reported third-quarter 2026 adjusted earnings of 49 cents per share, beating the Zacks Consensus Estimate of 39 cents by 25.64%. Earnings increased 8.9% from 45 cents in the year-ago quarter, supported by favorable product mix and stronger Ford Credit results.
Automotive revenues, excluding Ford Credit, totaled $46.08 billion, down 2.3% year over year but surpassed the Zacks Consensus Estimate of $45.67 billion by 0.9%.
Consolidated revenues declined 2% to $49.5 billion. Global wholesale volumes fell 9% to 1.05 million units, reflecting product discontinuations and supply-related constraints.
Ford currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ford generated adjusted earnings before interest and taxes (EBIT) of $2.7 billion, up 3% year over year. Adjusted EBIT margin expanded 30 basis points to 5.4%, reflecting improved operating efficiency despite lower revenues.
Ford Blue Faces Volume and Commodity PressuresFord Blue revenues declined 3% year over year to $27.1 billion as wholesale volumes fell 10% to 657,000 units. Lower sales reflected discontinued models and disruptions associated with the Middle East conflict. Favorable product mix provided a partial offset.
Segment EBIT decreased 10% to $1.39 billion, while EBIT margin contracted to 5.1% from 5.5%. Higher commodity costs also weighed on profitability.
Demand for higher-margin vehicles remained encouraging. Explorer's Tremor and Platinum trims registered nearly 60% year-to-date sales growth in the United States. F-Series achieved the highest retail share among full-size truck brands during the quarter.
F's Model e Loss Narrows Amid EV RestructuringFord Model e revenues declined 31% to $1.2 billion, with wholesale volumes falling 31% to 34,000 units. The decline reflected the discontinuation of F-150 Lightning and production adjustments for Mustang Mach-E.
The segment reported an EBIT loss of $1.06 billion, narrowing from $1.41 billion a year earlier. However, its EBIT margin deteriorated to negative 86.5% from negative 79.1%, reflecting reduced revenues and continued investments in next-generation products.
Management expects to launch the affordable electric vehicle, Fathom, in the fourth quarter of 2027, with a starting price below $30,000. Ford Energy also remains on track to establish 20 gigawatt-hours of annual battery capacity by the end of 2027.
Ford Pro Sees Higher Sales but Weaker MarginsFord Pro revenues increased 2% year over year to $17.8 billion despite a 4% decline in wholesale volumes to 358,000 units. Favorable product mix, supported by increased truck production, helped offset weaker volumes.
Segment EBIT declined 16% to $1.67 billion, while the EBIT margin contracted to 9.4% from 11.4%. Higher commodity costs, temporary aluminum sourcing expenses and launch costs associated with Super Duty production at Oakville pressured profitability.
The Oakville production ramp exceeded planned daily volume and labor productivity targets. Management also highlighted continued expansion in software services and parts, which together represented approximately 10% of consolidated quarterly revenues.
Ford Credit Business Delivers Strong Earnings GrowthFord Credit generated earnings before taxes of $803 million, which increased 27% year over year. Favorable derivative valuations, higher receivables and a supportive used-vehicle pricing environment contributed to the improvement.
However, U.S. retail loss-to-receivables increased to 0.67% from 0.61% a year earlier, reflecting higher credit loss severity. Used-vehicle auction values declined 3% amid increasing supply.
Cash Flow Strength Supports Capital ReturnsFord generated $5.4 billion in operating cash flow during the quarter, compared with $7.4 billion a year ago. Adjusted free cash flow improved to $4.7 billion from $4.3 billion.
The company ended September with $25.3 billion in cash and $46.4 billion in liquidity. Capital spending totaled $2.3 billion during the quarter. Ford declared a regular quarterly dividend of 15 cents per share, payable Dec. 1 to shareholders of record on Nov. 10.
2026 Earnings OutlookFord raised the lower end of its full-year adjusted EBIT guidance to $10.5-$11 billion from $10-$11 billion. Adjusted free cash flow guidance remained unchanged at $6-$7 billion, while capital spending is expected to be between $9.5 billion and $10.5 billion.
For 2026, management anticipates Ford Blue EBIT of approximately $5.5 billion and Ford Pro EBIT of about $7 billion. Model e is expected to incur losses of approximately $4 billion, while Ford Credit is projected to generate pretax earnings of roughly $2.8 billion.
Ford now expects commodity-related headwinds approaching $2.5 billion, up from slightly more than $2 billion previously. Management also expects U.S. industry pricing to increase approximately 1% year over year and maintains its longer-term target of an 8% adjusted EBIT margin by 2029.
The company remains on track to deliver $1 billion in material and warranty cost reductions in 2026, excluding tariffs and Novelis-related costs.
Other Key Releases From the Auto SpaceGenuine Parts Company (GPC - Free Report) reported third-quarter 2026 adjusted earnings of $2.07 per share, which missed the Zacks Consensus Estimate of $2.09. The bottom line increased 4.5% from $1.98 in the year-ago quarter. Revenues rose 4.2% year over year to $6.52 billion and surpassed the consensus estimate of $6.5 billion. Comparable sales increased 2.9%, led by strong Industrial demand. Genuine Parts ended September with $2.4 billion of liquidity, including $763 million in cash.
General Motors (GM - Free Report) delivered strong third-quarter 2026 results yesterday. Its earnings per share grew 32.2% year over year to $3.70 and topped the Zacks Consensus Estimate of $3.55. Revenues of $50.02 billion increased 3% year over year and outpaced the consensus mark of $48.21 billion. On a further encouraging note, General Motors raised its adjusted automotive free cash flow forecast to $11.5-$12.5 billion from $9.5-$11.5 billion and authorized a $20-billion multi-year share repurchase program.
Tesla (TSLA - Free Report) reported third-quarter 2026 adjusted earnings of 48 cents per share, which beat the Zacks Consensus Estimate of 45 cents by 6.67%. However, earnings declined 4% from 50 cents in the year-ago quarter, reflecting higher operating expenses. Tesla’s revenues totaled $28.05 billion, down marginally from $28.1 billion a year ago. The metric surpassed the Zacks Consensus Estimate of $27.78 billion by 0.96%. Tesla has trimmed its 2026 capital expenditure outlook to approximately $20 billion from $25 billion guided earlier.
Key Takeaways Tesla holds an edge over F after Q3 earnings, backed by stronger demand, margins and robotaxi momentum.TSLA cut its 2026 capex plan to $20B as vehicle deliveries hit 486,532 and auto gross margins rise to 18.5%.F faces $2.5 billion in 2026 commodity headwinds and $4 billion in EV losses, with flat 2027 earnings.
Tesla (TSLA - Free Report) and Ford (F - Free Report) both topped Wall Street’s third-quarter 2026 EPS estimates, but what investors took away from the two reports was quite different. Tesla tackled its biggest overhang by cutting its 2026 capital expenditure plan from $25 billion to $20 billion. Ford tightened its 2026 adjusted EBIT guidance to $10.5 billion-$11 billion, from $10 billion-$11 billion earlier, and said 2027 earnings should be roughly in line with this year’s.
Over the past month, Tesla shares have gained 14% while Ford has lost 1%. With third-quarter results now behind us, which stock is better positioned from here?
Image Source: Zacks Investment Research
The Case for TeslaTesla’s case rests on improving vehicle demand, healthier auto and energy margins and an AI roadmap with measurable milestones, even as high R&D spending weighs on operating profit.
Tesla’s deliveries and order backlog show demand holding up well. The company delivered 486,532 vehicles in its latest reported quarter, its second straight quarter above 480,000 units, and its passenger vehicle order backlog is the highest in four years. Management says demand is running well ahead of production, largely helped by rising FSD adoption. More than 75% of new North American deliveries included a paid FSD subscription at delivery. Recently, Latvia approved FSD, making it the 10th EU country to do so, according to Teslarati.
Gross margins are following volume. Automotive gross margin rose to 18.5% from 17% a year earlier. Energy storage deployments reached 13.7 GWh, up 10% year over year, while energy gross margin climbed to 33.1% from 20.4% in the second quarter of 2026. With CEO Elon Musk saying Megapack supply for 2027 is almost sold out, this business has strong forward visibility.
The AI story now has progress to show. Tesla began deploying Cybercabs in Austin in September 2026, and Musk says the fleet there has grown tenfold in roughly a month. Cumulative unsupervised Robotaxi miles rose eightfold sequentially to nearly 2 million. Management expects Robotaxi to contribute more meaningfully to revenues from next year.
The weak spot is operating profit, which contracted as R&D costs rose. It is expected to keep declining year over year in the coming quarters as Tesla funds its next growth cycle, and supply chain challenges persist. Still, the pressure is investment-led rather than demand-led. With strong demand, recovering gross margins, a return to positive free cash flow and tangible AI milestones, the narrative is getting stronger.
The Case for FordFord’s case rests on long-term franchise strength, but the near-term numbers are under pressure across all three of its segments.
The foundation is solid. Ford leads in trucks and SUVs, is expanding Super Duty capacity and is growing its software and parts businesses. Hybrid demand, an affordable EV platform and Ford Energy add runway, but these are long-term supports that do little for the near term.
The latest quarterly results showed the strain. At Ford Blue, wholesale units, revenues, EBIT and EBIT margin all declined. Discontinued models and disruptions linked to the Middle East conflict cut sales, and higher commodity costs weighed on profitability.
Ford Pro, a key earnings contributor, also saw margins slip. Third-quarter EBIT fell 16% year over year to $1.7 billion, and EBIT margin contracted to 9.4% from 11.4%. Management trimmed its full-year Ford Pro EBIT outlook to about $7 billion from $7-$7.5 billion earlier.
Ford Model e unit remains the biggest drag, with a $1.1 billion third-quarter EBIT loss, though $352 million narrower than a year ago. Revenues fell as the F-150 Lightning ended and Mach-E output dropped. Ford expects about $4 billion in 2026 losses, and higher 2027 spending on the Universal EV platform and Ford Energy pushes meaningful improvement to 2028.
Costs are the other worry. Commodity headwinds are now expected to approach $2.5 billion in 2026, about $500 million more than the earlier guidance, and higher fuel prices are lifting freight and energy costs. Ford expects U.S. industry pricing to rise about 100 basis points, but sustained inflation could absorb that benefit. Tariff uncertainty adds to the risk, and management sees about $2 billion of combined commodity, memory and logistics headwinds in 2027, which will require further efficiency gains to protect earnings.
Our Take: TSLA Has an Upper Hand NowTesla’s profit pressure comes from investing in growth but Ford’s comes from forces it can’t fully control. Tesla is spending more on R&D to build robotaxi and AI revenue streams, and it has already trimmed capex to protect cash flow. Ford’s pressure comes from outside its control, including commodities, tariffs and a loss-making EV unit that will not turn around before 2028.
Tesla’s demand, backlog and energy visibility suggest earnings growth next year. Ford is guiding to flat 2027 earnings, with fresh cost headwinds still to absorb.
Momentum in the business is building at Tesla, while Ford’s near-term stays clouded by cost pressure and EV losses. As such, Tesla looks better placed from here.
While Tesla currently carries a Zacks Rank #3 (Hold), Ford carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The GM logo is displayed at the new location of the General Motors Headquarters in Detroit, Michigan, U.S., January 12, 2026. REUTERS/Rebecca Cook/File Photo Purchase Licensing Rights, opens new tab
CompaniesOct 29 (Reuters) - General Motors (GM.N), opens new tab will pay $220 million to settle allegations that it illegally sold drivers' private behavior and location data to brokers, who then sold the information to insurers that used it to set and sometimes increase rates.
The settlement, announced on Thursday, resolves claims by the attorneys general of 35 US states and the District of Columbia over the automaker's Smart Driver program, which enrolled millions of drivers between 2016 and its discontinuation in 2024. Other regulators have also reviewed GM's handling of driver data.
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GM was accused of pitching Smart Driver to help people improve their personal driving safety, only to violate drivers' privacy by reneging on its promise not to sell their data without permission. Many people who signed up were also enrolled in GM's OnStar safety, navigation and diagnostic service.
"People bought a car, not a tracking device," Oregon Attorney General Dan Rayfield said in a statement. Rayfield's office and the office of Washington Attorney General Nick Brown led the bipartisan state coalition.
The settlement also requires GM to limit driving data it collects, and obtain drivers' express consent before collecting or sharing that data.
A GM spokesperson said the settlement reinforces other steps the Detroit automaker has taken to strengthen privacy.
"Safer, more helpful and personalized experiences are enabled by connected vehicle data, and GM is committed to being clear about what information is used, how it’s protected, and the choices customers have about what they share," the spokesperson said.
Insurers such as Allstate (ALL.N), opens new tab, Progressive (PGR.N), opens new tab and Berkshire Hathaway's (BRKa.N), opens new tab Geico use so-called telematics in monitoring drivers' habits. They say the technology rewards good driving through lower premiums.
The settlement follows GM's agreement in May to pay $12.75 million to settle a California investigation into its alleged sale of driver data to two data brokers.
In January 2025, GM agreed with the US Federal Trade Commission not to disclose vehicle geolocation and driver behavior data to consumer reporting agencies for five years.
Reporting by Jonathan Stempel in New York; Additional reporting by Kalea Hall in Detroit; Editing by Franklin Paul and David Gaffen
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General Motors Co. (NYSE:GM) stock climbed on Thursday as market participants continued buying following Tuesday’s announcement that the automaker will transfer its stock listing from the New York Stock Exchange to the Nasdaq Global Select Market.
• General Motors shares are climbing with conviction. What’s behind GM gains?
The move comes as broader markets retreated, with the Nasdaq falling 1.42% and the S&P 500 shedding 0.42%, while the Consumer Discretionary sector gained 0.8%.
GM said its stock will trade on the NYSE through Nov. 16, before starting on Nasdaq on Nov. 17 under the symbol “GM”. The transition requires no action from existing stockholders.
Nasdaq-100 Index EligibilityThe listing shift makes General Motors eligible for potential inclusion in the Nasdaq-100 Index, an index that tracks 100 of the largest nonfinancial companies on Nasdaq. Inclusion could prompt index-tracking funds to purchase the stock, although eligibility does not guarantee a spot.
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GM CFO Paul Jacobson stated the exchange transfer aligns with the company’s customer-focused, technology-driven strategy and efforts to create long-term shareholder value, while recognizing GM’s longstanding relationship with the NYSE.
Earnings and Financial OutlookThe transfer follows GM’s third-quarter results on Oct. 20, where revenue rose 2.9% year over year to $50.02 billion, exceeding expectations of $48.70 billion. Adjusted earnings reached $3.70 per share, topping estimates of $3.63.
The automaker narrowed its full-year 2026 adjusted earnings outlook to $12.75–$13.75 per share, compared to Wall Street’s $13.41 consensus, while managing cost pressures and authorizing a $20 billion stock repurchase program.
Technical AnalysisFrom a trend perspective, GM is trading above all the major moving averages, sitting about 5.9% above the 20-day SMA ($80.88) and about 6.3% above the 200-day SMA ($80.54), which keeps the longer-term bias pointed up. The catch is the 20-day SMA remains below the 50-day SMA ($83.07), a short-term bearish crossover that suggests the stock is still working through the after-effects of the prior pullback even as price recovers.
Key Resistance: $88 — Nearby round-number area where rebounds can stall, sitting just above the current price and below the $91.85 52-week high. Key Support: $83 — Nearby pivot area that lines up closely with the 50-day SMA ($83.07), making it a practical "line in the sand" for dip buyers. GM Stock Price Activity: General Motors shares were up 3.41% at $85.30 at the time of publication on Thursday, according to Benzinga Pro data.
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Photo: Formatoriginal via Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Key Takeaways GE Aerospace plans to invest over $1 billion in global MRO facilities over five years.LEAP shop visit volume rose over 40% year over year, while turnaround time fell by two weeks.Costs rose 17.2% to $9.1 billion, while operating profit margin fell 80 basis points to 19.9%.
GE Aerospace (GE - Free Report) continues to invest heavily in expanding its manufacturing and maintenance, repair and overhaul (MRO) capabilities to capitalize on growing demand for engines and services. However, rising costs and expenses remain a concern, putting pressure on the company's profitability.
GE Aerospace plans to invest more than $1 billion over the next five years to expand its global MRO facilities. In 2025, the company invested $1 billion in U.S. manufacturing and technology and plans to invest another $1 billion in 2026. It also intends to invest more than €110 million across its European manufacturing facilities in 2026.
In the third quarter of 2026, GE Aerospace agreed to acquire Consolidated Precision Products for $11.75 billion to expand capacity for mission-critical castings. The deal is expected to close in the second half of 2027.
These investments are supporting aftermarket growth. During the third quarter, LEAP internal shop visit volume increased more than 40% year over year, while turnaround time declined by roughly two weeks. However, expanding production and service capabilities requires substantial spending.
In the third quarter of 2026, GE Aerospace's cost of sales increased 17.2% year over year to $9.1 billion. The company’s research and development expenses rose 10.4% to $458 million. As a result, GE’s operating profit margin contracted 80 basis points to 19.9%.
Higher production activity, unfavorable product mix and persistent inflation continue to weigh on profitability. If costs remain elevated, it is likely to hurt the company’s bottom line and margins in the quarters ahead.
Peer’s Margin performanceTextron Inc.’s (TXT - Free Report) cost of sales rose 4.2% year over year to $3.09 billion in second-quarter 2026. Textron’s gross profit margin declined 100 bps to 17.8% in the quarter. The decline in Textron’s margin was due to reduced margin in the Bell segment.
RTX Corporation’s (RTX - Free Report) costs and expenses increased 8.8% year over year to $21.79 billion in third-quarter 2026. Despite the rise in costs, RTX Corp.’s adjusted operating profit margin expanded 310 basis points (bps) to 15.2% in the quarter. RTX is benefiting from rising aerospace deliveries, growing aftermarket revenues and declining geared turbofan (GTF) engine-related cash costs.
GE's Price Performance, Valuation and EstimatesShares of GE Aerospace have gained 3.9% in the past six months against the industry’s 10.9% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 33.19X, above the industry’s average of 27.24X. GE Aerospace carries a Value Score of D.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for GE’s 2026 earnings has gone up 3.4% over the past 60 days.
Image Source: Zacks Investment Research
The company currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Xerox Holdings Corporation (XRX) Q3 2026 Earnings Call October 29, 2026 8:00 AM EDT
Company Participants
Gregory Stein - Vice President of Investor Relations
Louie Pastor - CEO & Director
Chuck Butler - Executive VP & CFO
Conference Call Participants
Marc Vitenzon - JPMorgan Chase & Co, Research Division
Ananda Baruah - Loop Capital Markets LLC, Research Division
Asiya Merchant - Citigroup Inc., Research Division
Michael Kupinski - NOBLE Capital Markets, Inc., Research Division
Presentation
Operator
Welcome to the Xerox Holdings Corporation Third Quarter 2026 Earnings Release Conference Call. [Operator Instructions]
At this time, I would like to turn the meeting over to Mr. Greg Stein, Senior Vice President and Head of Investor Relations. Please go ahead, sir.
Gregory Stein
Vice President of Investor Relations
Good morning, everyone. I'm Greg Stein, Senior Vice President and Head of Investor Relations at Xerox Holdings Corporation.
Welcome to the Xerox Holdings Corporation Third Quarter 2026 Earnings Release Conference Call, hosted by Louis Pastor, Chief Executive Officer. He is joined by Chuck Butler, Chief Financial Officer.
At the request of Xerox Holdings Corporation, today's conference call is being recorded. Other recording and/or rebroadcasting of this call are prohibited without the express permission of Xerox.
During this call, Xerox executives will refer to slides that are available on the web at www.xerox.com/investor and will make comments that contain forward-looking statements, which, by their nature, address matters that are in the future and are uncertain. Actual future financial results may be materially different than those expressed herein.
At this time, I'd like to turn the meeting over to Mr. Pastor.
Louie Pastor
CEO & Director
Good morning, and thank you for joining our Q3 2026 earnings call. I'll start with the most important news. Today, we are lowering our full-year adjusted operating income and free cash flow guidance, and our Board has suspended our
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The analysis is provided exclusively for informational purposes and should not be considered professional investment advice. Before investing, please conduct personal in-depth research and utmost due diligence, as there are many risks associated with the trade, including capital loss.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Shares of Norwegian Cruise Line Holdings surged about 13% Thursday after the company posted better-than-expected third-quarter earnings and raised its outlook for the full year.
The cruise line reported third-quarter revenue of $2.95 billion, topping Wall Street expectations of $2.88 billion, according to analyst estimates from LSEG.
Net income for the period was $491 million, or $1.07 per share.
Adjusted earnings before interest, taxes, depreciation and amortization was $937 million, which exceeded Norwegian's previous guidance of $874 million. Adjusted EPS was $1.12, exceeding previous guidance of 90 cents and outpacing analysts' expectations of 94 cents, per LSEG.
Norwegian also raised its full-year guidance, citing its stronger-than-expected third-quarter performance. The company now expects 2026 adjusted EBITDA of $2.55 billion and adjusted EPS of about $1.70.
The report said the company's bookings had "improved modestly" since its last report but remain below its optimal range.
Norwegian said it will emphasize new marketing strategies, including the launch of a new marketing platform in January. It also said it anticipates that enhancements such as a new waterpark at its Great Stirrup Cay private island will support stronger demand.
Also on Thursday, Norwegian announced that Chief Financial Officer Mark Kempa will step down after more than 25 years at the company. Meghan Montana, currently chief strategy officer, will take over the role starting Jan. 1.
Key Takeaways Norwegian Cruise's Q3 earnings beat estimates at $1.12 per share, while revenues rose 0.3% to $2.95 billion.NCLH's onboard revenues grew 12.7%, while adjusted cruise costs excluding fuel per Capacity Day fell 2.2%.NCLH raised its 2026 adjusted EPS outlook to $1.7 and EBITDA guidance to $2.55 billion.
Norwegian Cruise Line Holdings Ltd. (NCLH - Free Report) reported third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The top line increased while the bottom line fell from the prior-year quarter’s figure.
Following the results, the company’s shares gained approximately 8% in the pre-market trading session. The positive investor sentiment likely reflected growing confidence in Norwegian Cruise’s turnaround strategy, underscored by better-than-expected quarterly performance and continued improvements in operating efficiency. Moreover, management’s focus on strengthening brand positioning, enhancing marketing effectiveness and implementing disciplined revenue management strategies is expected to support its long-term growth prospects.
NCLH’s Q3 Earnings & RevenuesNorwegian Cruise reported adjusted earnings per share of $1.12, beating the Zacks Consensus Estimate of 93 cents. In the prior-year quarter, the company reported adjusted earnings of $1.2 per share.
Quarterly revenues of $2.95 billion surpassed the consensus mark of $2.88 billion. The metric increased 0.3% year over year.
Passenger ticket revenues were $1.95 billion, down 5.1% from $2.05 billion reported in the prior-year quarter. Our model anticipated passenger ticket revenues to be $2.05 billion.
Onboard and other revenues increased 12.7% to $1 billion from $888.2 million reported in the year-ago quarter. We expected onboard and other revenues to be $834.6 million.
Capacity Days rose 5.4% year over year to 6.77 million, while Passenger Cruise Days increased 5.5% to 7.20 million.
NCLH’s Q3 Expenses & Operating ResultsTotal cruise operating expenses in the third quarter increased 7.3% year over year to $1.67 billion. Our model anticipated total cruise operating expenses to be $1.61 billion.
Payroll and related expenses rose 9.8% year over year to $390.3 million. Fuel expense increased 11.3% year over year to $195.7 million.
During the third quarter, gross cruise costs per Capacity Day were approximately $301 compared with $302 reported in the prior-year period. Adjusted net cruise costs excluding fuel per Capacity Day declined 2.2% year over year to $152.28.
Gross margin per Capacity Day declined 16.7% year over year to $149.67. Net Yield declined 6.5% on a reported basis and 6.7% on a constant-currency basis. The constant-currency decline was better than management's guidance for a decrease of 8.9%.
Adjusted EBITDA declined 8.1% year over year to $936.8 million but exceeded management's guidance of approximately $874 million. Operating income declined 16.7% year over year to $624.3 million.
Net interest expenses declined to $170.5 million from $328.8 million reported in the prior-year quarter.
NCLH’s Balance SheetAs of Sept. 30, 2026, the company had cash and cash equivalents of $256.5 million, up 22.2% from $209.9 million at the end of 2025. Long-term debt, excluding the current portion, was $13.95 billion compared with $13.73 billion at 2025-end.
Net debt totaled $14.83 billion, while net leverage ended the quarter at 5.5 times.
Following quarter-end, the company issued $950 million of senior notes due 2031 and expanded its revolving loan facility. Pro forma liquidity as of Sept. 30, 2026, totaled approximately $2.1 billion, including $1.8 billion of availability under the revolving loan facility.
For the first nine months of 2026, net cash provided by operating activities increased 4.6% year over year to $1.71 billion. Additions to property and equipment totaled $2.29 billion compared with $2.82 billion in the prior-year period.
Booking UpdateThe company's booked position for the next 12 months improved modestly since the previous earnings release but remained below its optimal range.
Third-quarter occupancy came in at 106.5% compared with 106.4% in the prior-year quarter.
Advance ticket sales stood at $3.14 billion as of Sept. 30, 2026, compared with $3.2 billion at the end of 2025.
For the first half of 2027, pricing is ahead of year-ago levels, although the booked position remains below the comparable prior-year level. For the second half, pricing is ahead, while the booked position is in line with the year-ago period.
Norwegian Cruise expects the recently opened Great Tides Waterpark at Great Stirrup Cay, improved marketing initiatives and revenue management capabilities to support demand and strengthen booking trends.
NCLH’s Q4 & 2026 GuidanceFor fourth-quarter 2026, NCLH anticipates occupancy of approximately 100% and Capacity Days of 6.43 million.
Constant-currency Net Yield is expected to decline 6.5% year over year. Adjusted net cruise costs excluding fuel per Capacity Day are projected to increase 1.7% on a constant-currency basis.
Adjusted EBITDA is expected to be $414 million. Adjusted net loss is projected at $55 million, while adjusted loss is forecast at 12 cents per share.
For 2026, the company expects occupancy of approximately 103.2%. Capacity Days are anticipated to be approximately 26.18 million.
Full-year constant-currency Net Yield is expected to decline approximately 4.4%, while adjusted net cruise costs excluding fuel per Capacity Day are projected to decline 0.4%.
Management raised its full-year adjusted EBITDA guidance to approximately $2.55 billion from the prior expectation of $2.5 billion. Adjusted net income is projected at nearly $789 million, while adjusted earnings are anticipated at approximately $1.7 per share, up from the previous outlook of $1.5.
Looking ahead to 2027, Norwegian Cruise expects Net Yield growth of 1-2%, with meaningful acceleration anticipated in the second half of the year.
NCLH’s Zacks Rank & Key PicksNorwegian Cruise currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Consumer-Discretionary sector are Cinemark Holdings, Inc. (CNK - Free Report) , AMC Entertainment Holdings, Inc. (AMC - Free Report) and Marriott International, Inc. (MAR - Free Report) .
Cinemark presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Cinemark delivered a trailing four-quarter earnings surprise of 10.9%, on average. The stock has surged 67.9% in the year-to-date period. The Zacks Consensus Estimate for CNK’s 2026 sales and EPS implies growth of 17.7% and 155.8%, respectively, from the year-ago levels.
AMC Entertainment presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 321.7%, on average. The stock has rallied 91.7% in the year-to-date period.
The Zacks Consensus Estimate for AMC’s 2026 sales and EPS indicates an increase of 18.8% and 91.7%, respectively, from the year-ago levels.
Marriott currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings beat of 2.5%, on average. The stock has gained 27.1% in the year-to-date period.
The Zacks Consensus Estimate for MAR’s 2026 sales and EPS indicates growth of 6.6% and 17.2%, respectively, from the year-ago period’s levels.
The soda has gone flat in 2026, so to speak, as shares of PepsiCo (PEP +0.39%) are trading down about 14% over the past six months. The beverage and snack company's third-quarter results weren't bad. Still, management cut its full-year guidance for adjusted earnings per share, as North American sales aren't recovering as quickly as anticipated.
PEP PepsiCo$133.15+$0.52 (+0.39%)
NASDAQ · As of 1:33 PM ET 10/29/26
Earlier in the year, PepsiCo cut prices on some of its core brands, such as Lay's and Doritos, by up to 15%. This price reduction was to lure value-sensitive consumers back to Pepsi's top products. Now, management is changing its tune and plans to raise prices modestly in 2027. This has the potential to hurt sales again.
Other headwinds include higher prices across the supply chain due to inflation, tariffs, and increased transportation costs. All of these challenges have caused the stock to fall over the past year, but there is a case to be made for patient investors.
Image source: Getty Images.
PepsiCo's international business is performing well, and the reduced guidance sets a lower bar for the company to clear next quarter. As for the stock itself, the metrics look reasonable. The stock is trading at approximately 15 times forward earnings, and has a price-to-sales ratio slightly under 2. Both suggest the stock is fairly priced.
PepsiCo is a Dividend King, which is a stock that has increased its dividend for at least 50 consecutive years. The company's current dividend yield is more than 4%. For income-focused investors, or those willing to patiently wait out the tough macroeconomic headwinds, PepsiCo is a solid defensive consumer goods stock.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Key Takeaways PepsiCo's diversified food and beverage portfolio contrasts with Coca-Cola's beverage-focused global business.Coca-Cola posted 7% Q3 revenue growth and margin expansion, while PepsiCo faced profitability pressures.PepsiCo trades at a lower forward P/E of 15.43X versus Coca-Cola's 26.32X, reflecting a notable valuation gap.
The rivalry between PepsiCo, Inc. (PEP - Free Report) and The Coca-Cola Company (KO - Free Report) remains one of the fiercest battles in the consumer staples industry. Both companies command formidable market positions, backed by iconic brands, extensive distribution networks and strong consumer loyalty. While Coca-Cola dominates the global carbonated soft drinks market, PepsiCo boasts a diversified portfolio spanning beverages and convenient foods, creating distinct competitive advantages.
Coca-Cola's beverage-focused business, featuring brands like Coca-Cola, Sprite and Fanta, benefits from its global reach, brand strength and extensive bottling network. Conversely, PepsiCo combines popular beverages like Pepsi, Mountain Dew and Gatorade with leading snack brands, including Lay's, Doritos and Cheetos. This diversification lets PepsiCo tap multiple consumption occasions, while Coca-Cola leverages its beverage expertise to defend market share.
As consumer preferences evolve and competition intensifies, which of these industry heavyweights is better-positioned to sustain market leadership and reward investors? Let us find out.
The Case for PEPPepsiCo maintains a formidable position in the global food-and-beverage industry, supported by its diversified portfolio, extensive distribution network and iconic brands like Pepsi, Gatorade, Mountain Dew, Lay's and Doritos. Its partnership with Celsius Holdings commands nearly 20% of the energy-drink category, strengthening its presence in high-growth segments. However, intensifying competition, shifting consumer preferences and sluggish demand in North America are creating near-term challenges, particularly in carbonated soft drinks.
PepsiCo is repositioning its portfolio toward functional hydration, zero-sugar beverages, protein-rich snacks and portion-controlled offerings to appeal to health-conscious and value-seeking consumers. Propel generates more than $1 billion in estimated annual retail sales, while portion-control multipacks exceed $3.5 billion in annual revenues. Digital marketing, automation and productivity initiatives support its competitive strategy. Nevertheless, increased advertising investments, affordability initiatives and persistent volume pressures could weigh on near-term profitability.
In third-quarter 2026, net revenues increased 5.6%, supported by 8% international organic revenue growth. However, the core operating margin contracted 35 basis points, while North American beverage organic revenues declined slightly. Management also lowered its 2026 core constant-currency EPS growth outlook to 1-2%, signaling continued margin pressures and a challenging near-term operating environment.
The Case for KOCoca-Cola presents a compelling investment case, supported by its commanding global beverage presence, extensive bottling network and portfolio of 32 billion-dollar brands. Operating across more than 200 countries and territories, Coca-Cola continues to strengthen its competitive position, achieving 22 consecutive quarters of global value-share gains.
Its diversified portfolio, featuring Coca-Cola, Sprite, Fanta, Powerade, fairlife and smartwater, caters to evolving consumer preferences. Coca-Cola Zero Sugar's 16% volume growth in third-quarter 2026 underscores its success in capturing health-conscious consumers.
Coca-Cola's strategic emphasis on affordability, premiumization and localized innovation supports consumer recruitment and market penetration. Digital capabilities, AI-powered marketing, connected packaging and targeted campaigns strengthen engagement, particularly among younger consumers. Its FIFA World Cup activations and Fanta Halloween campaigns demonstrate effective brand positioning. However, geopolitical uncertainties, unfavorable geographic mix and cost inflation remain concerning.
The company’s third-quarter 2026 net revenues increased 7% to $13.4 billion, with organic revenues advancing 7% and global unit case volume rising 5%. The comparable operating margin expanded 100 basis points to 32.9%, while comparable EPS climbed 11% to 91 cents. Management expects at least 5% organic revenue growth and 11% comparable EPS growth for 2026, reinforcing its resilient outlook.
Price Performance & Valuation of PEP & KOShares of Coca-Cola have rallied 33% in the past year against PepsiCo’s decline of 10.1%. Coca-Cola has significantly outperformed PepsiCo over the past year, reflecting stronger investor confidence in its business resilience, brand strength and growth prospects. KO's impressive share-price rally underscores its ability to navigate challenging market conditions while sustaining revenue growth, market-share gains and profitability.
Image Source: Zacks Investment Research
From a valuation perspective, PEP is trading at a forward price-to-earnings (P/E) multiple of 15.43X, significantly below Coca-Cola’s 26.32X. Although Coca-Cola trades at a premium valuation compared with PepsiCo, its superior operating momentum, consistent earnings growth and robust market positioning help justify the higher multiple.
Image Source: Zacks Investment Research
Conversely, PepsiCo's discounted valuation may appeal to value-oriented investors, but sluggish North American demand, margin pressures and subdued earnings prospects remain concerning. Overall, Coca-Cola appears better-positioned to sustain investor confidence and command a valuation premium.
How Does Zacks Consensus Estimate Compare for PEP & KO?Coca-Cola’s EPS estimates for 2026 have moved up by a penny in the past 30 days, while the EPS estimate for 2027 has been unchanged. KO’s 2026 revenues and EPS are expected to increase 4.2% and 10% year over year to $49.9 billion and $3.30 per share, respectively.
Image Source: Zacks Investment Research
PepsiCo’s EPS estimate for 2026 and 2027 edged down 0.2% and 0.5%, respectively, in the last seven days. PEP’s 2026 revenues and EPS are projected to increase 5.7% and 3.4% year over year to $99.3 billion and $8.42 per share, respectively.
Image Source: Zacks Investment Research
PEP vs. KO: Which Stock Emerges as the Winner?Both PepsiCo and Coca-Cola remain formidable players in the consumer staples space, supported by strong brand portfolios, extensive global reach and strategic growth initiatives. However, Coca-Cola emerges as the clear winner, backed by its superior stock-price performance, stronger earnings growth prospects and favorable estimate revisions.
Coca-Cola's consistent market-share gains, robust volume growth and expanding margins underscore its operational strength and ability to navigate a challenging consumer environment. Its focus on innovation, premiumization and digital engagement further reinforces its long-term growth potential. Moreover, the upward revision in its earnings estimates signals improving analyst confidence, contrasting with PepsiCo's downward revisions amid persistent North American headwinds.
While PepsiCo's lower valuation offers an attractive entry point, its near-term margin pressures and subdued earnings outlook warrant caution. Coca-Cola's premium valuation, meanwhile, reflects investor confidence in its resilient business model, sustained growth momentum and earnings visibility, making KO the more compelling investment choice. PEP currently has a Zacks Rank #4 (Sell), while KO carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intel heads into its quarterly earnings report carrying a fresh foundry wound, a slide in Big Tech results, and analysts who think the stock is still too expensive. Whether management can name real outside customers tonight may determine if the…
A foundry setback and a rough night for Big Tech earnings are piling pressure on Intel (NASDAQ:INTC | INTC Price Prediction) hours before its own quarterly report. Intel stock is at $92.04, down 4% in recent trading. The slide adds to a 20% drop over the past month, which followed a powerful run earlier in the year.
Intel’s decline is steeper than its sector’s. The VanEck Semiconductor ETF (NASDAQ:SMH), a fund concentrated in chipmakers, is at $561.62, down 1.1%. At the same time, the Invesco QQQ Trust (NASDAQ:QQQ) is at $714.93, down 1.5%, falling harder than the chip fund as Big Tech earnings weigh on large-cap stocks.
Terafab’s Talks With Taiwan Semiconductor Cloud Intel’s Foundry Story The latest blow landed on October 29, when Elon Musk’s Terafab chip initiative confirmed it’s in active discussions with Taiwan Semiconductor Manufacturing about a dedicated fabrication plant to supply chips for Musk’s companies. That undermines Intel’s earlier positioning as a central foundry partner for the project.
Big outside customers matter because Intel Foundry is still losing money. In Q2 2026, Intel Foundry’s revenue rose 31% to $5.76 billion, while the unit ran a $2.1 billion quarterly operating loss.
Cautious Analyst Previews Set the Stage for Intel’s Report Intel reports Q3 2026 results after the closing bell, a date the company has confirmed. Bernstein modeled Intel’s Q4 2026 revenue below Street consensus, citing PC market weakness and estimating third-quarter PC shipments were down 20% to 22% year over year. Wedbush noted that Taiwan Semiconductor may raise prices on its Chip-on-Wafer-on-Substrate (CoWoS) advanced packaging by 10% to 20%, which the firm views as a renewed supply chain constraint and a reduced competitive opportunity for Intel. JPMorgan, which recently upgraded Intel to Neutral, carries an $85 price target that sits below the current share price.
Alphabet and Microsoft Results Drag Chip Stocks Lower After the close on October 28, Alphabet (NASDAQ:GOOGL) reported Q3 2026 revenue of $127.58 billion, up 24.6% year over year and slightly missing expectations. Alphabet stock is at $284.82, down 12%. The company earned $2.12 per share, missing the $2.97 consensus, after an $8.7 billion loss on equity securities that Alphabet disclosed reduced diluted earnings by $0.55 per share.
Without that one-time hit, Alphabet’s quarter centered on AI demand. Google Cloud revenue jumped 103% to $30.71 billion, helped by sales of its custom tensor processing unit (TPU) systems, and CEO Sundar Pichai said, “We’re also seeing strong demand for our TPU systems across a wide range of customers.” Spending is the catch: Alphabet’s capital expenditures reached $51.36 billion and its free cash flow turned negative at $9.07 billion, renewing worries about AI infrastructure costs (we covered seven suppliers supporting that expansion, from power to cooling, in a free report).
Meanwhile, Microsoft (NASDAQ:MSFT) stock is at $524.40, down 1%. Microsoft’s Q1 FY2027 revenue rose 18.8% to $92.28 billion, and its adjusted earnings of $4.89 per share beat the $4.72 consensus. For Intel, the sore spot is the PC outlook, since Microsoft guided its Windows original equipment manufacturer (OEM) and devices revenue to decline by a percentage in the mid-30s in Q2 FY2027.
Chip stocks including Intel declined on Samsung’s profit miss and the heavy capital spending disclosed by Microsoft and Alphabet. That combination leaves Intel absorbing both AI spending worries and a weaker PC backdrop.
Why Intel’s Business Model Stands Apart From Google and Microsoft Intel designs and manufactures its own chips, from Xeon server processors to Core Ultra PC chips, and wants to sell factory capacity on its 18A process to outside customers. Google runs search, YouTube and a fast-growing cloud on TPU silicon it designs in-house for its AI workloads. Microsoft rents out Azure capacity built on third-party graphics processing units and, increasingly, its own chip designs, and it’s a potential but unconfirmed Intel foundry customer. In this trio, Intel is the supplier hoping the other two turn into buyers.
What Intel’s Q3 Report Has to Prove About Its Foundry When Intel reports after the close, the key question is whether management can name new outside foundry customers. Intel’s Q2 2026 results offer some encouragement, with revenue growing 25.4% to $16.13 billion and data center and AI sales rising 59%. Bearish arguments for Intel center on the Terafab talks, a loss-making foundry unit and a softer PC market. Traders may prefer to keep their exposure smaller until the question of Intel’s foundry pipeline resolves.
Contact [email protected] for any questions or corrections.
Key Takeaways SHOP's merchant retention hits 97% for sellers reaching $10M in annual GMV, helping sustain revenue growth.Shopify's Q2 2026 GMV rose 32% to $115.57B, while revenues gained 34% to $3.58B YoY.Commerce.com's net revenue retention hit 95.8%, and Adobe Commerce's loyalty tools could challenge Shopify.
Shopify Inc. (SHOP - Free Report) is benefiting from strong merchant retention, which is strengthening revenue durability as successful businesses expand sales and adopt additional services across its unified commerce platform.
Over the past five years, merchants reaching $1 million in annual gross merchandise volume (GMV) recorded 92% retention, rising to 97% among those reaching $10 million. These figures highlight Shopify's ability to retain higher-value merchants as they scale, preserving subscription relationships and transaction activity.
The benefits compound as merchants mature. Shopify's first-quarter 2015 merchant cohort now generates five times its initial quarterly GMV, while revenues from that cohort have grown 3.3 times. Adoption of Shopify Payments, point-of-sale and business-to-business capabilities embeds merchants deeper into the platform and creates cross-selling opportunities.
In second-quarter 2026, GMV increased 32% year over year to $115.57 billion, while revenues rose 34% to $3.58 billion. Merchant Solutions revenues climbed 37%, supported by transaction growth and Shopify Payments penetration of 68%. Monthly recurring revenues increased 19% to $221 million, reflecting continued demand across subscription plans.
High retention also allows Shopify to expand revenues from existing merchants without depending solely on new sign-ups. The Zacks Consensus Estimate projects revenues to increase 31.48% year over year in 2026, reflecting expectations of robust business momentum. Thus, Shopify's high merchant retention should help sustain revenue growth over time.
SHOP's Merchant Retention Faces Growing CompetitionCommerce.com (CMRC - Free Report) , parent of BigCommerce, competes with an open SaaS platform serving B2B and B2C merchants. Commerce.com's net revenue retention improved to 95.8% in second-quarter 2026 from 94.5% a year earlier, reflecting better revenue retention and expansion among existing customers. Commerce.com's AI-driven tools and flexible integrations could help defend merchant relationships.
Adobe (ADBE - Free Report) competes through Adobe Commerce, which combines customizable stores, loyalty programs and personalized promotions. These features help retailers encourage repeat purchases and give them more reasons to stay with the platform. Adobe's broader customer-experience ecosystem could deepen enterprise merchant relationships, challenging Shopify's retention among larger brands.
SHOP’s Price Performance, Valuation & EstimatesSHOP’s shares have gained 37.4% over the past three months, outperforming the Zacks Computer and Technology sector, which has advanced 5.4%.
SHOP’s 3-Month Price Performance
Image Source: Zacks Investment Research
Shopify stock is trading at a forward 12-month P/S ratio of 11.85X, higher than the sector’s average of 5.57X. SHOP has a Value Score of F.
SHOP’s Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SHOP’s 2026 earnings is currently pegged at $1.89 per share and has remained stable over the past 30 days. The estimate implies a solid 61.54% year-over-year earnings growth.
Image Source: Zacks Investment Research
SHOP currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways FDXF is set to report transition-period results on Oct. 29, with earnings estimated at $1.38 per share.Robust pricing execution are expected to boost FDXF's adjusted operating margin by 200 bps.FDXF expects operational efficiencies to add 80 bps to margins, while its Earnings ESP stands at 5.07%.
FedEx Freight (FDXF - Free Report) is scheduled to release results for the four-month transition period ended Sept. 30, 2026, on Oct. 29, after market close.
The company exits the September-end transition period amid improving demand trends, stronger pricing execution and benefits from operational efficiencies. Higher yields, a fully staffed dedicated sales force and improving shipment trends are likely to have supported revenues and profitability during the period.
The Zacks Consensus Estimate for FDXF’s September-end 2026 period earnings has been revised downwards by 30.65% over the past 60 days to $1.38 per share. Meanwhile, the Zacks Consensus Estimate for 2026 revenues is pegged at $9.08 billion, indicating a decline of 0.16% from 2025 actuals.
Factors Likely to Have Influenced FDXF’s September-End PerformanceImproving Demand Trends: FedEx Freight entered the period with signs of stabilization in LTL demand. Management expected shipment declines to narrow progressively, supported by improving manufacturing indicators, truckload trends and sequentially better demand conditions.
Higher Yield to Aid Revenues: Pricing is likely to have remained a major growth driver. Management expected most of the transition-period revenue growth to come from higher yield, supported by elevated fuel prices, stronger pricing execution and more focused sales efforts. Higher yield was expected to contribute roughly 200 basis points to the adjusted operating margin.
Sales Force Expansion: FedEx Freight's dedicated LTL sales organization is likely to have supported customer wins and revenue quality. The sales force was fully staffed entering the period, with management highlighting increasing customer engagement and opportunities across small and medium-sized businesses, healthcare, retail, data centers and grocery.
Operational Efficiencies: Network productivity and better asset utilization may have aided profitability. Management expected roughly 80 basis points of benefit from efficiencies and other cost improvements during the transition period. The company also indicated that it had ample driver, equipment and facility capacity to accommodate improving demand without significant incremental investment.
Notably, FedEx Freight expected roughly 60% of transition-period revenue growth, 75% of adjusted operating income and 80% of adjusted EPS to be generated during the four months ended Sept. 30, reflecting favorable seasonality and timing.
What Our Model Says About FDXFOur proven model predicts an earnings beat for FedEx Freight this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
FDXF has an Earnings ESP of +5.07% and a Zacks Rank #2 at present. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Other Stocks to ConsiderHere are some other-top ranked stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Schneider National (SNDR - Free Report) has an Earnings ESP of +3.58% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
SNDR is scheduled to report third-quarter 2026 earnings on Oct. 29. The Zacks Consensus Estimate for third-quarter 2026 earnings has remained flat at 29 cents per share over the past 60 days. SNDR’s earnings beat the Zacks Consensus Estimate in two of the preceding four quarters (missing twice in the remaining two), with the average miss being 10.1%.
XPO, Inc. (XPO - Free Report) has an Earnings ESP of +0.67% and a Zacks Rank #2 at present. The company is scheduled to report third-quarter 2026 earnings on Oct. 29.
The Zacks Consensus Estimate for third-quarter 2026 earnings has remained flat at $1.56 per share over the past 60 days. XPO’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters. The average beat is 12.33%.
Key Takeaways Travelers launched Travis Upload & Go to automate workers' compensation submissions and halve quoting time.In August 2026 survey found 77% of agents cited manual data entry as a major time-consuming task.TRV invests over $1.5B annually in technology, while its underlying combined ratio held at 84.1% in Q3.
The Travelers Companies, Inc. (TRV - Free Report) is expanding its use of artificial intelligence to improve operating efficiency and support small commercial insurance growth. The company launched Travis Upload & Go, an AI-powered tool that streamlines workers’ compensation submissions by extracting information from applications, prepopulating policy fields and automating eligibility checks. The tool can generate a bindable quote in half the time.
Travis Upload & Go addresses a key challenge for insurance agents. In an August 2026 survey of more than 150 small-business insurance agents, 77% identified manual data entry as one of their most time-consuming tasks, while 54% spent at least a quarter of their workday on it.
Travelers invests more than $1.5 billion annually in technology and continues to expand its use of AI across pricing, underwriting and claims. Its third-quarter 2026 underlying combined ratio remained at 84.1%, marking nine consecutive quarters below 86%. This reflects sustained underwriting performance, supported by disciplined execution and investments in data and analytics.
The tool could improve underwriting workflow efficiency by reducing manual processing and allowing agents to focus on sales and customer service. Higher submission capacity and faster quoting may create opportunities to increase policy conversion and expand workers’ compensation business. However, the actual impact on premium growth and profitability will depend on agent adoption, quote-to-policy conversion rates and whether productivity gains translate into additional business.
What About Its Peers?Employers Holdings Inc. (EIG - Free Report) launched a workers’ compensation quoting app in ChatGPT in April 2026, allowing small-business owners to obtain premium estimates through conversational interactions. The tool creates a digital entry point for customers and simplifies the initial quoting process. The initiative creates an additional digital distribution channel, potentially helping EMPLOYERS reach more small businesses and generate new policy opportunities.
Kinsale Capital Group (KNSL - Free Report) uses proprietary technology, internal data, analytics and machine learning to support risk selection, pricing and underwriting efficiency. The company is also expanding the use of AI across underwriting, claims and analytics to improve productivity and operating efficiency.
TRV’s Price PerformanceShares of TRV have gained 47.1% in the past year, outperforming the industry’s growth of 12.5%.
Image Source: Zacks Investment Research
TRV’s ValuationThe stock is overvalued compared with its industry. It is currently trading at a price-to-book value multiple of 2.79, higher than the industry average of 1.47.
Image Source: Zacks Investment Research
Estimate Movement for TRVThe Zacks Consensus Estimate for Travelers’ 2026 earnings per share (EPS) indicates a year-over-year increase of 31.5%. The consensus estimate for revenues is pegged at $48.9 billion, implying a 0.1% year-over-year increase.
The consensus estimate for 2027 EPS indicates a decrease of 15.4%, while the revenues indicate an increase of 2.6% from the corresponding 2026 estimates.
The Zacks Consensus Estimate for 2026 and 2027 earnings have moved 7.2% and 2.4% north, respectively, over the last 30 days.
Image Source: Zacks Investment Research
TRV stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IBM shares have dropped sharply in 2026 while the dividend kept climbing, but a closer look at the debt loading up the balance sheet raises a real question about how long that streak can continue.
Income investors have seen IBM (NYSE:IBM | IBM Price Prediction) shares fall 13.34% year-to-date while the payout kept rising. At $251.56, the stock yields 2.66%. For retirees, the cash behind that check can hold up, but the buffer is thinner than IBM’s long payment record would suggest.
Cash Flow Covers the Dividend More Than Twice
In 2025, IBM produced $14.73 billion of free cash flow and paid $6.255 billion in common dividends. That covered the dividend about 2.4 times. On the October 21 call, CFO Jim Kavanaugh gave the 2026 picture so far:
“Through the first nine months, we generated about $8 billion of free cash flow, up 8% year-over-year.”
IBM, he said, “returned $4.8 billion to shareholders in the form of dividends through the first nine months of the year.” That puts coverage near 1.7 times with the fourth quarter still ahead. Management also expects full-year free cash flow to grow by more than $1 billion.
Where the Dividend Cash Comes From
Most of IBM’s cash comes from recurring revenue. Clients pay year after year for Red Hat software, data tools, and the mainframe software that runs banks and airlines. Annual recurring revenue reached $24.9 billion, growing 8%. Consulting and infrastructure add steadier, lower-growth cash. Chief Executive Arvind Krishna summed it up:
“The durability of our portfolio remains a defining feature of IBM today.”
Kavanaugh pointed to “consistent free cash flow realization of about 130% over the last few years,” which means the cash IBM brings in regularly runs ahead of its reported profits.
Debt Is Where the Cushion Thins
Total debt stands at $63.8 billion, up $2.6 billion this year. Acquisitions drove much of that: IBM spent $11.4 billion on deals in 2026 after $8.3 billion in 2025. About $12.7 billion of the debt supports IBM’s financing arm, whose receivables are “almost 80% investment grade.” Kavanaugh described “a strong liquidity position and a solid investment-grade balance sheet, with cash of $11.1 billion.”
How IBM Stacks Up Against Tech Peers
Company
Quarterly Dividend
Latest Raise
IBM
$1.69
0.6%
Microsoft (NASDAQ:MSFT)
$0.98
7.7%
Cisco Systems (NASDAQ:CSCO)
$0.42
2%
Microsoft has the strongest balance sheet in the group. Its net debt runs just 0.56 times EBITDA, but it yields only 0.67% and spent $39.367 billion on capex last quarter. Cisco brought in $14.177 billion of operating cash in fiscal 2026 against $1.41 billion of capex. IBM offers the highest income of the three and the slowest dividend growth.
A Payment Record Few Companies Can Match
IBM’s dividend history shows quarterly payments without a break since 1999 and a higher rate every year from 2000 through 2026. The quarterly rate rose from $1.62 in 2019 to $1.69. Now increases are down to a penny a year, suggesting management is prioritizing the streak over income growth.
Verdict: Safe, With One Clear Risk
IBM’s dividend is still one of the safest payouts in tech. Free cash flow covered it more than twice in 2025, recurring software revenue keeps that cash steady, and the payment record runs back decades. The risk to watch is debt-funded dealmaking. If acquisitions keep driving debt above $63.8 billion while free cash flow growth slows, the coverage buffer will contract, and so will any room for future raises.
Contact [email protected] for any questions or corrections.
Choosing between a creative software titan and an enterprise infrastructure legend depends on your financial goals. Deciding between Adobe (ADBE -1.03%) and International Business Machines (IBM +0.64%) requires a close look at their growth and stability profiles.
Adobe leads the market in design and document workflows, moving aggressively into generative artificial intelligence. IBM focuses on the backbone of corporate technology, specializing in hybrid cloud and consulting. While both serve the enterprise sector, they offer distinct financial profiles, making this a choice between high-margin software and steady, global infrastructure.
The case for AdobeAdobe develops an end-to-end platform for creative, productivity, and marketing workflows. Its solutions serve business professionals, consumers, and large enterprise marketing teams in the tech stocks market. In its latest annual report, filed for FY 2025, the company highlighted how it integrates third-party platforms to support its content supply chain and generative AI models. It also expanded its capabilities through the acquisition of Topaz Labs L.L.C. in June 2026.
In FY 2025, revenue reached nearly $23.8 billion, which was an increase of approximately 10.5% over the prior year. The company reported net income of roughly $7.1 billion, up from approximately $5.6 billion in FY 2024. This performance led to a net margin of roughly 30%, representing the percentage of total sales remaining after all business expenses are paid. Management noted that growth was consistent across its creative and document cloud segments.
As of its November 2025 balance sheet, the debt-to-equity ratio was nearly 0.6x, meaning for every dollar of equity held by shareholders, the company has 60 cents in total debt. The current ratio, which compares short-term assets to short-term liabilities, was approximately 1.0x. Free cash flow, defined as cash from operations minus capital expenditures, reached close to $9.9 billion. This strong cash generation allows the company to reinvest in its AI-powered product roadmap.
International Business Machines focuses on providing hybrid cloud and AI-driven technology solutions for digital transformation. The company serves clients across a vast array of industries, including financial services, healthcare, and retail. It maintains a broad ecosystem of strategic partners, including Amazon (AMZN -3.27%), Microsoft (MSFT -1.16%), Oracle (ORCL -4.66%), Palo Alto Networks (PANW -4.49%), Salesforce (CRM -4.50%), Samsung Electronics (SSNLF +0.00%), and SAP (SAP -1.64%). These collaborations allow the company to deliver end-to-end solutions for complex business challenges.
In FY 2025, revenue reached nearly $67.5 billion, representing growth of approximately 7.6% compared to the previous fiscal year. The company reported net income of roughly $10.6 billion, a significant increase from the $6.0 billion reported in the previous period. This resulted in a net margin of close to 15.7%, which helps investors understand the profit generated from every dollar of revenue. This improvement in profitability reflects the company's shift toward higher-value software and consulting services.
As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 1.87x, indicating that total debt is nearly double the value of shareholder equity. The current ratio was roughly 0.9x, meaning the company has 90 cents in short-term assets for every dollar of short-term debt. Free cash flow for the year reached nearly $14.7 billion. This cash flow supports the company's commitment to returning capital to shareholders while funding ongoing research and development.
Risk profile comparisonAdobe operates in highly competitive markets where it faces threats from established global enterprises like Alphabet (GOOGL -12.80%) and AI-native start-ups. The evolving regulatory landscape regarding artificial intelligence, including the EU AI Act, may increase compliance costs or liability exposure. Additionally, the company faces continuous risks from cyberattacks and must successfully integrate recent acquisitions like Topaz Labs L.L.C. to realize expected benefits.
International Business Machines participates in intense markets where it must constantly differentiate through technology innovation against rivals like Accenture (ACN +0.75%) and Capgemini (CAPMF -0.30%). Its long-term success relies on commercializing investments in AI and quantum computing while maintaining a viable economic model. As a global entity operating in over 175 countries, the company is also exposed to international trade disputes and shifting legal requirements that may impact its operating costs.
Valuation comparisonAdobe currently carries a lower Forward P/E based on future earnings estimates, while IBM trades at a lower P/S ratio relative to sales over the past twelve months.
MetricAdobeInternational Business MachinesForward P/E10.6x20.4xP/S ratio3.9x3.4xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?I'd go with IBM. Adobe is delivering solid results, but there's a question hanging over this company that I find hard to shake: How long before free AI tools erode the grip Creative Cloud has on professional creators? The stock is down roughly 30% this year, and that decline reflects a pervasive concern rather than an overreaction.
IBM is more of a slow-and-steady story, but the numbers are moving in the right direction. In its recently reported Q3 2026 results, the company beat estimates on the top and bottom lines, with revenue up 5% year over year, software revenue up 8%, and adjusted EPS up 11%. What I find interesting about IBM is the longer-term picture. The company is investing more than $10 billion in quantum computing over the next five years, with a fault-tolerant quantum computer targeted by 2029. That could be a massively transformational bet if it plays out.
IBM may not be exciting in the way that high-growth tech stocks are, but a profitable business investing seriously in the next era of computing could turn out to be a more interesting long-term position than its steady reputation suggests.
Sara Appino has positions in Amazon. The Motley Fool has positions in and recommends Accenture Plc, Adobe, Alphabet, Amazon, International Business Machines, Microsoft, Oracle, and Salesforce. The Motley Fool recommends Palo Alto Networks and recommends the following options: long January 2028 $260 calls on Accenture Plc, long January 2028 $330 calls on Adobe, short January 2028 $280 calls on Accenture Plc, and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
Key Takeaways MRK's Q3 adjusted earnings of $2.49 per share and revenues of $18.09 billion topped estimates, lifting shares.Keytruda sales rose 6% to $8.60 billion, while Winrevair, Welireg and Gardasil delivered strong growth.MRK raised 2026 adjusted EPS guidance to $2.77-$2.82 from $2.66-$2.76 and expects sales to be $66.8-$67.3B.
Merck (MRK - Free Report) reported adjusted earnings of $2.49 per share for the third quarter of 2026, beating the Zacks Consensus Estimate of $2.12. Earnings declined 3% year over year on a reported basis and 5% excluding foreign exchange (Fx).
The year-over-year decline was due to a one-time charge of 12 cents per share related to the global license agreement with SciBrunch.
Revenues in the third quarter increased 5% year over year on a reported basis and 4% excluding Fx to $18.09 billion, driven by strong oncology sales and newer product launches. Sales comprehensively beat the Zacks Consensus Estimate of $17.23 billion.
All sales growth numbers discussed below are on a year-over-year basis and exclude Fx impact.
MRK's Keytruda Sales Beat EstimatesCombined Keytruda and Keytruda Qlex sales increased 6% to $8.60 billion. Keytruda Qlex, the subcutaneous formulation of Keytruda, contributed $830 million during the reported quarter.
Excluding the sales of Keytruda Qlex, Keytruda recorded sales of $7.77 billion in the third quarter, which beat the Zacks Consensus Estimate of $7.46 billion.
The growth was driven by strong global uptake across earlier-stage indications, including triple-negative breast, cervical, head and neck, and bladder cancers. Higher global demand in metastatic indications, including urothelial cancer, also supported sales.
MRK's Other Oncology Drugs Show Mixed PerformanceWelireg sales surged 58% to $307 million, reflecting higher demand in the United States and continued launch uptake across international markets, mainly Japan.
Alliance revenues from Eisai-partnered Lenvima increased 11% to $287 million, driven by higher demand in the United States.
Meanwhile, Alliance revenues from AstraZeneca (AZN - Free Report) -partnered Lynparza declined 7% to $352 million.
MRK's Vaccines Sales ReboundHPV vaccines — Gardasil and Gardasil 9 — generated sales of $1.99 billion, up 14%. The figure came in ahead of the Zacks Consensus Estimate of $1.81 billion.
Higher U.S. sales, reflecting favorable public-sector purchasing patterns and improved net pricing, supported Gardasil sales growth.
Combined sales of ProQuad, M-M-R II and Varivax increased 7% to $730 million, mainly due to higher demand in certain European markets.
Merck's Newer Products Add MomentumWinrevair sales jumped 94% to $694 million, reflecting higher U.S. demand, favorable wholesaler and specialty pharmacy purchasing patterns, and continued launch uptake across Europe and Japan.
Ohtuvayre, added through the October 2025 acquisition of Verona Pharma, contributed $184 million during the third quarter, compared with $204 million recorded in the previous quarter.
Capvaxive sales increased 7% to $263 million, driven by launch uptake in international markets, particularly in Asia Pacific and Europe. Sales of the new RSV antibody, Enflonsia, surged 136% to $187 million, supported by seasonal demand and associated inventory buildup.
Merck's Established Drugs Post Mixed ResultsIn Diabetes, the Januvia/Janumet franchise recorded sales of $380 million, which declined 39%. The decrease reflected lower demand due to generic competition following the loss of market exclusivity in the United States.
Bridion sales plunged 67% to $144 million, primarily due to lower demand in the United States, owing to generic competition. However, Prevymis sales increased 31% to $347 million, driven by higher global demand.
MRK's Animal Health Sales RiseAnimal Health segment revenues increased 3% to $1.68 billion, supported by growth across the Livestock and Companion Animal portfolios. The figure, however, missed the Zacks Consensus Estimate of $1.72 billion.
Livestock sales increased 2% to $1.05 billion, primarily driven by higher poultry product demand. Companion Animal sales rose 6% to $628 million, supported by new product launches.
MRK's Operating ExpensesAdjusted selling, general and administrative expenses increased 10% to $2.86 billion, reflecting higher administrative costs and increased promotional spending to support product launches.
Adjusted research and development expenses rose 13% to $4.53 billion. The increase primarily reflected a $400 million charge associated with the SciBrunch licensing agreement and higher clinical development spending.
MRK Updates 2026 OutlookMerck raised the lower end of its 2026 sales guidance to $66.8-$67.3 billion from $66.3-$67.3 billion. The outlook includes an expected positive Fx impact of approximately 1%.
The company also raised its adjusted earnings guidance to $2.77-$2.82 per share from $2.66-$2.76. The guidance was raised despite including a one-time charge of 12 cents per share related to the SciBrunch licensing agreement recorded in the third quarter.
Adjusted operating expenses are now expected to be between $42.4 billion and $42.9 billion, compared with the previous projection of $42.0 billion and $42.7 billion.
The adjusted effective tax rate guidance was lowered to 32-33% from 35-36%.
Our Take on MRK’s ResultsMerck delivered better-than-expected third-quarter results, with both adjusted earnings and revenues surpassing estimates. Keytruda remained the company’s principal revenue driver, while Winrevair, Welireg, Enflonsia, Capvaxive and Ohtuvayre broadened its growth base. Animal Health also maintained steady momentum. Gardasil sales rebounded strongly, beating expectations. However, continued erosion in the Januvia/Janumet and Bridion franchises due to generic competition remained a headwind.
The narrowed and raised 2026 outlook for sales and earnings, respectively, reflects continued commercial momentum across oncology, cardiometabolic and respiratory products. Shares of Merck rose in premarket trading today following the results, likely reflecting investor optimism over the increased EPS guidance.
Year to date, shares of Merck have risen 36.7% compared with the industry’s 20.3% growth.
Image Source: Zacks Investment Research
Recent pipeline progress has also been encouraging. The FDA accepted Merck’s application for sacituzumab tirumotecan (sac-TMT) for certain patients with previously treated endometrial cancer under priority review. A decision from the regulatory body is due on June 15, 2027.
The company also reported positive phase III results for its personalized cancer therapy, intismeran autogene, in combination with Keytruda for treating certain patients with melanoma. The therapy is being developed in collaboration with Moderna (MRNA - Free Report) . The combo therapy recently met both primary and secondary endpoints in a phase III study in certain patients with high-risk melanoma.
MRK’s Zacks RankMerck currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways GSK's Specialty Medicines sales rose 14% in the first nine months of 2026, driving its growth outlook.Moderna's oncology pipeline offers potential, but competition and profitability challenges remain.GSK trades at 2.15 times forward sales versus Moderna's 33.23 times and offers a dividend.
Both GSK plc (GSK - Free Report) and Moderna (MRNA - Free Report) are seeking to drive long-term growth through innovation in vaccines and treatments for serious diseases, but they are pursuing different strategies.
While Moderna is expanding beyond vaccines into oncology, including a personalized mRNA-based cancer therapy being developed in partnership with Merck (MRK - Free Report) , GSK is building on its established pharmaceutical and vaccine business while advancing its own oncology pipeline.
But which stock offers greater growth potential today? Let’s compare the two companies’ fundamentals, growth prospects and valuations to determine which stock makes the stronger investment case.
The Case for GSKThe British drugmaker boasts a diversified portfolio across vaccines, specialty medicines and general medicines, along with a broad geographic presence.
The company is witnessing solid momentum in its Specialty Medicines business, its largest revenue-generating segment. During the first nine months of 2026, sales in the franchise rose 14% at constant exchange rates (CER), driven by double-digit growth across all therapy areas: HIV, Respiratory, Immunology & Inflammation (RI&I) and Oncology. GSK remains on track to deliver low-double-digit sales growth in Specialty Medicines for full-year 2026 at CER.
Key contributors to the segment include established products such as Nucala, Dovato and Benlysta, alongside long-acting HIV medicines Cabenuva and Apretude and newer oncology drugs Jemperli, Blenrep and Ojjaara. Strong patient demand for these treatments is supporting the franchise’s continued growth. Building on this momentum, GSK expects Specialty Medicines to account for more than 50% of total revenues by 2031, up from over 40% currently.
GSK is stepping up R&D investment to advance promising long-acting and specialty medicines across RI&I, Oncology and HIV. In 2025, the company strengthened its pipeline through more than 10 acquisitions and discovery collaborations. This momentum continued in 2026 with acquisitions such as 35Pharma and Nuvalent.
These investments are bolstering GSK’s growth pipeline. The company said it has more than doubled the number of phase II and phase III assets with blockbuster potential since 2022. GSK is targeting 22 phase III trial starts in 2026, with 18 already initiated.
GSK is also expanding its presence in next-generation vaccines. Following positive phase II results, the company has advanced its investigational mRNA-based seasonal flu vaccine into phase III development. Unlike Moderna’s recently approved mRNA flu vaccine, which targets hemagglutinin (HA), GSK’s candidate is designed to target both HA and neuraminidase (NA), two key proteins on the flu virus. This approach could offer a differentiated product in the seasonal flu vaccine market, although the candidate’s commercial potential will depend on successful late-stage studies.
Supported by its new product launches and robust pipeline progress, GSK expects sales to be more than £40 billion by 2031.
However, GSK faces its share of headwinds. Patents protecting dolutegravir, which is the backbone of several leading HIV medicines, including Tivicay, Triumeq and Dovato, are expected to begin expiring in major markets during 2028-2030, opening the door for generic competition. The company also faces pressure in the General Medicines segment, where sales declined year-to-date. Pipeline setbacks, such as the recent discontinuation of camlipixant in chronic cough due to limited efficacy, also raise concerns. Meanwhile, its latest results highlighted near-term pressure on the vaccine business, with weaker sales of shingles, RSV and influenza vaccines.
The Case for MRNAModerna has evolved considerably since becoming a commercial-stage company with its COVID-19 vaccine, Spikevax. The company has since expanded its respiratory vaccine portfolio with mResvia, its RSV vaccine, and mFlusiva, its standalone seasonal influenza vaccine. It also received European Union marketing authorization for mCombriax, a combination vaccine targeting both influenza and COVID-19.
This gives Moderna a presence across three major respiratory vaccine categories and should gradually reduce its reliance on COVID demand. The broader respiratory pipeline also provides additional avenues for expansion, with vaccines for norovirus and bird flu in late-stage development.
Moderna is also expanding beyond respiratory diseases, with oncology emerging as a potential growth driver. In August, the company and partner Merck announced positive top-line results from the phase III INTerpath-001 study of their personalized mRNA cancer therapy, intismeran autogene. The study met its primary endpoint of recurrence-free survival and a key secondary endpoint of distant metastasis-free survival in patients with completely resected, high-risk (Stage IIB-IV) melanoma.
However, when detailed results were released in October, investors were less impressed. The combination reduced the risk of recurrence or death by 42% and the risk of distant metastasis or death by 38% compared with Keytruda alone. However, investors were underwhelmed, comparing the latter result with the 59% risk reduction reported in an earlier phase IIb study. With expectations already elevated following Moderna’s sharp rally, the results triggered a recent ‘sell-the-news’ reaction.
Despite the market disappointment, intismeran remains an important potential catalyst for Moderna's oncology ambitions. Moderna and Merck are advancing intismeran across nine phase II and phase III studies spanning multiple tumor types, including non-small cell lung cancer (NSCLC), bladder cancer and renal cell carcinoma. The goal is to determine whether the approach that showed promise in melanoma can be replicated across different tumor types.
Moderna's oncology pipeline extends beyond intismeran. The company is developing mRNA-based cancer antigen therapies, a T-cell engager and a cell-therapy enhancer. These programs could provide additional avenues for growth if they demonstrate clinical and commercial potential. Beyond oncology, Moderna is applying its platform to other therapeutic areas, including rare diseases and autoimmune disorders.
However, competition remains a concern. Moderna faces established competitors across the respiratory markets it targets. In COVID-19 vaccines, it competes with Pfizer (PFE - Free Report) /BioNTech and Sanofi. In RSV, mResvia competes with Pfizer's Abrysvo and GSK's Arexvy, while the seasonal influenza market is already well established, with Sanofi, CSL Seqirus and GSK among the major players. This competitive landscape could make it challenging for Moderna to translate its newer products into significant market share.
Pipeline setbacks pose another risk for the stock. Moderna recently announced that a late-stage study of its norovirus vaccine did not meet the statistical criteria for early success at the interim analysis. This prompted the company to prepare an additional cohort before reaching a final decision. Such setbacks highlight the inherent risks associated with the company’s broad pipeline and show that a large number of programs does not guarantee successful commercialization.
How Do Estimates Compare for GSK & MRNA?The Zacks Consensus Estimate for GSK’s 2026 sales and EPS implies a year-over-year increase of 3.6% and 5.3%, respectively.
Bottom-line estimates for 2026 and 2027 have declined over the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Moderna’s 2026 sales suggests 8.3% year-over-year growth, while the company’s loss per share is expected to widen by 17.4%.
Loss per share estimates for 2026 have risen over the past 30 days, while the same for 2027 have narrowed.
Image Source: Zacks Investment Research
Price Performance and Valuation of GSK & MRNA?Year to date, shares of Moderna have skyrocketed 626%, while those of GSK have lost nearly 1%. In comparison, the industry has climbed more than 7%, as seen in the chart below.
Image Source: Zacks Investment Research
From a valuation standpoint, MRNA is trading at a significant premium compared to GSK, going by the price/sales (P/S) ratio. Moderna’s shares currently trade at 33.23 times forward 12-month sales, higher than 2.15 times for GSK.
Image Source: Zacks Investment Research
Which Is a Better Pick?GSK and Moderna carry a Zacks Rank #3 (Hold) each, which makes choosing one over the other difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, GSK appears to be the more compelling choice for investors seeking a combination of growth, income and relative valuation support. The company continues to deliver sales and core earnings growth, driven primarily by its fast-growing Specialty Medicines business. Although vaccine sales weakened in the third quarter, this was not entirely unexpected as GSK had previously indicated that its full-year 2026 outlook calls for the segment to be broadly stable or grow at a low-single-digit rate. Its deep pipeline — spanning vaccines, respiratory and infectious diseases, oncology and immunology — provides additional avenues for long-term expansion.
Moderna, meanwhile, offers significant longer-term potential, particularly in oncology, but its newer products and pipeline still need to demonstrate their ability to generate sustained commercial growth. Its profitability outlook remains challenging, and its shares have rallied sharply, leaving them trading at a substantial premium to GSK based on forward sales. At such an elevated valuation, Moderna has less room for disappointment if commercialization takes longer than expected.
Unlike Moderna, GSK also offers a dividend, providing investors with an additional source of returns.
Key Takeaways MGM reported a third-quarter loss of 11 cents per share, against earnings estimates of 15 cents.Las Vegas revenues fell 2% as lower room rates pressured profitability.MGM China hit record quarterly revenues, while MGM Digital narrowed its losses.
MGM Resorts International (MGM - Free Report) reported third-quarter 2026 results, with earnings and revenues missing the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines declined, with adjusted earnings swinging to a loss from a profit in the prior-year quarter.
MGM Resorts’ results were affected by lower room rates at Las Vegas Strip Resorts and reduced profitability at Regional Operations. However, record quarterly revenues and market share at MGM China, along with revenue growth at MGM Digital, provided some support. MGM China achieved a record quarterly market share of 17.1%.
MGM's Q3 Earnings & Revenue DetailsMGM Resorts reported an adjusted loss per share of 11 cents, in contrast to the Zacks Consensus Estimate of earnings of 15 cents by 173.3%. The figure compared unfavorably with adjusted earnings of 24 cents per share reported in the prior-year quarter.
Quarterly revenues of $4.21 billion missed the consensus mark of $4.25 billion by 1%. The top line declined 0.9% year over year. Consolidated adjusted EBITDA decreased 20.4% to $403 million from $506 million in the year-ago quarter.
MGM Resorts' Las Vegas Results Face PressureLas Vegas Strip Resorts revenues decreased 2% year over year to $1.95 billion. Segment adjusted EBITDAR declined 12% to $531 million from $601 million. The corresponding margin contracted approximately 300 basis points to 27.2%. Management attributed the weakness primarily to lower room rates during the quarter.
Casino revenues increased 8% to $488 million as table games win climbed 17% to $363 million. Table games win percentage expanded to 25.3% from 22.6%, while slot win increased 2% to $582 million. However, room revenues declined 6% to $622 million. Occupancy remained unchanged at 89%, while average daily rate and revenue per available room decreased 8% to $218 and $193, respectively. Management noted a favorable rebound in October.
MGM's Regional Operations Remain ChallengedRegional Operations revenues declined 8% year over year to $883 million, reflecting the disposition of MGM Northfield Park in April 2026. On a same-store basis, revenues increased 1% to $883 million from $873 million in the prior-year quarter.
Segment adjusted EBITDAR fell 18% to $243 million from $296 million. Same-store EBITDAR declined 7% to $243 million, while the corresponding margin contracted approximately 225 basis points to 27.5%. Casino revenues decreased 10% to $626 million as slot win fell 11% to $629 million. Table games win declined 2% to $200 million, while table games win percentage decreased to 19.1% from 19.4%.
MGM Resorts' China Revenues Reach Record HighMGM China revenues increased 5% year over year to $1.14 billion, reaching a quarterly record. Casino revenues rose 4% to $981 million despite a 10% decline in main-floor table games, which dropped to $3.68 billion. Table games win increased 1% to $1.02 billion, while the win percentage improved to 27.7% from 24.7%.
Segment adjusted EBITDAR declined 7% to $264 million from $284 million, and margin contracted approximately 296 basis points to 23.2%. Results were pressured by a $22 million year-over-year increase in intercompany branding license fees, which reached $41 million. Despite profitability pressure, the segment's record market share reflected its strong competitive position in Macau.
MGM's Digital Business Narrows LossesMGM Digital revenues increased 6% year over year to $184 million from $174 million. The segment reported an adjusted EBITDAR loss of $4 million compared with a loss of $23 million in the prior-year quarter, indicating a substantial improvement in operating profitability.
MGM Digital comprises LeoVegas and other consolidated interactive gaming subsidiaries. Separately, MGM's unconsolidated BetMGM North America venture contributed $26.7 million in operating income compared with $23.7 million a year earlier. Distributions and branding license fees from the venture to MGM Resorts totaled $34 million during the quarter.
MGM Resorts' Balance Sheet and Capital PlansMGM Resorts ended the third quarter with cash and cash equivalents of $2.40 billion, up from $2.06 billion at the end of 2025. Long-term debt declined to $5.67 billion from $6.23 billion, while total stockholders' equity increased to $3.37 billion from $3.25 billion.
Management highlighted an amended voting agreement designed to support value-creating share repurchases. The company has repurchased nearly half of its outstanding shares over the past five years, reflecting its continued focus on shareholder returns.
MGM Resorts also reiterated the long-term growth priorities, including its digital portfolio and MGM Osaka development. Management views the Japan project as an important contributor to growth, alongside its existing integrated resort and digital gaming businesses.
MGM’s Zacks Rank & Recent Consumer Discretionary ReleasesMGM Resorts currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilton Worldwide Holdings Inc. (HLT - Free Report) reported third-quarter 2026 earnings of $2.45 per share, surpassing the Zacks Consensus Estimate of $2.36 by 3.8%. Earnings increased 16.1% from $2.11 per share in the year-ago quarter.
Hilton’s total revenues of $3.33 billion missed the consensus mark of $3.39 billion by 1.8% but increased 6.6% year over year. Results benefited from higher system-wide RevPAR, improved occupancy and average daily rates, along with growth in management and franchise fees. Adjusted EBITDA rose 8.4% year over year to $1.06 billion. Hilton raised its full-year RevPAR growth expectation to 4-4.5% from 3-3.5% previously.
Hasbro, Inc. (HAS - Free Report) reported third-quarter 2026 adjusted earnings of $2.90 per share, surpassing the Zacks Consensus Estimate of $1.86 by 55.9%. Adjusted earnings increased 72.6% year over year.
Hasbro’s net revenues of $1.6 billion topped the consensus estimate of $1.47 billion by 8.6% and increased 15% year over year. Results benefited from strong performance at Wizards of the Coast, led by Magic: The Gathering, along with growth in Consumer Products and Entertainment. Productivity improvements and approximately $55 million in tariff refunds also supported profitability. Hasbro raised its 2026 revenue growth expectation to 7-9% from 5-7% previously.
Royal Caribbean Cruises Ltd. (RCL - Free Report) reported third-quarter 2026 adjusted earnings of $6.57 per share, surpassing the Zacks Consensus Estimate of $6.38 by 3%. Earnings increased 14.3% from $5.75 per share in the year-ago quarter.
Royal Caribbean’s total revenues of $5.59 billion exceeded the consensus mark of $5.58 billion by 0.1% and increased 8.8% year over year. Results benefited from strong close-in demand, higher passenger ticket revenues and increased onboard spending. Occupancy stood at 112.4%, while adjusted EBITDA rose 10.7% year over year to $2.54 billion. The company raised its full-year 2026 adjusted earnings guidance to $17.85-$17.95 per share.
The oil and energy sector is entering the thick of the third-quarter 2026 earnings season against a backdrop of rising crude prices, geopolitical uncertainty and uneven natural gas markets. Supply concerns stemming from tensions in the Middle East pushed West Texas Intermediate crude prices higher through September, creating a favorable environment for oil producers.
Caterpillar dropped more than 7% after its latest earnings report, but three of the most popular ETFs in retirement accounts actually finished the day higher. Understanding why reveals a hidden concentration risk sitting inside millions of portfolios.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
Shares of Caterpillar (NYSE:CAT | CAT Price Prediction) fell 7.27% to $661.54 in Thursday’s regular session after the company’s third-quarter earnings report. CNBC named Caterpillar and Alphabet (NASDAQ:GOOGL) as the two earnings reports dragging the S&P 500 lower today. Many index fund investors own Caterpillar without choosing it directly. It sits near the top of the most popular industrial funds and inside some of the biggest dividend ETFs held in retirement accounts.
Today’s drop adds to a rough stretch. Caterpillar is down 10.42% over the past week and 19.13% over the past month. Over longer periods it is still well ahead, up 16.47% year to date and 252.29% over five years.
Why Caterpillar Shares Slid After a Profit Beat Caterpillar released its results at 6:33 AM ET on October 29, 2026 and held its call at 8:30 AM ET. Adjusted EPS came in at $7.20 against a $7.04 consensus. GAAP diluted EPS was $7.13. Revenue of $20.68 billion rose 17.26% year over year while missing expectations of $20.69 billion. The Wall Street Journal’s same-day coverage tied the slide to the revenue miss.
The miss itself was small, a -0.05% revenue surprise. What changed was the quarter-to-quarter comparison. Here is what investors were looking at on October 29:
A much smaller beat: In Q2, reported on August 4, 2026, Caterpillar exceeded EPS estimates by 31.83% and revenue estimates by 7%. This quarter the EPS beat narrowed to 2.37%. Less tariff relief: Operating profit included $128 million of IEEPA tariff recoveries, compared with $392 million in Q2. A lower tax rate: The effective tax rate fell to 22.9% from 26.7% a year earlier, which helped the bottom line. Weak spots: Asia Pacific revenue fell 2%, rail retail sales dropped 70%, and Cat Financial’s allowance for credit losses rose to $332 million. No numbers on the outlook: Management pointed to strong order rates and a record backlog but provided no numeric guidance. Demand still looked healthy. Power Generation sales rose 30% on data-center turbines and engines, and total dealer retail sales grew 22%. Chief executive Joe Creed said the results “reflect the durability of our end markets, with strong order rates and a record backlog.” Even so, the stock had already fallen from $842 at the Q2 report to $716 when this release came out. Investors who were already worried got a smaller beat and less tariff help.
Three Popular ETFs Ranked by Caterpillar Weight The table ranks three widely held ETFs by how much of their net assets were in Caterpillar as of their latest portfolio filings, largest first. The “today” column shows each fund’s move in the October 29 regular session.
ETF Caterpillar Weight Holdings As Of Today’s Move Industrial Select Sector SPDR Fund (NYSEARCA:XLI) 8.51% June 30, 2026 +0.55% Fidelity MSCI Industrials Index ETF (NYSEARCA:FIDU) 5.40% July 31, 2026 +0.68% Vanguard High Dividend Yield ETF (NYSEARCA:VYM) 1.50% July 31, 2026 +0.54% Caterpillar’s price has fallen since these figures were taken, so its actual weight in each fund today is probably a bit lower than shown.
1. Industrial Select Sector SPDR Fund The Industrial Select Sector SPDR Fund had Caterpillar as its largest position at 8.51% of roughly $34 billion in net assets. That stake was worth about $2.89 billion. The next largest holdings were General Electric at 6.77% and GE Vernova at 5.48%. Even with this much Caterpillar, XLI traded at $169.41, up 0.55% on the day.
2. Fidelity MSCI Industrials Index ETF The Fidelity MSCI Industrials Index ETF held Caterpillar as its top position at 5.40%, just ahead of General Electric at 5.35%. FIDU spreads its money across hundreds of small and mid-size industrials, so Caterpillar takes up less of the fund than it does in XLI. FIDU rose 0.68% to $89.72.
3. Vanguard High Dividend Yield ETF The Vanguard High Dividend Yield ETF is where many income-focused retirement savers end up owning Caterpillar without noticing. Its 1.50% weight was worth about $1.49 billion, roughly level with Chevron’s 1.48%. VYM rose 0.54% to $164.26.
How These Funds Rose While Caterpillar Fell All three funds were up at the same time their biggest or near-biggest industrial holding dropped more than 7%. Diversification absorbed the single-stock loss. The rest of each portfolio offset the Caterpillar loss in this session. The past month shows the same thing. Caterpillar fell 19.13%, while XLI gained 0.37% and VYM gained 4.22% through October 28.
Diversification works in both directions, though. The weight that cushions XLI on a day like today also makes the fund depend more on one company than most investors realize. When Caterpillar was rising, XLI holders got more of the gains. Over the next few quarters, an extended slide in Caterpillar would drag on XLI more than on any of the other funds here.
Overlap Risk When You Own More Than One Retirement portfolios often combine a sector fund, a dividend fund and a broad index fund. Caterpillar shows up in all three. XLI and FIDU also share the same group of top names: Caterpillar, General Electric, GE Vernova and RTX are among the largest positions in both. If you hold XLI and VYM together, your total Caterpillar exposure is higher than either fund shows on its own. Adding an S&P 500 fund raises it again. To check your own exposure, look up each fund’s Caterpillar weight, multiply it by how much of your portfolio that fund makes up, and add the results.
What Retirement Investors Should Watch Next Management said it will discuss fourth-quarter and full-year 2026 adjusted EPS, so watch for any numbers it attaches to the outlook. Three other things matter:
Whether tariff recoveries keep narrowed. Management had said its outlook did not include additional IEEPA recoveries in the second half. Whether Asia Pacific keeps declining. Whether Power Generation can keep growing faster than 30%. XLI holders have the most riding on all of this. VYM holders have the least.
The clearest test is the backlog. Caterpillar reported a backlog of $72 billion at the end of Q2 and described it as a record again this quarter. If the next quarterly report shows the backlog below $72 billion, the main argument for Caterpillar’s demand story stops holding, and the industrial funds that own the most of it will feel that more than today’s drop.
Contact [email protected] for any questions or corrections.
For the quarter ended September 2026, Caterpillar (CAT - Free Report) reported revenue of $20.68 billion, up 17.3% over the same period last year. EPS came in at $7.20, compared to $4.95 in the year-ago quarter.
The reported revenue represents a surprise of +0.48% over the Zacks Consensus Estimate of $20.58 billion. With the consensus EPS estimate being $7.12, the EPS surprise was +1.12%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Caterpillar performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Price Realization - Machinery, Power & Energy - Power & Energy: $216 million versus the three-analyst average estimate of $213.86 million.Price Realization - Machinery, Power & Energy - Resource Industries: $96 million versus $52.1 million estimated by three analysts on average.Sales Volume - Machinery, Power & Energy - Power & Energy: $879 million versus $713.92 million estimated by three analysts on average.Sales Volume - Machinery, Power & Energy - Construction Industries: $874 million versus $746.1 million estimated by three analysts on average.Sales and Revenues- North America- Machinery, Power & Energy- Total: $11.3 billion compared to the $10.76 billion average estimate based on two analysts. The reported number represents a change of +24.8% year over year.Sales and Revenues- EAME- Machinery, Power & Energy- Power & Energy: $1.58 billion versus $1.47 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +15.6% change.Sales and Revenues- EAME- Machinery, Power & Energy- Total: $3.62 billion compared to the $3.56 billion average estimate based on two analysts. The reported number represents a change of +15.9% year over year.Sales and Revenues- Latin America- Machinery, Power & Energy- Total: $2.02 billion versus $1.93 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +15% change.Total sales and revenues- Machinery, Power & Energy- All Other Segments: $72 million compared to the $70.45 million average estimate based on four analysts. The reported number represents a change of -1.4% year over year.Total sales and revenues- Machinery, Power & Energy- Construction Industries: $7.98 billion versus $7.84 billion estimated by four analysts on average. Compared to the year-ago quarter, this number represents a +18.1% change.Inter-segment sales and revenue- Machinery, Power & Energy- Power & Energy: $1.5 billion versus the four-analyst average estimate of $1.42 billion. The reported number represents a year-over-year change of +11.8%.Total sales and revenues- Machinery, Power & Energy- Power & Energy: $8.78 billion versus the four-analyst average estimate of $8.58 billion. The reported number represents a year-over-year change of +4.6%.View all Key Company Metrics for Caterpillar here>>>
Shares of Caterpillar have returned -12% over the past month versus the Zacks S&P 500 composite's +0.9% change. The stock currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term.
Published in earnings earnings-estimates-revisions earnings-surprise
Key Takeaways Caterpillar's Q3 adjusted EPS rose 45.5% to $7.20, beating estimates on higher volume and favorable pricing.Sales climbed 17.3% to $20.68 billion, while its order backlog surged 95.7% to a record $78.1 billion.Caterpillar's operating cash flow increased 16% and maintained its 2026 revenue growth outlook.
Caterpillar Inc. (CAT - Free Report) reported adjusted earnings of $7.20 per share for the third quarter of 2026, up 45.5% year over year. The figure surpassed the Zacks Consensus Estimate of $7.12 by 1.12%. Higher sales volume and favorable price realization supported the performance.
Including one-time items, Caterpillar's earnings per share were $7.13 compared with $4.88 in the year-ago quarter.
CAT's Q3 Revenues Gain on Volume and PricingSales and revenues increased 17.3% to $20.68 billion, surpassing the consensus estimate of $20.58 billion by 0.48%. Caterpillar's order backlog surged 95.7% year over year to a record $78.1 billion, reflecting strong order rates.
The $3.04 billion year-over-year revenue increase primarily reflected $2.21 billion of higher sales volume and $663 million of favorable price realization. Currency movements added $58 million.
Higher sales of equipment to end users drove volume growth. Sales increased across all three primary operating segments. Geographically, North America led with 24% growth, while Latin America and Europe, Africa and the Middle East each recorded 15% growth. Asia/Pacific revenues declined 2%.
Our model had projected volume growth of $1.78 billion, a favorable price impact of around $492 million and a positive currency impact of $122 million.
Caterpillar's Operating Margins Expand in Q3Cost of goods sold increased 14.2% to $13.33 billion. Gross profit rose 23.2% to $7.35 billion, while gross margin expanded approximately 170 basis points to 35.5%.
Selling, general and administrative expenses declined 1.4% to $1.80 billion, while research and development expenses increased 7.4% to $596 million.
Operating profit increased 38.1% to $4.21 billion. The operating profit margin expanded to 20.4% from 17.3% in the prior-year quarter. Higher volume and favorable pricing outweighed $415 million of unfavorable manufacturing costs.
Adjusted operating profit increased 37.8% to $4.26 billion, while adjusted operating margin improved to 20.6% from 17.5%. Results included $128 million of International Emergency Economic Power Act (IEEPA) tariff recoveries. Excluding these recoveries, tariff costs were approximately $600 million.
CAT's Segments Post Sales and Profit GrowthTotal Machinery, Power & Energy (MP&E) sales rose 18% year over year to around $19.7 billion. Operating profit was $4.1 billion, up 38% year over year. Our model’s projection for sales and operating profit was $19.1 billion and $3.73 billion, respectively.
Construction Industries sales climbed 18.1% to $7.98 billion. Higher volume contributed $874 million, while favorable pricing added $349 million. The segment’s total sales came in higher than our estimate of $7.6 billion.
Segment profit advanced 33% to $1.83 billion. Margin widened to 22.9% from 20.4%, despite $252 million of unfavorable manufacturing costs, including higher freight expenses. Our projection for the segment’s operating profit was $1.61 billion.
Resource Industries sales rose 15.4% to $4.62 billion, reflecting $478 million of higher volume and $96 million of favorable pricing. It came in higher than our projection of $4.52 billion. Mining, Heavy Construction and Quarry & Aggregates sales increased 22%, while Rail sales declined 5%.
Segment profit increased 14.3% to $622 million. However, margin edged down to 13.5% from 13.6%, as $208 million of unfavorable manufacturing costs, primarily higher material costs including tariffs, offset volume and pricing benefits. Our estimate for the segment’s operating profit was $617 million.
Power & Energy sales increased 17.7% to $8.78 billion, supported by $879 million of higher volume and $216 million of favorable pricing. Our estimate was $8.6 billion. Power Generation sales advanced 30%, driven mainly by turbines and large reciprocating engines, particularly in data center applications. Oil and Gas sales increased 13%.
Segment profit rose 31.2% to $2.14 billion, while margin expanded 250 basis points to 24.4%, mainly reflecting higher sales volume. Our estimate was $1.97 billion.
Financial Products revenues increased 9.4% to $1.18 billion, primarily reflecting higher average earning assets. Lower average financing rates partially offset the improvement.
Segment profit increased 9.5% to $264 million. Benefits from higher-earning assets were partly offset by a $34 million increase in credit-loss provisions. Cat Financial's past-due rate improved to 1.31% from 1.47% a year earlier.
Our model had projected revenues of $1.19 billion and an operating profit of $247 million for the third quarter of 2026.
CAT's Cash Flow StrengthensMachinery, Power & Energy operating cash flow increased 16% to $4.5 billion in the third quarter of 2026. Free cash flow rose 19% to $3.8 billion, supported mainly by stronger profit.
Caterpillar returned approximately $2 billion to shareholders through share repurchases and dividends. The company ended September with $7.93 billion in cash and cash equivalents.
Caterpillar's Outlook for Q4 and 2026For the fourth quarter of 2026, management expects moderate sales and revenue growth year over year. Adjusted operating margin is projected to improve from the prior-year quarter. Tariff costs are anticipated at approximately $600 million, about $200 million below the year-ago level.
For 2026, Caterpillar maintained its expectation of mid-to-high-teens revenue growth. Adjusted operating margin is projected to be higher than in 2025 and near the bottom of its annual target range, excluding tariff recoveries.
Management expects full-year tariff costs of approximately $2.2 billion, excluding recoveries. Machinery, Power & Energy free cash flow is projected in the upper half of the $6-$15 billion annual target range. Capital expenditures are expected to total approximately $3.3 billion.
Caterpillar Stock’s Price Performance & Zacks RankOver the past year, Caterpillar stock has gained 23.3% compared with the industry’s 13.2% growth.
Image Source: Zacks Investment Research
Caterpillar carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
How did Caterpillar’s Peer Perform in the Quarter?Terex Corporation (TEX - Free Report) reported third-quarter 2026 earnings per share of $1.50, beating the Zacks Consensus Estimate of $1.42. The figure came in line with the year-ago quarter.
Terex’s revenues increased 58% year over year to $2.2 billion, which surpassed the Zacks Consensus Estimate of $2.17 billion.
Manufacturing & Construction Stocks Awaiting ResultsAstec Industries (ASTE - Free Report) is expected to release its third-quarter 2026 results on Nov. 5, 2026. The Zacks Consensus Estimate for Astec’s earnings is pegged at 50 cents per share, indicating a 6.4% improvement from the year-ago quarter.
The consensus estimate for Astec’s top line is pegged at $377.4 million, indicating a 7.8% rise from the prior year’s actual. Astec has a trailing negative four-quarter average surprise of 0.4%.
Komatsu (KMTUY - Free Report) is expected to release its third-quarter 2026 results on Nov. 4, 2026. The Zacks Consensus Estimate for Komatsu’s earnings is pegged at 64 cents per share, indicating a 1.6% improvement from the year-ago quarter. Komatsu has a trailing four-quarter average surprise of around 9%.
Caterpillar (CAT -8.18%) reported third-quarter sales of $20.7 billion, up 17%, and GAAP profit per share of $7.13, up from $4.88. Shares fell about 8% in regular trading Thursday. Volume and price both rose, led by power equipment for data centers, so the core business ran well. Two caveats: a $128 million tariff recovery sits inside operating profit, and the release gives no full-year outlook.
Key Numbers
Sales and revenues: $20.7 billion, up from $17.6 billion a year earlierOperating profit margin: 20.4%, versus 17.3%Power generation sales: $3.4 billion, up 30%Operating cash flow, first nine months: $10.6 billion, versus $8.1 billion$655.00-$58.38 (-8.18%)
NYSE · As of 1:28 PM ET 10/29/26
What It Means
Operating profit grew more than twice as fast as sales. Price added almost straight to profit, and selling and administrative costs were slightly lower while volume rose, so fixed costs were spread over more sales. Manufacturing costs, including freight and tariffs, took back part of the gain in Construction and Resource Industries.
The margin gain is partly not repeatable. The $128 million of tariff recoveries is in both GAAP and adjusted results, since the company adjusts only for restructuring. Tariff recoveries are not profit to count on next quarter.
Resource Industries is the soft spot. Its margin slipped slightly even as sales grew, and the release says sales to mining, heavy construction and quarry customers rose mainly because of dealer inventory changes. That means machines sold to dealers, not necessarily to end users.
What to Watch Next
Watch whether Caterpillar puts numbers on its full-year outlook, which this release does not. Also check whether Resource Industries sales begin tracking end-user demand.
Alexi Ueltzen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Caterpillar. The Motley Fool has a disclosure policy.
A month has gone by since the last earnings report for Carnival (CCL - Free Report) . Shares have added about 14.3% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Carnival due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Carnival Q3 Earnings Beat Estimates on Record Revenues & Net YieldsCarnival reported better-than-expected third-quarter fiscal 2026 (ended Aug. 31) results, with both adjusted earnings and revenues surpassing the Zacks Consensus Estimate. Revenues increased on a year-over-year basis, while adjusted earnings remained flat.
Carnival delivered all-time-high revenues and net yields in constant currency, supported by continued demand strength and cost discipline. Net yields increased 2.4% year over year in constant currency, more than one percentage point better than the June guidance. Adjusted EBITDA also exceeded the company's June guidance by $110 million despite higher fuel costs.
CCL’s Q3 Earnings & RevenuesFor the quarter under review, the company reported adjusted earnings per share (EPS) of $1.43, beating the Zacks Consensus Estimate of $1.36 by 5.1%.
Revenues in the quarter totaled $8.44 billion, beating the consensus mark of $8.36 billion by 0.9%. The metric increased 3.5% year over year from $8.15 billion.
During the quarter, passenger ticket revenues amounted to $5.53 billion, up 1.8% from $5.43 billion reported in the prior-year quarter. Our estimate for passenger ticket revenues was pegged at $5.6 billion.
Onboard and other revenues increased 6.7% to $2.91 billion from $2.72 billion reported in the year-ago quarter. Our estimate for Onboard and other revenues was pegged at $2.79 billion.
Carnival’s Q3 Operating HighlightsGross margin totaled $3.05 billion, almost flat compared with prior-year quarter levels. Gross margin yields declined 1.3% year over year, primarily due to higher fuel prices.
Net yields reached an all-time high and increased 2.4% year over year in constant currency. Adjusted EBITDA totaled $2.99 billion, unchanged from the prior-year quarter. Our estimate for the metric was $2.88 billion.
Cruise and tour operating expenses totaled $4.63 billion, up 5.5% from $4.39 billion in the year-ago quarter. Fuel expense increased to $615 million from $451 million. Adjusted cruise costs excluding fuel per available lower berth day increased 1.8% in constant currency, one percentage point better than the June guidance.
CCL’s Q3 Cruise MetricsPassenger cruise days totaled 27.9 million compared with 27.5 million in the prior-year quarter. Available lower berth days increased to 24.9 million from 24.6 million.
Occupancy was 111.8% compared with 111.7% in the year-ago quarter. Carnival carried 3.9 million passengers, up from 3.8 million a year earlier.
Fuel consumption per thousand available lower berth days improved 3.8% year over year to 26.9 metric tons from 28 metric tons. Fuel cost per metric ton consumed, excluding emission allowances, increased to $826 from $607.
Carnival’s Booking UpdateThe company delivered another strong booking performance, with volumes meaningfully ahead of the prior year and far outpacing capacity growth. For full-year fiscal 2027, both booked occupancy and pricing are at record levels.
Customer deposits reached a fiscal third-quarter record of $7.64 billion, surpassing the prior-year record by approximately $0.5 billion. Carnival also stated that 2028 bookings started at higher occupancy and pricing levels than the prior year.
CCL’s Balance SheetAs of Aug. 31, 2026, cash and cash equivalents were $1.22 billion compared with $1.93 billion as of Nov. 30, 2025. Total debt, including current and long-term debt, declined to $23.91 billion from $26.64 billion over the same period.
Cash from operations totaled $1.41 billion in the quarter compared with $1.38 billion in the prior-year quarter. Capital expenditures amounted to $698 million compared with $648 million a year ago.
Carnival completed approximately $1.2 billion of share repurchases year to date. The company distributed $204 million in dividends during the third quarter, bringing year-to-date dividend payments to $618 million.
Carnival’s Q4 & FY26 OutlookFor fourth-quarter fiscal 2026, the company expects adjusted EBITDA of approximately $1.30 billion. Adjusted net income is projected at nearly $274 million, while adjusted EPS is expected to be approximately 20 cents.
The company expects fiscal 2026 net yields to increase approximately 2.3% year over year in constant currency, 0.5 percentage points better than the June guidance. Adjusted cruise costs excluding fuel per available lower berth day are expected to increase approximately 2.2% in constant currency. For the fiscal fourth quarter, net yields are projected to increase approximately 1.7% in constant currency.
For fiscal 2026, CCL expects adjusted EBITDA of approximately $7.14 billion. Adjusted net income is projected to be nearly $3.08 billion, while adjusted EPS is anticipated to be approximately $2.24.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.
VGM ScoresCurrently, Carnival has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a score of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carnival has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerCarnival belongs to the Zacks Leisure and Recreation Services industry. Another stock from the same industry, Vail Resorts (MTN - Free Report) , has gained 10.8% over the past month. More than a month has passed since the company reported results for the quarter ended July 2026.
Vail Resorts reported revenues of $278.07 million in the last reported quarter, representing a year-over-year change of +2.5%. EPS of -$5.34 for the same period compares with -$5.08 a year ago.
Vail Resorts is expected to post a loss of $5.42 per share for the current quarter, representing a year-over-year change of -4.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Vail Resorts. Also, the stock has a VGM Score of D.
Carnival, Royal Caribbean and Norwegian Cruise Line Holdings posted strong earnings for their most recent quarters despite rising fuel prices. How the leading cruise companies navigate fuel costs boils down to starkly different strategies.
Oil prices have skyrocketed since the U.S.-Israel war with Iran began on Feb. 28. Brent crude oil reached a six-month high on Friday, settling at $116.72 per barrel. With no clear end in sight for the conflict in the Middle East, the pressure affecting cruise ships' lifeblood seems poised to last into the holiday travel season and beyond.
Both Royal Caribbean and Norwegian practice "hedging," or a strategy of using derivatives to reduce exposure to future fuel-price swings, to account for sharp price changes.
Carnival CEO Josh Weinstein, on the other hand, told CNBC in an interview last month that cutting fuel consumption is the best way to avert the effects of expensive fuel.
"At the end of the day, fuel is an input cost for us. The best thing that we can do to control that cost is to use less," Weinstein said at the time.
Jefferies analyst David Katz told CNBC in an interview that companies that hedge do so primarily to manage the cost of fuel, but also to manage Wall Street expectations and prevent hectic stock trading based on fuel price fluctuations.
"When you're public, the Street will trade your stock around based on the price of fuel," Katz said. "The Street's argument is that volatility puts pressure on your multiple."
"While it is mathematically most likely true that over the long term it is more expensive," he explained. "The benefit of having less fuel volatility in the model and less trading volatility is [it's] good for your multiple."
Despite the potential positives of the strategy, Carnival has maintained the stance it has held since 2019: Cutting fuel consumption works better than hedging.
And Carnival's third-quarter earnings report last month suggests the strategy may be paying off.
Carnival's 'maniacal' cuttingCarnival beat analysts' expectations on both the top and bottom lines for its most recent quarter and reported an all-time high net income of $1.9 billion.
Weinstein told CNBC in an interview on "Squawk on the Street" following the release that the company has been "maniacal" about cutting its fuel consumption, saying it's slashed its unit fuel consumption rate by 26% since 2019.
"We estimate we've saved about $700 million in 2026 based on that consumption savings rate going down since 2019," he said.
Carnival spent $615 million, or about 7.3% of its revenue, on fuel in the third quarter, according to its most recent earnings release. That's an increase from the $425 million, or 6.7% of revenue, that the company spent on fuel in the fourth quarter of 2025, before fuel prices spiked.
Carnival projects its fuel costs will rise to $640 million in the fourth quarter, according to its earnings release.
Careful hedgingRoyal Caribbean similarly beat analyst expectations for earnings per share for its third quarter, reported Tuesday. However, it narrowly missed on revenue.
CEO Jason Liberty attributed the company's beat in part to its hedging strategy during an interview on CNBC's "Squawk on the Street" Tuesday morning.
"We're a little bit over 60% hedged here for 2026, and so that's helping insulate us from some of the impacts on the rising fuel costs," he said.
"It's obviously still impacting us," Liberty said. "[High fuel prices] evaporated a good chunk of our Q3 earnings beat into the full-year guide. But we're continuing to hedge, and we watch."
Royal Caribbean spent about $347 million on fuel in the third quarter, or about 6.2% of its revenue, according to its earnings release. That compares with $293 million, or 6.8% of revenue, spent on fuel in the fourth quarter of 2025, which ended on Dec. 31.
The company projects fuel costs will continue to rise to $379 million in the fourth quarter.
Liberty pointed out that high fuel prices have not dampened demand from consumers for vacations.
"It's not that we don't see points of challenges, but really what we've seen is that even in those points of challenges, the consumer comes roaring back," he said.
Royal Caribbean reported strong bookings for the third quarter and said reservations for 2027 are already up by a high-teens percentage.
Norwegian's continued betNorwegian Cruise Line Holdings beat on both the top and bottom lines for its third-quarter earnings, reported on Thursday, with revenue of $2.9 billion and adjusted earnings per share of $1.12.
The company has hedged approximately 48% of its fuel consumption for 2026, according to the earnings release.
Norwegian spent about $196 million on fuel in the third quarter, or about 6.6% of its revenue, according to its most recent earnings release. That's a lower share of revenue than the 7.4% — totaling $167 million — spent on fuel in the fourth quarter of 2025, which ended on Dec. 31.
The company projects fuel consumption to rise slightly in the fourth quarter, up to 255,000 metric tons from 239,000 metric tons consumed in the third quarter.
The company is in the midst of a turnaround effort. And despite facing added challenges from the macro environment, CFO Mark Kempa said he is reassured by this quarter's results on an earnings call on Thursday.
"These results reinforce our confidence in the appeal of our products and the opportunity to translate stronger revenue performance and disciplined cost management into improved profitability," Kempa said.
As artificial intelligence reshapes the enterprise landscape, choosing between a software giant and a silicon design leader is a pivotal decision. Is Salesforce (CRM -4.50%) or Synopsys (SNPS +1.52%) the better buy for your portfolio?
Salesforce specializes in cloud-based software that manages customer relationships, while Synopsys provides the essential tools used to design the complex chips powering modern hardware. Both businesses are prominent names in the tech sector, offering unique ways to play the ongoing digital transformation of global enterprises.
The case for SalesforceSalesforce provides cloud-based software solutions that help organizations manage their relationships with customers across various departments. The company integrates its tools into a single platform that handles sales, service, marketing, and commerce among tech stocks. It serves a wide range of industries, including financial services and healthcare, reaching its global customer base through direct sales and a large partner ecosystem.
In its latest annual report, filed for the fiscal year ended Jan. 31, 2026, revenue reached nearly $41.5 billion, representing a growth of approximately 9.6% compared with the prior fiscal year. The company generated net income of roughly $7.5 billion during this period, resulting in a net margin of about 18%. This profitability represents an improvement over the previous fiscal year, when net income was close to $6.2 billion with a net margin of approximately 16.4%.
As of its January 2026 balance sheet, the debt-to-equity ratio was roughly 0.3x, which is total debt divided by shareholder equity, and the current ratio was approximately 0.8x. Free cash flow reached nearly $14.4 billion, which is calculated as cash from operations minus capital expenditures. Note that stock-based compensation represented roughly 23.4% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
The case for SynopsysSynopsys offers engineering solutions that span the entire process of creating silicon chips and electronic systems. Its software tools and intellectual property are essential for semiconductor manufacturers and systems companies working on advanced technologies like autonomous machines and data centers. The business distributes its products through a direct sales force to reach clients in the aerospace, automotive, and energy sectors.
In its latest annual report, filed for the fiscal year ended Oct. 31, 2025, revenue reached approximately $7.1 billion, which was an increase of nearly 15.1% compared with the prior fiscal year. The company generated net income of roughly $1.3 billion, yielding a net margin of about 18.9%.
According to its October 2025 balance sheet, the debt-to-equity ratio was close to 0.5x, and its current ratio was approximately 1.6x. Free cash flow for the period was roughly $1.3 billion, which is cash from operations minus capital expenditures. Note that stock-based compensation represented roughly 59% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparisonSalesforce faces significant risks from potential cyberattacks and data breaches that could compromise sensitive information and its brand reputation. The market for enterprise software is highly competitive, with the company facing pressure from Microsoft (MSFT -1.08%) and new artificial intelligence start-ups. Furthermore, its history of large-scale acquisitions carries risks related to operational integration, while volatility in its strategic investment portfolio can impact reported financial results.
Synopsys is vulnerable to macroeconomic uncertainty, as trade policies and tariffs can lead customers to delay spending on major design projects. The company carries a significant debt load from its merger with Ansys, which could limit its financial flexibility during an economic downturn. Additionally, it faces competition from Keysight Technologies (KEYS -1.00%) and other software providers while navigating strict international export controls and the threat of intellectual property theft.
Valuation comparisonSalesforce presents a more conservative valuation profile based on its earnings multiples, while Synopsys carries a higher premium reflecting its faster revenue growth. The P/S ratio measures market capitalization relative to sales over the past twelve months, while the Forward P/E ratio compares the stock price to future earnings estimates.
MetricSalesforceSynopsysForward P/E14.8x30.0xP/S ratio4.6x9.2xValuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.
I'd go with Synopsys. Salesforce is not a business anyone should dismiss lightly, but Synopsys sits at a chokepoint in the AI economy that investors should be paying attention to right now.
Every AI chip being designed anywhere in the world runs through electronic design automation software, and Synopsys is the dominant player in that market. In Q3 fiscal 2026, revenue reached $2.48 billion, earnings beat estimates, and the company raised its full-year outlook. Much of that growth reflects a full quarter of contribution from a major acquisition, but the underlying business is strong and the integration is progressing well.
To give Salesforce its due, the results keep coming in. In Q2 fiscal 2027, revenue grew 11% year over year, free cash flow jumped 81%, and Agentforce adoption is accelerating. But a meaningful portion of the headline earnings beat came from an investment gain rather than core operations, which makes the underlying business momentum harder to read clearly.
Synopsys is embedded in the design process of every advanced chip being built today. If you're thinking in years rather than quarters, this company's structural position in the AI supply chain is worth owning.
MILWAUKEE, Oct. 29, 2026 (GLOBE NEWSWIRE) -- Ademi LLP is investigating whether the proposed $1.14-per-share acquisition of GoPro, Inc. ((NASDAQ: GPRO) by Starman Optical provides fair value to GoPro's public shareholders and whether GoPro’s Board adequately protected shareholder interests in negotiating and approving the transaction. The $1.14 per share value is subject to potential adjustment based on GoPro’s net working capital at closing and GoPro shareholders will maintain ownership of approximately 10% of the outstanding shares.
Are You a GoPro (GPRO) Shareholder?
If you own GoPro shares, Ademi LLP would like to hear from you about the proposed acquisition and your rights as a shareholder.
CLICK HERE TO JOIN THE GPRO INVESTIGATION
You may also contact Guri Ademi at [email protected] or toll-free at 866-264-3995.
There is no cost or obligation to you.
What Is Ademi LLP Investigating?
The $1.14-per-share acquisition price and whether it adequately reflects GoPro’s value and future prospects;
Substantial change-of-control benefits available to GoPro insiders in connection with the transaction;
Restrictions on competing transactions, including a significant termination penalty that may discourage another potential buyer from making a superior proposal; and
The conduct of GoPro's Board of Directors in negotiating and approving the transaction and whether the Board fulfilled its duties to public shareholders.
What Should GPRO Shareholders Do?
Contact Ademi LLP to discuss your rights and our investigation. There is no cost or obligation to you.
Key Takeaways Linde's Q3 adjusted EPS rose 9% to $4.59, beating estimates, while revenues climbed 9% to $9.40 billion.LIN's Americas sales rose 11%, driven by higher pricing and volume growth, boosting operating profit 12%.Linde raised its 2026 adjusted EPS outlook to $17.82-$17.92, backed by growth and a $10.8 billion backlog.
Linde plc (LIN - Free Report) reported third-quarter 2026 adjusted earnings of $4.59 per share, up 9% from $4.21 a year ago. The bottom line surpassed the Zacks Consensus Estimate of $4.52 per share by 1.55%.
Sales increased 9% year over year to $9.40 billion from $8.62 billion, beating the Zacks Consensus Estimate of $9.18 billion by 2.45%.
Higher pricing, volume growth and favorable currency movements supported the results. Electronics remained the strongest end market, while the company's project backlog stood at $10.8 billion.
LIN's Underlying Sales Growth Reflects Broad DemandUnderlying sales increased 5% year over year, reflecting 3% higher pricing and 2% volume growth. Currency translation, acquisitions and divestitures, cost pass-through and Engineering each contributed 1% to reported sales growth.
Electronics led end-market performance with 15% sales growth, followed by chemicals and energy at 12% and manufacturing at 7%. Metals and mining sales increased 3%, while food and beverage advanced 3% and healthcare grew 2%. The volume gains reflected demand across industrial and consumer-related markets.
Linde's Americas Sales Rise on Pricing StrengthAmericas sales increased 11% year over year to $3.60 billion. Underlying sales advanced 9%, supported by 6% higher pricing and 3% volume growth. Electronics, metals and mining, and chemicals and energy were the primary volume drivers.
Operating profit rose 12% to $1.26 billion. The operating margin expanded 50 basis points to 35.1%, benefiting from higher pricing and productivity initiatives, partly offset by cost inflation. Favorable currency movements, particularly involving the Mexican peso and Brazilian real, also supported sales.
LIN's APAC Growth Benefits From Project Start-UpsAPAC sales increased 12% year over year to $1.95 billion. Underlying sales rose 8%, reflecting 5% volume growth and 3% higher pricing. Project start-ups, equipment sales and demand from electronics and chemicals and energy supported volumes.
Operating profit climbed 9% to $534 million. However, the operating margin contracted 70 basis points to 27.4%. Excluding cost pass-through effects, the decline was 40 basis points, primarily reflecting lower-margin equipment sales and helium-related dislocation costs.
Linde's EMEA Sales Advance on Pricing and VolumesEMEA sales increased 7% year over year to $2.33 billion. Underlying sales improved 3%, supported by 2% higher pricing and 1% volume growth. Healthcare and food and beverage were the main contributors to higher volumes.
Operating profit increased 5% to $817 million, while the margin declined 80 basis points to 35.1%. Excluding cost pass-through effects, the margin remained flat year over year. Continued pricing and productivity initiatives supported regional profitability.
LIN's Engineering Business Posts Higher ProfitLinde Engineering sales increased 12% to $582 million, while operating profit advanced 6% to $107 million. The operating margin declined to 18.4% from 19.5% a year earlier, reflecting project execution and timing.
Quarterly order intake totaled $499 million, compared with $269 million in the prior-year period. The sale-of-plant backlog reached $2.94 billion. Global Other sales rose 2% to $944 million, although operating profit fell 32% to $42 million, primarily due to weaker performance at Lincare.
Linde's Profitability Reflects Cost PressuresAdjusted operating profit rose 8% year over year to $2.76 billion. The adjusted operating margin declined 30 basis points to 29.4%, but remained flat after excluding cost pass-through effects. Adjusted net income increased 7% to $2.12 billion.
On a reported basis, operating profit declined to $2.15 billion from $2.37 billion. The company recognized $425 million in cost reduction program and other charges, including severance, restructuring-related expenses and noncash charges primarily associated with its U.S. homecare business.
LIN's Cash Flow Strengthens Shareholder ReturnsOperating cash flow increased 8% to $3.17 billion. Capital expenditures rose 9% to $1.39 billion, including $750 million in project spending. Free cash flow improved to $1.78 billion from $1.67 billion. Linde returned $1.69 billion to shareholders through dividends and net share repurchases.
The company ended September 2026 with cash and cash equivalents of $3.95 billion. Total debt stood at $26.70 billion, comprising $4.65 billion in short-term borrowings, $1.46 billion in current long-term debt and $20.59 billion in long-term debt.
Linde Raises Full-Year Earnings OutlookFor the fourth quarter, Linde expects adjusted earnings of $4.40-$4.50 per share, representing growth of 5-7% year over year. Management anticipates no year-over-year currency impact, while the guidance midpoint assumes no improvement in economic conditions.
Full-year 2026 adjusted earnings are now projected at $17.82-$17.92 per share, compared with the previous guidance of $17.70-$17.90. The updated range indicates growth of 8-9%, including a 2% currency tailwind. Capital expenditures are expected between $5.5 billion and $6 billion, supporting maintenance and projects associated with the company's $7.9 billion contractual sale-of-gas backlog.
LIN currently has a Zacks Rank #4 (Sell).
Stocks to ConsiderHere are some better-ranked stocks that you may want to consider, as they have the right combination of elements to post an earnings beat this reporting cycle.
Flotek Industries (FTK - Free Report) specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. It currently has an Earnings ESP of +18.18% and a Zacks Rank #1.
Flotek Industries is scheduled to release third-quarter 2026 earnings on Nov. 3. The Zacks Consensus Estimate for earnings is pegged at 22 cents per share, indicating an improvement of 10% from the prior-year reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.
Huntsman Corporation (HUN - Free Report) manufactures diversified organic chemical products and markets the products to a wide range of industrial and consumer customers. The company currently has an Earnings ESP of +36.14% and a Zacks Rank #3.
Huntsman is scheduled to release third-quarter 2026 earnings on Nov. 2. The Zacks Consensus Estimate for HUN’s earnings is pegged at 7 cents per share, indicating a 333.3% increase from the prior-year reported figure.
Air Products and Chemicals (APD - Free Report) is involved in producing and marketing industrial gases for a wide range of industries. It currently has an Earnings ESP of +0.44% and a Zacks Rank #3.
Air Products and Chemicals is scheduled to release third-quarter 2026 earnings on Nov. 5. The Zacks Consensus Estimate for earnings is pegged at $3.60 per share, indicating an improvement of 6.2% from the prior-year reported figure.
NEW YORK, Oct. 29, 2026 (GLOBE NEWSWIRE) -- Bronstein, Gewirtz & Grossman, LLC, a nationally recognized investor-rights law firm, announces that a class action lawsuit has been filed against Baidu, Inc. (NASDAQ: BIDU) and certain of its officers.
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Baidu securities between November 18, 2025 and August 17, 2026, both dates inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/cases/baidu-inc-bidu-class_action_lawsuit.
Baidu Case Details
The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that:
Baidu overstated the ability of its AI business to mitigate rapid declines in its legacy online marketing business; as a result, Baidu’s revenue was reasonably likely to decline; and as a result of the foregoing, Defendants’ positive statements about Baidu’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis. What's Next for Baidu Investors?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/cases/baidu-inc-bidu-class_action_lawsuit. or you may contact Peretz Bronstein, Esq. or his Client Relations Manager, Nathan Miller, of Bronstein, Gewirtz & Grossman, LLC at 917-590-0911. If you suffered a loss in Baidu you have until November 13, 2026, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as lead plaintiff.
No Cost to Baidu Investors
We, Bronstein, Gewirtz & Grossman LLC, represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman, LLC for Baidu Securities Class Action?
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide. More at www.bgandg.com
"Our practice centers on restoring investor capital and ensuring corporate accountability, which serves to uphold the essential integrity of the marketplace," said Peretz Bronstein, Founding Partner of Bronstein, Gewirtz & Grossman, LLC.
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Contact Info
Peretz Bronstein, Esq. or Nathan Miller
Bronstein, Gewirtz & Grossman, LLC
917-590-0911 | [email protected]
Attorney advertising.
Prior results do not guarantee similar outcomes.
Key Takeaways T-Mobile's Q3 earnings rose 33.6% year over year to $3.22 per share, beating estimates by 12.59%.Service revenues grew 6.2%, while postpaid ARPA rose 4.2% to $155.73, supporting higher profitability.TMUS raised 2026 EBITDA and free cash flow outlooks, while increasing its postpaid ARPA growth target to 3.5%.
T-Mobile US, Inc. (TMUS - Free Report) reported third-quarter 2026 earnings of $3.22 per share, which beat the Zacks Consensus Estimate of $2.86 by 12.59%. Earnings increased 33.6% year over year. Total revenues of $23.58 billion surpassed the consensus mark of $23.31 billion by 1.17% and rose 7.4% year over year.
The strong performance reflected continued service revenue growth, higher postpaid average revenue per account (ARPA) and solid customer additions. Postpaid ARPA increased 4.2% year over year to $155.73, highlighting improved customer monetization and growing adoption of premium rate plans.
TMUS Benefits From Strong Service Revenue GrowthT-Mobile generated total service revenues of $19.38 billion in the third quarter, up 6.2% from the year-ago period. Postpaid service revenues climbed 9.3% year over year to $16.27 billion, supported by higher average postpaid accounts following the UScellular and Metronet acquisitions and improved ARPA.
Equipment revenues increased 13.4% year over year to $3.93 billion, driven by higher average revenue per device sold, a richer mix of premium smartphones and increased manufacturer pricing. Higher device liquidation revenues also contributed to growth, partially offset by lower device sales volumes.
T-Mobile Expands Postpaid Accounts Amid Higher ChurnTMUS reported postpaid net account additions of 274,000 during the quarter compared with 396,000 a year ago. Total postpaid accounts increased to 34.97 million from 33.98 million in the prior-year quarter, reflecting continued customer base expansion despite slower net additions.
Postpaid account churn increased to 1.09% from 0.97% a year earlier, primarily due to a higher proportion of broadband-only accounts and the temporary impact of rate plan modernization. Meanwhile, ARPA benefited from higher fee revenues, increased customers per account and broader adoption of tax- and fee-exclusive plans.
TMUS Faces Higher Operating ExpensesT-Mobile's total operating expenses increased 2.8% year over year to $17.92 billion. Cost of services rose 4.7% to $3.01 billion, primarily reflecting higher wholesale network access costs, customer installation fee amortization and increased network maintenance expenses.
Cost of equipment sales increased 12.2% to $5.44 billion, reflecting higher device costs and a greater proportion of premium smartphones. Selling, general and administrative expenses remained relatively flat at $6.02 billion. Despite these pressures, operating income increased 25% year over year to $5.66 billion, supported by higher revenues and improved operating leverage.
T-Mobile Delivers Strong Profitability and Cash FlowCore adjusted EBITDA increased 10.8% year over year to $9.62 billion, primarily driven by higher service revenues and equipment revenues, partially offset by increased equipment and service costs. Net income rose 27.3% to $3.46 billion, benefiting from improved operating performance.
Net cash provided by operating activities declined 1.6% year over year to $7.34 billion, reflecting higher working capital outflows. However, adjusted free cash flow increased 5.3% to $5.07 billion as cash capital expenditures declined 14% to $2.27 billion. During the quarter, T-Mobile returned approximately $3.5 billion to shareholders through $2.4 billion in share repurchases and $1.1 billion in dividends.
TMUS Strengthens Its Balance Sheet PositionT-Mobile ended the third quarter with total assets of $213.10 billion and cash and cash equivalents of $5.62 billion. Long-term debt declined to $77.32 billion from $79.65 billion at the end of 2025, reflecting debt reduction alongside continued investments in network infrastructure and spectrum.
Net debt, excluding tower obligations, stood at $80.3 billion at quarter-end. The net debt to trailing 12-month core adjusted EBITDA ratio improved to 2.2 times from 2.5 times in the year-ago quarter. Management continues to prioritize network investments, spectrum opportunities and shareholder returns in its capital allocation strategy.
T-Mobile Raises Profitability Outlook for 2026Management now expects approximately one million postpaid net account additions for 2026. Core adjusted EBITDA guidance was narrowed and raised at the midpoint to $37.35-$37.45 billion from the previous range of $37.1-$37.5 billion, reflecting sustained service revenue growth and operating efficiency.
T-Mobile also raised its outlook for net cash provided by operating activities to $28.7-$28.8 billion from $28.4-$28.8 billion. Adjusted free cash flow guidance increased to $18.7-$18.8 billion from $18.4-$18.8 billion. Capital expenditure expectations remained unchanged at approximately $10 billion, while management increased its full-year postpaid ARPA growth expectation to approximately 3.5% from 2.5-3%.
Zacks RankT-Mobile currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming ReleasesArista Networks Inc. (ANET - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 3. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, suggesting growth of 44% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 22.75%. The company delivered an average earnings surprise of 8.88% in the last four reported quarters.
Motorola Solutions, Inc. (MSI - Free Report) is set to release third-quarter 2026 earnings Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $4.41 per share, implying growth of 8.62% from the year-ago reported figure.
Motorola has a long-term earnings growth expectation of 10.55%. The company delivered an average earnings surprise of 7.17% in the last four reported quarters.
HubSpot, Inc. (HUBS - Free Report) is scheduled to release third-quarter 2026 earnings on Nov. 4. The Zacks Consensus Estimate for earnings is pegged at $3.28 per share, suggesting growth of 23.31% from the year-ago reported figure.
HubSpot has a long-term earnings growth expectation of 21.25%. The company delivered an average earnings surprise of 6.13% in the last four reported quarters.
Key Takeaways Dow introduces DOWSIL IE-5619, a fluoro-alternative textile solution for durable water and oil repellency.The emulsion maintains repellency after more than 20 home washes while preserving softness and breathability.DOWSIL IE-5619 supports various fiber types and integrates into existing textile finishing processes.
Dow Inc. (DOW - Free Report) has announced the launch of DOWSIL IE-5619 DWOR Emulsion, a durable water and oil repellent solution featuring innovative fluoro-alternative chemistry for the global textile industry. The product is designed to help textile chemical formulators, mills and brands meet evolving regulatory, environmental and consumer requirements.
The third-generation silicone-organic hybrid technology provides durable water and oil repellency without relying on fluorinated chemistries, which are facing increasing regulatory restrictions. It also helps preserve fabric softness, breathability and aesthetics.
DOWSIL IE-5619 is a 30% solids concentrate developed for conventional textile finishing. It is suitable for synthetic, natural and blended fibers, although performance varies depending on fabric type. The product is designed to maintain water and oil repellency after more than 20 home laundering cycles. It also supports tape and logo adhesion without requiring additional surface treatments. The emulsion can be integrated into existing manufacturing processes, with typical application levels of 1-3% based on fabric weight and curing of 1-3 minutes at a minimum temperature of 150°C.
It is now being sold globally, strengthening DOW’s position in the textile supply chain. It underlines DOW’s focus on developing specific solutions to incorporate application needs and support product validation on specific fabrics and finishing lines.
Shares of DOW have gained 43.4% over the past year compared with the 9.4% rise in its industry.
Some better-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Avient Corporation (AVNT - Free Report) .
RS currently sports a Zacks Rank #1 (Strong Buy), while ASM and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.70 per share, indicating a 66.2% year-over-year surge. RSshares have gained 56.2% over the past year.
The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 75%.
The Zacks Consensus Estimate for AVNT’s 2026 earnings is pegged at $3.2 per share, indicating a year-over-year rise of 13.48%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%.
Despite weak commodity prices marring the near term outlook of the Zacks Manufacturing - Farm Equipment industry, it will benefit from increased agricultural equipment demand to meet the food requirements of a growing population. Deere & Company (DE - Free Report) , Kubota (KUBTY - Free Report) and CNH Industrial (CNH - Free Report) are well-positioned to capitalize on these opportunities through expanded product portfolios and technological advancements.
Farmers are increasingly adopting automation, precision agriculture and digital solutions to improve productivity, optimize costs and maximize returns, prompting these companies to accelerate investments in smart farming technologies.
About the Industry
The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These equipment include tractors, combines, cotton pickers and harvesting equipment; tillage, seeding and application equipment, consisting of sprayers, nutrient management and soil preparation machinery; and hay and forage equipment, comprising self-propelled forage harvesters and attachments, balers and mowers. Some companies in the industry produce turf and utility equipment, consisting of riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, commercial mowing equipment, and garden tillers and snow throwers. Some participants manufacture irrigation equipment. Deere, CNH Industrial and Kubota are presently the top three global manufacturers of agricultural equipment (in that order).
Trends Shaping the Future of the Manufacturing - Farm Equipment Industry
Farm Pressures Weigh on Demand, Future Growth Intact: Corn and soybean prices have weakened recently, as the rapidly advancing U.S. harvest and expectations for record crops weighed on prices. Wheat prices have declined more sharply, hitting a four-month low amid ample global supply expectations and easing concerns over Black Sea grain shipments. The U.S. Department of Agriculture (USDA) forecasts a 2.6% year-over-year dip in net farm income to $158.4 billion for 2026. Production expenses are expected to rise 4.5% to $492.8 billion in 2026. This includes an increase in livestock/poultry purchases, fertilizer, lime, soil conditioner expenses and fuel and oil expenses. Lower farm profitability could pressure farmers’ purchasing power and lead to delayed equipment purchases, creating near-term headwinds for manufacturers. However, long-term demand prospects remain supported by rising global food consumption, population growth and increasing farm sizes. Labor shortages and rising wage costs are also encouraging farmers to adopt mechanization and invest in equipment that improves productivity and operational efficiency.
Pricing, Cost-Cutting Actions to Boost Margins: Farm equipment manufacturers continue to face margin pressures from elevated labor, freight, fuel and raw material costs, along with ongoing supply-chain challenges. Changes in U.S. trade policies and retaliatory measures from other countries have increased costs for imported components and created additional uncertainty across the agriculture and construction equipment markets. Geopolitical developments, including disruptions related to the Iran conflict, have further strained supply chains and added to cost inflation. To counter these pressures, industry participants are implementing pricing strategies, optimizing sourcing networks, improving manufacturing efficiency and pursuing cost-reduction initiatives. These actions, along with better supply-chain management and operational discipline, are expected to support profitability despite a challenging cost environment.
Technologically Advanced Machinery Continues to Gain Popularity: Manufacturers are investing in technologically advanced machinery equipped with connectivity, autonomous capabilities and data-driven tools to address evolving customer needs. Precision agriculture solutions enable farmers to optimize input usage, improve yields and enhance sustainability while lowering overall costs. As labor availability remains a challenge and the need for higher agricultural productivity increases, demand for smart farming technologies and automated equipment is expected to remain a key growth driver for the industry.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #210, which places it at the bottom 15% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Despite the bleak near-term prospects of the industry, we will present a few Manufacturing - Farm Equipment stocks that can be retained in one’s portfolio. It is worth taking a look at the industry’s stock-market performance and valuation picture before that.
Industry Outperforms Sector and S&P 500
The Zacks Manufacturing - Farm Equipment industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have gained 32% in the past 12 months compared with the S&P 500’s growth of 13.2%. The Industrial Products sector has gained 8% in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 32.84X compared with the S&P 500’s 17.88X. The Industrial Products sector’s trailing 12-month EV/EBITDA is 18.66X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry traded as high as 36.04X and as low as 14.16X, the median being 20.33X.
3 Manufacturing - Farm Equipment Stocks to Keep an Eye on
Kubota: The company reported an 18% increase in revenues for the Farm & Industrial Machinery segment for the six-month period ended June 30, 2026. Domestic revenues rose 13% while overseas revenues increased 19%. North America's construction equipment market remained strong on infrastructure spending and private construction demand, though residential tractor demand softened. Management expects segment revenues to grow in 2026, supported by robust North American construction equipment demand, recovery in Europe and Thailand, and continued strength in India. Kubota recently acquired a site for a new plant in India to expand production capacity for tractors to capitalize on the growing demand in the country. Kubota recently announced that it will launch the new Agri Robo Tractor MR Series in April 2027 in Japan. These are the first domestically manufactured tractors capable of unmanned autonomous operation under remote monitoring.
The Zacks Consensus Estimate for Osaka, Japan-based Kubota’s earnings for fiscal 2026 has moved up 0.8% over the past 60 days and is pegged at $7.72 per share. The estimate suggests year-over-year growth of 41.1%. The company has a trailing four-quarter earnings surprise of 41.7%, on average. It has an estimated long-term earnings growth rate of 10% and currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: KUBTY
Deere: The company will continue to benefit from its strong focus on launching technologically advanced products and feature-rich solutions that strengthen its competitive positioning. Expansion in precision agriculture remains a key growth catalyst, while replacement demand driven by the need to upgrade aging equipment should continue to support revenues. Deere’s exposure to the construction equipment market also positions it well to benefit from infrastructure spending, healthy rental activity and robust demand from projects such as data centers. Optimizing its cost structure through efficiency initiatives and footprint adjustments, while leveraging pricing actions and its Smart Industrial strategy to offset input cost pressures over time, is also a smart move. Deere acquired construction technology company Tenna, adding mixed-fleet operations and asset tracking capabilities that can integrate with its broader digital ecosystem. The company’s earlier purchase of intellectual property for tree planting equipment from Risutec also supports its precision forestry portfolio and aligns with longer-term sustainability and automation priorities.
The Zacks Consensus Estimate for the Moline, IL-based company’s fiscal 2026 earnings has remained unchanged over the past 60 days at $18.11. DE has a trailing four-quarter earnings surprise of 11.1%, on average. The company currently has an estimated long-term earnings growth rate of 15.1% and carries a Zacks Rank #3 (Hold).
Price & Consensus: DE
CNH Industrial: The company delivered year-over-year revenue growth in the second quarter of 2026 while advancing its strategic priorities, including quality, sourcing, operational efficiency and dealer network consolidation. Although farmer economics remain under pressure, the company highlighted encouraging equipment-cycle trends, such as normalized dealer inventories, an aging fleet and a healthier balance between new and used equipment pricing. CNH continues to support its dealers and customers while investing in equipment and technology to strengthen its competitive position through the next cycle. It is expanding its Precision Technology portfolio through investments in automation, autonomy, digital tools, alternative fuels and electrification. The company is also enhancing its FieldOps platform and integrating Raven technology into newer machines for seamless connectivity. New product launches, feature upgrades and portfolio enhancements, along with ongoing operational efficiency initiatives, are expected to aid growth.
The Zacks Consensus Estimate for CNH Industrial’s fiscal 2026 earnings has remained unchanged over the past 60 days at 45 cents per share. CNH has a trailing four-quarter earnings surprise of around 13%, on average. CNH Industrial carries a Zacks Rank of 3.
According to ChatGPT’s analysis, Oracle (NYSE: ORCL) stock is not likely to continue its explosive Wednesday rally, but could also escape the Thursday, October 29 downturn by December 31, 2026.
Specifically, the advanced artificial intelligence (AI) platform noted the AI cloud growth and its overall impact on revenue, while also highlighting that remaining performance obligations reached $664 billion, providing substantial contracted demand. It warned, however, that the entirety of the figure is unlikely to turn into revenue ‘immediately’.
Similarly, ChatGPT assessed that the commitment to limit additional capital-market funding to $20 billion through fiscal 2030, and the projection that free cash flow in the second half of fiscal 2028 represent positive developments.
OpenAI’s flagship model, however, also stated that the projected capital expenditure (CapEx) will do much to offset the benefits of the sales forecast and that issues with reliance on specific customers – including OpenAI itself – leave significant risks.
Finally, the AI did not reflect on the September force majeure notice, nor the July Oracle credit rating downgrade in its analysis, before estimating that ORCL shares will hit $155 by December 31, 2026.
Considering the technology giant is, at press time on Thursday, October 29, changing hands at $139.83, ChatGPT effectively forecasted the equity will rally 10.85% in slightly more than two months.
ChatGPT says Oracle stock price will hit this target by December 31, 2026. Source: Finbold & ChatGPT
Oracle stock price performance in 2026
Meanwhile, Oracle stock has suffered a relatively steep decline in 2026, falling 28.55% from $195.91 to $139.83 year-to-date (YTD).
The more recent month proved particularly damaging for the company’s value since, after soaring 26.79% between January 2 – the first regular session of the year – and June 1, ORCL shares entered a downtrend that took them 43.33% below the mid-year highs above $248.
Oracle stock price performance in 2026. Source: Google
Lastly, though, there is significant optimism among company executives and Wall Street analysts; investors should be wary when engaging with the equity given its reliance on OpenAI rapidly accumulating a vast quantity of cash to pay its obligations, and Oracle itself warning of trouble ahead in the form of the force majeure notice.
Featured image via Shutterstock
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Microsoft and Alphabet both came up short on capital spending last quarter, and the AI cloud stocks that depend on that expansion are paying the price today. Whether the shortfall signals a slowdown or just a delay could determine how…
Two of the biggest buyers of AI computing power spent less on capital projects last quarter than Wall Street expected, and the AI cloud stocks that supply that expansion are falling. Fastly (NASDAQ:FSLY) stock is at $25.43, down 6%, in midday trading.
Among its AI cloud peers, Oracle (NYSE:ORCL | ORCL Price Prediction) stock is at $140.57, down 3%. Nebius Group (NASDAQ:NBIS) stock is at $177.56, also down 3%.
Microsoft and Alphabet Spend Less Than Wall Street Expected
On October 28, Microsoft (NASDAQ:MSFT) reported $45.2 billion in capital expenditures and finance leases for Q1 FY2027. The total came in below Wall Street analysts’ consensus of $50.7 billion and short of Microsoft’s $50 billion target. Microsoft chief financial officer Amy Hood said some third-party capacity deliveries the company expected in the quarter were delayed, and she expects capital spending of more than $50 billion next quarter and approximately $170 billion for the calendar year.
A similar shortfall came from Alphabet (NASDAQ:GOOGL), which reported $51.36 billion in capital expenditures against Wall Street analysts’ consensus of $55.09 billion. Alphabet stock is at $287.67, down 11%, per Stocktwits. Microsoft stock is at $523.30, down 1%.
That matters because Microsoft buys computing capacity from outside AI cloud providers, including Nebius and CoreWeave. Slower deliveries and lower spending raise questions about how quickly those providers’ revenue ramps, though Hood didn’t tie the delays to any named supplier. The power, cooling and networking names behind the data centers are part of the same expansion story (we rounded up seven of them in a free report on the AI infrastructure stocks that aren’t chipmakers). Her read on demand stayed firm: “Customer demand continues to exceed available supply.”
Oracle Gives Back Part of Its Investor Day Rally While Momentum Names Slide
On October 28, Oracle stock rallied 11% to close at $144.54 after the company’s investor day. At that event, Oracle forecast $30 billion in free cash flow by fiscal 2029 and capped new financing through fiscal 2030 at $20 billion, split between $10 billion in equity and $10 billion in debt. Management also reaffirmed Oracle’s $225 billion revenue target for fiscal 2030 and pointed to $664 billion in remaining performance obligations, or signed contracts not yet billed.
Those targets followed negative free cash flow of $23.7 billion at Oracle in fiscal 2026, and the funding cap helped ease debt concerns that had hung over the stock. The decline gives back part of that rally as the rest of the AI cloud group sells off. Oracle stock is still down 27% year to date, even after that jump.
Momentum names had far more to give back. Fastly stock is up 150% this year, a run that came alongside six straight quarters of earnings beats, including its Q4 2025 results. As an edge cloud and security platform, the company earns usage-based revenue from internet traffic, and its slide moves in step with the group even though management has said AI traffic is growing 6.5x faster than human traffic. The company lifted its full-year 2026 revenue guidance to $732 million to $746 million on August 5.
Nebius stock is up 112% this year, and its pure-play GPU cloud model ties it more directly to hyperscaler spending than Fastly or Oracle. Three customers made up 24%, 21% and 14% of Nebius’s revenue in Q2 2026. CoreWeave stock is at $64, up 0.1%, essentially flat and apart from the group even though it’s a major Microsoft supplier. That stability follows a rough year, with CoreWeave stock down 11% year to date.
What Microsoft Capacity Delays Mean for Oracle, Fastly and Nebius
The next test for Microsoft is whether its delayed third-party capacity arrives in the second half of its fiscal year, as Hood expects. A smooth transition could restart the ramp for Nebius and CoreWeave, while another slip could stretch their revenue schedules further. Upcoming spending updates from other cloud giants could either confirm that worry or ease it.
For Oracle, the open question is whether the company stays within its new funding cap while it keeps building data centers. Fastly faces a different test, since its growth rests on AI traffic and security demand more than on hyperscaler budgets. Bullish investors can point to Hood’s view that demand still exceeds supply, while the bears can cite heavy spending and customer concentration across the group. A cautious approach may make sense while the timing of Microsoft’s delayed capacity remains unresolved.
Contact [email protected] for any questions or corrections.
Oracle Corp. (NYSE:ORCL) stock fell Thursday as a broader sell-off in large-cap technology stocks weighed on the company despite a bullish analyst outlook for its artificial intelligence infrastructure business.
The Nasdaq Composite fell 1.22%, while the S&P 500 declined 0.31%.
BNP Paribas analyst Stefan Slowinski reiterated an Outperform rating on Oracle with a $248 price forecast, citing improving visibility into financing needs, future free cash flow and returns from its AI infrastructure expansion.
Slowinski said Oracle’s Investor Day reinforced his view that the company likely will not need additional capital beyond the $20 billion it plans to raise in fiscal 2027.
Oracle expects to split the financing roughly equally between debt and equity while increasingly relying on vendor financing and bring-your-own-hardware arrangements for new projects.
Oracle Sees Free Cash Flow Turning PositiveSlowinski said Oracle expects capital expenditures to peak in fiscal 2027 and 2028, remaining relatively flat year over year, before free cash flow turns positive in the second half of fiscal 2028.
Oracle forecasts $30 billion in free cash flow for fiscal 2029 and aims to keep net debt below 3.5 times adjusted EBITDA.
Slowinski said the company expects 100% free-cash-flow conversion once new infrastructure capacity becomes operational, supporting a more self-funded business model.
Oracle is targeting 10 gigawatts of infrastructure capacity. The company has raised pricing on new five-year contracts to approximately $16 billion per gigawatt from about $10 billion.
Management believes the higher pricing could support a 28% return on invested capital.
Oracle Reaffirms $225 Billion Revenue GoalOracle reiterated its fiscal 2030 forecasts of more than $225 billion in revenue and earnings of more than $21 per share.
Slowinski said Oracle’s diversified global infrastructure network should provide flexibility to manage potential project delays.
He expects adjusted operating margins to face pressure during the infrastructure expansion before recovering to more than 40%.
Analyst Sees Significant Earnings UpsideSlowinski said Oracle trades at approximately 10 times projected fiscal 2029 earnings and nine times enterprise value to earnings before interest, taxes and amortization.
He sees substantial potential for revenue, earnings and free-cash-flow growth as Oracle expands its AI infrastructure business.
Slowinski believes Oracle is approaching the later stages of its initial AI infrastructure buildout, positioning the company for stronger cash generation as new capacity comes online and capital spending eventually moderates.
ORCL Stock Price Activity: Oracle shares were down 3.18% at $139.95 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
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Key Takeaways XYZ's Square and Cash App ecosystems gain from rising payment volumes, lending growth and product expansion.Block's AI investments, banking infrastructure expansion and Square-Cash App integration support growth.Visa's growing payment volumes, cross-border spending and VAS support growth despite cost pressures.
The digital payments industry continues to evolve, driven by the growing adoption of cashless transactions, expanding e-commerce activity and increasing demand for integrated financial services. While these trends create growth opportunities for payment providers, intensifying competition, evolving consumer spending patterns and regulatory pressures are shaping their long-term prospects.
Visa Inc. (V - Free Report) and Block, Inc. (XYZ - Free Report) are two prominent participants in the digital payments ecosystem, but their business models differ considerably. Visa operates a global payment network, benefiting from transaction volumes, cross-border spending and value-added services. In contrast, Block focuses on merchant payment solutions and consumer financial services through its Square and Cash App ecosystems. Their distinct revenue models, growth strategies and profitability profiles make them relevant candidates for comparison as investors assess the sustainability of digital payments growth.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better bet now.
The Case for VisaVisa's expanding global payments network, rising transaction volumes and growing cross-border spending remain central to its growth prospects. In the fourth quarter of fiscal 2026, payments volume increased 9% year over year, while processed transactions rose 10%. Cross-border volume, excluding intra-Europe transactions, climbed 14%, supported by a 13% increase in travel-related spending and 17% growth in e-commerce. Continued expansion in digital payments acceptance, tokenization and commercial spending provides opportunities to sustain transaction-driven revenue growth.
V’s value-added services (VAS), which include fraud prevention, cybersecurity, advisory and issuer-processing solutions, provide another growth avenue beyond transaction processing. Its commercial and money-movement solutions also create opportunities to expand beyond traditional consumer card payments. Visa Direct processed more than 15 billion transactions during the year, representing approximately $1.5 trillion in payment volume. The expansion of Visa Direct, alongside Pismo's banking and issuer-processing capabilities, strengthens V's presence in business payments and financial infrastructure. It beat earnings in each of the past four quarters with an average surprise of 3.1%.
V is also extending its capabilities into stablecoins and AI-enabled commerce. Its stablecoin settlement business surpassed $25 billion in annualized volume, while Visa Intelligent Commerce is being developed to support secure transactions initiated by AI agents. Recent initiatives include a pilot with BILL and Billtrust for automated business invoice payments and new commercial fraud prevention tools. These developments could diversify Visa's transaction flows and expand its role in emerging payment technologies.
Another important growth avenue lies in geographic expansion and deeper relationships with financial institutions. V also received regulatory approval to begin preparations for domestic payment processing in mainland China. The company is also expanding digital acceptance through Tap to Phone and strengthening its network of banking and fintech partners.
V’s strong cash position enables substantial share buybacks and dividend payouts and supports inorganic growth and financial stability. With $12.9 billion in cash and cash equivalents, the company maintains a solid capital position. Visa returned $5.2 billion to its shareholders through share repurchases and dividends in the fiscal fourth quarter.
However, escalating operating expenses and higher rebates and client incentives will likely impact its growth potential. In the fourth quarter of fiscal 2026, adjusted operating expenses rose 12.2% year over year due to higher personnel and marketing expenses. Moreover, regulatory and legal pressures surrounding interchange fees and payment network practices could constrain V's pricing flexibility and profitability.
The Case for BlockBlock is pursuing growth through its two main ecosystems: Square, which serves businesses with payment processing, software and financial services, and Cash App, which provides consumer payment and financial products. In the second quarter of 2026, Square's gross payment volume (GPV) increased 13% year over year, with U.S. growth accelerating to 10%. International GPV rose 25% year over year on a constant-currency basis. Expanded field sales, independent sales organization (ISO) partnerships, self-onboarding and a broader software offering are central to Square's growth strategy, particularly among food and beverage businesses and larger sellers. Its recently launched AI-powered Square Kiosk, featuring conversational ordering and integrated payments, further strengthens its offerings for quick-service restaurants.
Cash App provides another avenue for growth through greater adoption of banking, lending and commerce products. Its gross profit increased 31% year over year in the second quarter, while consumer lending origination volume climbed 59%. Block is expanding Cash App Borrow, Afterpay and Cash App Card capabilities to encourage customers to use more services within the platform. The partnership with Workday also enables eligible employees to direct their paychecks into Cash App more easily, potentially supporting deposit inflows, customer engagement and recurring financial activity. It beat earnings in two of the past four quarters, missed once and met once, with an average surprise of 7.3%.
The integration of Square and Cash App through Neighborhoods represents another strategic initiative. The platform connects local merchants with Cash App customers through business discovery, rewards and repeat-purchase incentives. In August 2026, Neighborhoods added 30,000 sellers, expanding its network nearly tenfold from June. By connecting consumer spending with merchant services, XYZ has an opportunity to improve customer retention, generate additional payment activity and strengthen the relationship between its two ecosystems.
Block is also investing in artificial intelligence and banking infrastructure to improve efficiency and broaden its financial services capabilities. Its AI initiatives, including Managerbot, Moneybot and Buzz, are designed to automate business workflows and accelerate product development. Meanwhile, Square Financial Services is expanding deposit-taking and payment-acquiring capabilities, which could reduce external funding requirements and improve processing economics over time. XYZ raised its 2026 gross profit outlook to $12.51 billion, representing 21% annual growth, and expects a 28% adjusted operating income margin. These initiatives support its efforts to combine product expansion with greater operating efficiency, although lending-related credit risks and competitive pressures remain important considerations.
The company exited the second quarter of 2026 with cash and cash equivalents of $6.4 billion. It returned $700.9 million to its shareholders by repurchasing approximately 11.6 million shares of common stock in the first half of 2026. Its long-term debt-to-capital of 20.6% is lower than V’s 34.9%.
How Do Estimates Compare for V & XYZ?The Zacks Consensus Estimate indicates stronger earnings growth prospects for XYZ compared with V. The consensus estimate for V’s fiscal 2027 earnings indicates a 13% increase from a year ago, while the same for revenues suggests 10.4% growth.
On the other hand, the Zacks Consensus Estimate for XYZ's 2026 EPS indicates a 70.9% year-over-year improvement, and the same for revenues signals a 7.9% rise. The consensus estimate for XYZ’s 2027 earnings indicates another 28.9% growth.
Price Performance ComparisonIn the year-to-date period, V’s shares have gained 14.2%, while XYZ has risen 15.5%. The S&P 500 increased 12% during this time.
Valuation: V vs. XYZOn a price-to-sales basis, Visa sits at 14X forward revenues, significantly above Block’s multiple of 1.59X. XYZ's significantly lower P/S multiple suggests a more modest valuation, potentially offering greater upside if its growth initiatives translate into sustained profitability. Also, Block currently carries a Value Score of B, while Visa carries a Value Score of D.
Image Source: Zacks Investment Research
Price TargetVisa currently trades below its average analyst price target of $430.89, implying a 7.2% potential upside from current levels. Block also trades below its average analyst price target of $97.98, implying an attractive 30.9% potential upside from current levels.
ConclusionBoth Visa and Block are well-positioned to benefit from the expanding digital payments market. Visa’s extensive global network, growing value-added services and strong financial position support its long-term growth prospects. However, rising expenses and regulatory pressures remain concerns.
Block appears to offer greater upside potential, supported by its expanding Square and Cash App ecosystems, accelerating earnings growth prospects and strategic investments in AI and financial services. Its more attractive valuation and higher implied upside based on analyst price targets further strengthen its investment appeal, making XYZ the better pick at present, even though both companies currently carry a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AbbVie built its empire on a single blockbuster drug, then watched biosimilars gut it almost overnight. Whether the replacement pipeline saved investors or left them holding the bag depends on when they bought and whether they had the nerve to…
How AbbVie Outran the Humira Cliff
For AbbVie (NYSE:ABBV | ABBV Price Prediction), the last decade came down to one problem: life after Humira. AbbVie was spun off from Abbott Laboratories (NYSE:ABT) on January 1, 2013, and for years it relied on Humira, its flagship drug, for most of its cash flow. Humira lost U.S. exclusivity in early 2023, and biosimilars have taken a big share since. In Q2 2026, Humira sales fell 35.9% to $756M.
The replacement drugs arrived on time. Skyrizi grew 24.4% to $5.505B in Q2 2026, and Rinvoq rose 24.5% to $2.525B. The $63B Allergan deal, which closed in May 2020, brought in Botox, Vraylar, and an aesthetics business. Robert A. Michael took over as CEO in 2024. The pending $10.9B purchase of Apogee Therapeutics (NASDAQ:APGE) brings more depth to the immunology pipeline.
A Dividend That Tripled Along the Way
In 2016, AbbVie paid $0.57 per share each quarter. Today it pays $1.73, an increase of about 204%. The payout went up every year in the record, and the forward annual dividend now comes to $6.92, for a yield of roughly 2.30%. If you bought early and held, the cash you receive each year on your original investment has grown with every raise.
Your $1,000 grew to $7,464
AbbVie’s figures include dividends. The S&P 500 figures, measured with the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), count price gains only.
1-Year Return
Initial Investment: $1,000
Current Value: $1,294.40
Total Return: 29.44%
S&P 500: $1,124.10 (12.41%)
5-Year Return
Initial Investment: $1,000
Current Value: $2,981.70
Total Return: 198.17%
Annualized Return: 24.42%
S&P 500: $1,681.70 (68.17%)
10-Year Return
Initial Investment: $1,000
Current Value: $7,464.50
Total Return: 646.45%
Annualized Return: 22.26%
S&P 500: $3,633.70 (263.37%)
AbbVie beat the index over all three periods, and over 10 years it more than doubled the market’s price-only result. Part of that edge comes from reinvested dividends, and part from investors coming to believe the Skyrizi and Rinvoq transition would work. Holding on still took patience. The shares closed at $197.99 on April 29, 2026, then reached about $291.48 this morning.
What Could Drive or Derail AbbVie From Here
Optimism depends on Skyrizi and Rinvoq growing in the mid-20% range and Apogee working out. The worry is that Humira and Imbruvica fall faster than the new drugs can make up for. Imbruvica already dropped 29.4% last quarter.
On valuation, the trailing P/E of about 120 looks extreme because one-time acquisition charges have pushed reported earnings down. The forward P/E of about 18 tells a calmer story. My main concern is that the shares are trading above the average analyst target of $283.19, along with the question of where growth comes from after 2028. AbbVie also has negative shareholders’ equity, meaning its liabilities exceed its assets on the books, leaving little room for a deal misstep.
Income investors with a 10-year horizon may find AbbVie’s record worth exploring further. A dividend that has tripled since 2016 makes it easier to ride out the next pullback.
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Key Takeaways eBay's Q3 2026 non-GAAP EPS rose 11.9% to $1.51, while revenues gained 13.7% to $3.21B; both beat estimates.eBay's GMV rose 15.2% to $23.17B, led by a 27% U.S. gain, while first-party ad revenues jumped 16% to $575M.eBay's non-GAAP operating margin fell 70 basis points to 26.3%, while Q4 revenues are seen at $3.19B-$3.24B.
eBay Inc. (EBAY - Free Report) reported third-quarter 2026 non-GAAP earnings of $1.51 per share, increasing 11.9% year over year. The bottom line topped the Zacks Consensus Estimate by 5.59%.
Net revenues of $3.21 billion rose 13.7% year over year, beating the Zacks Consensus Estimate by 2.85%. Broad-based strength in focus categories and consumer-to-consumer activity lifted gross merchandise volume (GMV) 15.2% to $23.17 billion.
EBAY's Advertising Revenues Maintain MomentumFirst-party advertising products generated $575 million in revenues, up 16% year over year on both reported and foreign exchange-neutral bases. Promoted Listings and first-party display ads remain central to eBay's efforts to monetize marketplace traffic.
Total advertising revenues reached $607 million, up from $525 million in the year-ago quarter. Third-party advertising increased to $28 million from $22 million, while off-platform ad revenues declined to $4 million from $7 million. Advertising penetration was 2.7% of GMV, excluding Depop.
eBay Posts Regional GMV and Buyer Gains in Q3U.S. GMV increased 27% year over year to $12.55 billion. International GMV rose 4% to $10.62 billion. On an FX-neutral basis, consolidated GMV grew 16%, with U.S. volumes leading the expansion.
Active buyers climbed 10% to 147 million, including the acquired Depop business. Excluding Depop and Tise, active buyers totaled 136 million. The company's take rate, or revenues as a percentage of GMV, eased to 13.8% from 14% a year earlier.
EBAY Expands Recommerce, Live and DepopFocus Categories GMV increased 24% year over year on an FX-neutral basis, driven by collectibles, eBay Motors, fashion and refurbished items. The combined strategic priorities of focus categories, consumer-to-consumer commerce and recommerce accounted for 72% of GMV, excluding Depop, and grew approximately 20% on an FX-neutral basis.
eBay Live delivered another record quarter, with GMV growth well into triple digits across seven markets. Depop, acquired on July 30, 2026, more than doubled U.S. GMV, monthly active users and sold items year over year on a pro forma basis. eBay also expanded its AI-powered Magical Listing tools across six major markets.
eBay Margins Narrow as Expenses RiseGAAP operating expenses increased 17% year over year to $1.70 billion from $1.46 billion. Sales and marketing spending rose to $747 million from $606 million as eBay invested in Depop and strategic priorities. Product development expenses increased to $517 million from $455 million.
Non-GAAP operating income rose 10.9% to $843 million from $760 million, but the non-GAAP operating margin fell 70 basis points to 26.3%. The GAAP operating margin declined to 19.2% from 20.3%.
Non-GAAP net income rose 8.2% to $685 million, while diluted shares fell to 453 million from 467 million. GAAP earnings declined to $1.11 per share from $1.27 as the effective tax rate moved to 17.1% from negative 4.3%.
EBAY’s Balance Sheet & Cash FlowAs of Sept. 30, 2026, cash and cash equivalents and non-equity investments totaled $3.3 billion, down sequentially from $4.9 billion as of June 30, 2026.
Long-term debt declined marginally to $5.13 billion at the end of the third quarter from $5.14 billion in the prior quarter.
eBay repurchased $689 million in shares and paid $138 million in dividends, returning $827 million to its stockholders. About $1.3 billion remained under its buyback authorization at quarter-end. Cash and non-equity investments fell sequentially to $3.35 billion from $4.85 billion, while total debt was $6.73 billion.
In the reported quarter, cash flow from continuing operations was $875 million, down from $900 million in the prior-year quarter. Free cash flow declined to $749 million from $803 million, as purchases of property and equipment rose to $126 million from $97 million.
eBay Projects Continued Growth for Q4 and 2026For the fourth quarter of 2026, eBay expects revenues of $3.19-$3.24 billion and GMV of $23.70-$24.10 billion. Non-GAAP earnings are projected at $1.48-$1.53 per share, with non-GAAP operating income between $820 million and $850 million.
Depop is expected to contribute roughly four percentage points to FX-neutral GMV growth. Management expects GMV to outpace revenue growth partly because of Depop's mix and U.K. managed-shipping accounting.
For full-year 2026, projected revenues are $12.62-$12.67 billion and GMV is $91.50-$91.90 billion. Non-GAAP earnings are forecast at $6.25-$6.30 per share, with non-GAAP operating income projected at $3.46-$3.49 billion. Management targets roughly $2 billion of share repurchases for the year.
EBAY’s Zacks Rank & Other Stocks to ConsiderCurrently, eBay carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Retail-Wholesale sector are Arcos Dorados (ARCO - Free Report) , Best Buy Co., Inc. (BBY - Free Report) and FIGS, Inc. (FIGS - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arcos Dorados’ shares have declined 5.7% year to date. ARCO is set to report its third-quarter 2026 results on Nov. 12.
Best Buy’s shares have gained 44.9% year to date. BBY is slated to report its third-quarter fiscal 2027 results on Nov. 24.
FIGS’ shares have surged 81.9% year to date. FIGS is slated to report its third-quarter 2026 results on Nov. 5.
