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SouthState Bank Corporation (SSB) Q2 2026 Earnings Call July 24, 2026 9:00 AM EDT

Company Participants

William Matthews - Senior Executive VP & CFO
John Corbett - CEO & Chairman
Stephen Young - Senior Executive VP & Chief Strategy Officer

Conference Call Participants

Stephen Scouten - Piper Sandler & Co., Research Division
John McDonald - Truist Securities, Inc., Research Division
Hannah Wynn - Keefe, Bruyette, & Woods, Inc., Research Division
Michael Rose - Raymond James & Associates, Inc., Research Division
Sun Young Lee - TD Cowen, Research Division
Gary Tenner - D.A. Davidson & Co., Research Division
Anthony Elian - JPMorgan Chase & Co, Research Division
Benjamin Gerlinger - Citigroup Inc., Research Division
David Chiaverini - Jefferies LLC, Research Division
David Bishop - Hovde Group, LLC, Research Division
Samuel Varga - UBS Investment Bank, Research Division

Presentation

Operator

Hello, everyone. Thank you for joining us, and welcome to the SouthState Bank Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference call over to Will Matthews, Chief Financial Officer. Mr. Matthews, please go ahead.

William Matthews
Senior Executive VP & CFO

Good morning. This is Will Matthews, and welcome to SouthState's Second Quarter 2026 Earnings Call.

I'm here with John Corbett, Steve Young and Jeremy Lucas. We'll follow our typical pattern of brief prepared remarks and then move into Q&A. And I'll refer you to the Investor Relations tab of our website for the earnings materials.

Before we begin our remarks, I want to remind you that comments we make may include forward-looking statements within the meaning of the federal securities laws and regulations. Any such forward-looking statements we may make are subject to the safe harbor rules. Please review the forward-looking disclaimer and safe harbor language in the press release and presentation for more information about our forward-looking statements and risks and uncertainties, which may affect us.

Consumer-Driven Stocks Boost Buybacks, Including Visa's $20B PlanByline Bancorp NYSE: BY reported record second-quarter net income of $40.2 million, or $0.90 per diluted share, as revenue increased and expenses declined from the prior quarter. Adjusted earnings per share were $0.91, up 10% sequentially and 21% from a year earlier, President Alberto Paracchini said during the company’s earnings call.

The Chicago-based commercial bank posted a 1.63% return on average assets and a return on average common equity of just under 14.5%. Its pre-tax, pre-provision return on assets was 2.49%, marking the company’s 15th consecutive quarter above 2%, according to management.

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Could This Entertainment Stock be the Belle of the Gaming Ball?“We delivered net income of $40.2 million or $0.90 per diluted share,” Paracchini said. “Record net income and excellent profitability really stood out this quarter.”

Revenue Growth and Efficiency Improvement Revenue totaled $118 million, up 4.7% from the prior quarter, while non-interest expenses fell. The adjusted efficiency ratio improved to 46.5% from 49.8% in the first quarter, which Paracchini described as the company’s best result since becoming a public company in 2017.

Boyd Gaming stock: All signs point to a significant break higherNet interest income was $101 million, up modestly from the preceding quarter. Net interest margin declined 5 basis points to 4.28%, primarily reflecting higher funding costs associated with a maturing balance-sheet hedge and changes in earning-asset mix, CFO Tom Bell said.

Management emphasized that it prioritizes growth in net interest income dollars rather than managing to a particular margin target. Paracchini said the bank may accept lower spreads on high-quality, relationship-oriented business if it is accretive to earnings and supports long-term franchise value.

For the third quarter, Byline projected net interest income of $100 million to $102 million, non-interest income of $14 million to $15 million, and gain-on-sale revenue averaging about $5.5 million per quarter. The company maintained its full-year non-interest expense outlook of $59 million to $60 million per quarter.

Bell said second-half expenses are expected to rise due largely to employee-related costs, including health care benefits and commissions tied to production. Management also said potential opportunities to hire banking talent are included in its outlook.

Loans, Deposits and Rate Environment Total loans ended the quarter at $7.6 billion, increasing at a 4.2% annualized rate. New originations totaled $234 million, while payoffs were elevated at $339 million. Loan commitments rose slightly, and line utilization increased to 60% from 59% in the prior quarter.

Management expects full-year loan growth in the mid-single digits if payoff activity normalizes in the second half. Paracchini said the recent elevated payoff activity partly reflects the bank’s effort to recycle acquired loan portfolios into new customer relationships.

Total deposits reached $7.9 billion, rising at a 3.5% annualized rate. Growth in interest-bearing checking balances was partly offset by lower money-market balances. The loan-to-deposit ratio ended the quarter at 96%.

Byline said competition for both loans and deposits remains elevated. Paracchini said price competition has intensified in commercial real estate, particularly as larger institutions return to certain segments of that market. He cited multifamily and industrial properties as areas where more capital is competing for a reduced level of transaction activity.

Bell said the company remains focused on relationship deposits rather than more rate-sensitive funding. He added that commercial customers moving balances from money-market accounts to interest-bearing checking could indicate they anticipate uses for that capital.

Credit Trends Remain Favorable Credit costs were $7.2 million during the quarter, including $4.4 million of net charge-offs and a $2.8 million reserve build. Net charge-offs equaled 24 basis points of loans, down from 32 basis points in the first quarter.

Criticized loans declined to 3.9% of total loans from 4.5% both sequentially and from a year earlier. Nonperforming loans totaled $69.1 million, or 92 basis points of total loans, up marginally from the prior quarter and flat year over year. The allowance for credit losses rose to $112 million, or 1.48% of total loans.

Chief Credit Officer Mark Fucinato said the decline in criticized and classified loans reflected improved performance at several larger operating companies, as well as the resolution of a workout situation in which an operating company sold a mortgaged asset and repaid its exposure in full. The bank also recorded a recovery on a prior charge-off.

Paracchini said management’s near-term expectation for net charge-offs remains in the range of 30 to 40 basis points, although he expects that level may migrate lower over time as the SBA portfolio becomes a smaller part of Byline’s overall balance sheet.

Capital Returns and $10 Billion Threshold Byline ended the quarter with total assets of $9.9 billion. Tangible common equity rose to 11.4%, while the common equity tier 1 ratio reached 12.9%. Tangible book value per share increased 14% from a year earlier to $24.48.

During the quarter, the company repurchased about 275,000 shares for $9.1 million. Including dividends and buybacks, its total shareholder payout ratio was 36%.

The board also approved a 16.7% increase in the quarterly dividend to $0.14 per share. Paracchini said the increase reflects the company’s capital position and earnings profile.

Management said it continues preparing to cross the $10 billion asset threshold. Paracchini said the company is not currently constraining normal balance-sheet activity to stay below that level, but it could manage the balance sheet near year-end if doing so would delay the effects of the Durbin amendment until mid-2028.

On acquisitions, Paracchini described the environment for smaller-bank transactions as constructive. He said Byline would generally seek deals with tangible book value earn-backs within three years, while continuing to weigh acquisitions against organic growth, investments in the business and share repurchases.

About Byline Bancorp (NYSE:BY)Byline Bancorp, Inc is the bank holding company for Byline Bank, a full-service commercial bank headquartered in Chicago, Illinois. Established under its current name in 2016, the company operates as a community-focused financial institution offering a broad array of banking products and services to corporate, professional and consumer clients.

On the commercial banking side, Byline Bancorp serves small and midsize businesses, real estate developers, professional services firms and nonprofit organizations.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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AI, Satellites and Staples: Insiders Are Buying and Selling 3 Big NamesLamb Weston NYSE: LW reported higher fourth-quarter sales and continued volume growth in fiscal 2026, led by North America, while international operations faced pressure from weaker European demand, higher costs and disruption tied to the Middle East conflict.

Fourth-quarter net sales increased 6% from a year earlier, including a 7% increase in sales volume and a 2% favorable currency effect, partly offset by a 3% decline in price and mix. On a constant-currency basis, net sales rose 4%. The quarter marked Lamb Weston's sixth consecutive quarter of sales-volume growth.

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Frozen Out: Lamb Weston Beats Earnings, but the Stock Still Slides“We made meaningful progress as an organization in fiscal 2026,” President and CEO Mike Smith said, pointing to the stabilization of the company’s North American business, progress on cost savings and reduced capital spending.

North America drives quarterly performance North America net sales rose 9% in the fourth quarter, as volume increased 11%, supported by customer wins, share gains, retention and an extra week in the fiscal calendar. Price and mix declined 2%, with price investments and a shift toward lower-priced channels, including chains and private label, each contributing to the decline.

5 Under-the-Radar Consumer Staples Stocks With Pricing PowerNorth American segment EBITDA increased 17%, or $45 million, in the quarter. Smith said volume growth, modest price-and-mix investment and cost savings more than offset inflation. The segment ended the fiscal year with a 26% EBITDA margin, according to Smith.

U.S. restaurant traffic was flat during the quarter, based on Circana Crest data cited by Chief Financial Officer Jim Gray. Quick-service restaurant traffic was also flat, as 3% growth in quick-service chicken traffic was largely offset by a 4% decline in quick-service burger traffic.

Smith said the company extended several large customer contracts during the year, supported customer rollouts and introduced higher-margin limited-time offers. He also said Lamb Weston’s U.S. net promoter score rose from the prior year and was the highest among major competitors, according to the company’s proprietary research.

For the full fiscal year, North America net sales increased 3%, with a 9% volume increase partly offset by a 6% price-and-mix decline. The company said the 53rd week in fiscal 2026 added $86 million to annual North American sales.

International business faces EMEA headwinds International net sales declined 2% in the fourth quarter. Sales volume fell 2% and price and mix declined 4%, while currency provided a partial offset. Growth in Asia-Pacific and Latin America was more than offset by conditions in Europe, the Middle East and Africa, including shipment disruption and higher freight costs resulting from the Middle East conflict.

Gray said quick-service traffic declined 2% in the U.K. and France and 1% in Italy during the quarter, while traffic rose slightly in Germany and Spain. The company also faced higher raw potato costs, lower fixed-cost absorption amid slower European demand and higher freight expenses.

For the full year, international sales increased 1%, aided by a 5% currency benefit and 2% volume growth, particularly in Asia-Pacific and Latin America. Price and mix declined 6%. On a constant-currency basis, international sales declined 4%.

International EBITDA declined for the year due to lower organic sales in a competitive environment and higher manufacturing costs. The higher costs included write-offs of excess potatoes, lower utilization at international plants and startup expenses at the company’s Argentina facility.

Lamb Weston temporarily curtailed a line in the Netherlands during the fourth quarter and announced plans in June to close an older plant in Broekhuizenvorst, Netherlands. Smith said the facility represents about 10% of EMEA production capacity. He said the closure is expected to improve utilization by roughly 10 percentage points, moving utilization into the high-80% to low-90% range.

Executive Chair Jan Craps said the company is conducting a broader strategic review of its international footprint, evaluating country clusters, profit pools, resource allocation and potential roles for mergers and acquisitions, partnerships or divestitures. “Technically, everything is on the table,” Craps said in response to an analyst question, adding that more details are expected at an investor day planned for early calendar 2027.

Cash flow, cost savings and shareholder returns Full-year adjusted EBITDA declined 9%, as international challenges only partly offset gains in North America. The extra week added $29 million in adjusted EBITDA for the year.

The company generated $943 million of operating cash flow, up $75 million from the prior year, helped by $55 million of favorable working-capital changes. Capital expenditures fell by more than $240 million year over year to $410 million, resulting in free cash flow of $537 million.

Lamb Weston returned $321 million to shareholders during fiscal 2026, including $208 million in cash dividends and $113 million in share repurchases. The company repurchased $63 million of stock during the fourth quarter. It also declared a quarterly dividend of $0.38 per share, payable Sept. 4.

At year-end, the company had approximately $1.3 billion available under its revolving credit facility. Net debt was $3.8 billion, and its net debt-to-adjusted EBITDA leverage ratio was 3.4 times on a trailing 12-month basis.

Smith said the company exceeded its first-year cost-savings milestone under a program targeting at least $250 million in annualized run-rate savings by the end of fiscal 2028. The first-year target had been $100 million. Savings have come from supply-chain improvements, lower manufacturing cost per pound and reduced selling, general and administrative expenses, he said.

Fiscal 2027 outlook For fiscal 2027, Lamb Weston expects net sales ranging from flat to up 1% compared with a 52-week adjusted fiscal 2026 sales base of $6.5 billion. The company forecast adjusted operating income of $720 million to $800 million, adjusted EBITDA of $1.1 billion to $1.2 billion and adjusted earnings per share of $2.95 to $3.25, compared with adjusted EPS of $2.90 for the comparable 52-week fiscal 2026 period.

The outlook assumes flat global restaurant traffic. Gray said lower raw potato costs, further supply-chain savings, higher utilization and the absence of prior-year potato write-offs and Argentina startup costs are expected to be largely offset by inflation in other inputs.

North America sales are expected to range from flat to up low single digits on a comparable-week basis, with low-single-digit volume growth and a low-single-digit price-and-mix decline. International sales are expected to decline by low single digits, reflecting competitive conditions in EMEA, while international EBITDA is projected to improve 40% to 50% as prior-year charges are lapped. First-quarter fiscal 2027 sales are expected to be flat and EBITDA is expected to decline by the low teens before earnings growth accelerates through the remainder of the year. The company expects operating cash flow of $750 million to $800 million and capital expenditures of approximately $380 million to $410 million in fiscal 2027. On an accrual basis, it expects investments of up to $350 million as it applies tighter capital-allocation discipline.

About Lamb Weston (NYSE:LW)Lamb Weston, traded on the NYSE under the symbol LW, is a leading global processor and supplier of frozen potato products. The company's portfolio includes a variety of potato-based items such as French fries, potato wedges, hash browns and specialty cuts tailored to the foodservice and retail grocery channels. Lamb Weston serves quick-service restaurants, full-service operators, grocery chains and food distributors, offering customized product formats, packaging solutions and seasoning options to meet evolving customer demands.

Founded in 1950 and headquartered in Eagle, Idaho, Lamb Weston has grown from a regional processor into one of the world's largest producers of frozen potato products.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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A month has gone by since the last earnings report for Paychex (PAYX - Free Report) . Shares have added about 14.4% 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 Paychex 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 drivers.

Paychex's Q4 Earnings:Paychex, Inc. reported solid fourth-quarter fiscal 2026 results, with adjusted earnings beating the Zacks Consensus Estimate and revenues coming in line. Adjusted earnings of $1.32 per share surpassed the consensus estimate of $1.31 by a slight margin and increased 10.9% from the year-ago quarter. Total revenues of $1.61 billion rose 12.5% year over year and beat the consensus estimate by a slight margin.

The earnings upside was backed by segment growth, Paycor contributions and disciplined expense performance. Management Solutions led the quarter, while PEO and Insurance Solutions, and client fund interest added further support.

PAYX's Management Solutions Powers GrowthManagement Solutions’ revenues increased 14% year over year to $1.18 billion in the fiscal fourth quarter. The segment benefited from higher product penetration and growth in client worksite employees within Human Resources Solutions.

Paycor, acquired in April 2025, contributed about 8 percentage points to Management Solutions revenue growth. The acquisition also supported price realization and higher revenues per client, reflecting Paycor’s upmarket client base.

Management noted that the quarter included a full period of Paycor revenues and expenses compared with a partial period in the prior-year quarter. That comparison helped drive the sharper contribution from the acquired business in the latest quarter.

Paychex's PEO & Client Funds Add SupportProfessional Employer Organization and Insurance Solutions revenues were $369.7 million, up 9% from the year-ago quarter. Growth in the number of average PEO worksite employees supported the segment’s performance.

PEO insurance revenues also increased during the quarter. Interest on funds held for clients rose 15% to $52.2 million, driven by higher average investment balances resulting from the Paycor acquisition.

Total service revenues came in at $1.55 billion, up 12% from the year-ago period. The broad advance across core services showed that growth was not confined to one operating line.

PAYX's Margin Profile Expands in Q4Total expenses were relatively flat year over year at $1 billion. Increases in compensation-related expenses, amortization of intangible assets, technology investments, selling initiatives and marketing spending were offset by lower acquisition-related compensation and professional service costs.

Operating income rose 40% to $604.7 million. The operating margin expanded to 37.7% from 30.2% a year earlier, while the adjusted operating margin improved to 42.1% from 40.4%.

Adjusted operating income increased 17% to $675.8 million. The adjusted figure excludes acquisition-related costs, which were lower than in the prior-year quarter.

Paychex's Profitability Shows Earnings LeverageNet income increased 41% year over year to $420.6 million in the fiscal fourth quarter. Diluted earnings were $1.17 per share, up 43% from the prior-year period.

Adjusted net income rose 10% to $474.6 million. EBITDA increased 39% to $719.1 million, while adjusted EBITDA advanced 17% to $729.7 million, reflecting revenue gains and reduced acquisition-related drag.

Interest expenses increased to $64.7 million from $63.7 million. Other income, net, declined to $14.2 million from $21.9 million due to lower average balances on corporate investments and higher share repurchases in fiscal 2026.

PAYX's Balance Sheet Remains SolidPaychex ended fiscal 2026 with cash, restricted cash and total corporate investments of $1.2 billion. Short-term and long-term borrowings, net of debt issuance costs, totaled $4.6 billion as of May 31, 2026.

Cash flow from operations was $2.6 billion for the fiscal year. The company paid out cumulative dividends of $4.43 per share, totaling $1.6 billion, and repurchased 5.6 million shares for $611 million.

Fiscal 2026 total revenues increased 17% to $6.51 billion. Adjusted diluted earnings advanced 11% to $5.51 per share, whereas adjusted operating income grew 19% to $2.81 billion.

Paychex's FY27 View Points to GrowthFor fiscal 2027, Paychex expects total revenues to grow 5-6%. Management Solutions’ revenues are also projected to rise 5-6%, while PEO and Insurance Solutions revenues are expected to increase 6-7%.

Interest on funds held for clients is expected to be $195-$205 million. The company anticipates an adjusted operating margin of 44%, an effective income tax rate of 24% and adjusted diluted earnings growth of 7-9%.

Paychex also highlighted the launch of WISE, its AI-powered intelligence engine, across HCM platforms and internal operations. Management said that the platform is designed to unlock insights from unstructured data, increase productivity and enhance client outcomes.

Adjusted earnings of 99 cents per share beat the Zacks Consensus Estimate by 4.2% and increased 8.8% on a year-over-year basis. Total revenues of $1.2 billion also beat the Zacks Consensus Estimate by 0.5% and increased 7.4% year over year.

Revenues in Detail     

Revenues from Management Solutions segment increased 8% year over year to $895.3 million. The segment benefited from growth in the number of client employees served for human capital management (HCM) and additional worksite employees for HR Solutions. Also, improved revenue per client on price realization and higher product penetration, strong demand for HR Solutions, retirement, time and attendance solutions and expansion of HCM ancillary services acted as tailwinds.

Professional employer organization (“PEO”) and Insurance Solutions’ revenues were $273.3 million, up 4% from the year-ago quarter’s level. The uptick was owing to growth in the number of average worksite employees. Interest on funds held for clients increased 54% year over year to $21.7 million.

Operating Performance

Operating income increased 7% year over year to $472.3 million. EBITDA of $518.6 million increased 4.7% year over year.

Balance Sheet & Cash Flow

Paychex exited second-quarter fiscal 2022 with cash and cash equivalents of $1.1 billion compared with $1.18 billion reported at the end of the prior quarter. Long-term debt was $797.9 million compared with $797.8 million in the prior quarter. Cash provided by operating activities was $321.6 million in the reported quarter. During the reported quarter, PAYX paid out $284.7 million as dividends.

Fiscal 2023 View Tweaked

Paychex upped its adjusted earnings per share view with respect to year-over-year growth for fiscal 2023. Adjusted EPS is now expected to register 12-14% growth compared with the prior expectation of 11-12% growth. PAYX continues to expect total revenues to register 8% (prior view: 7-8%) growth. Management Solutions’ revenues are expected to grow 7-8% (prior view: 5-7%). PEO and Insurance Solutions’ revenues are expected to grow 5-7% (prior view: 8-10%).

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in estimates revision.

VGM ScoresAt this time, Paychex has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paychex has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Key Takeaways PHM beat Q2 earnings and revenue estimates, though both declined from the prior year.PHM's $131 target offers modest upside as shares trade above key homebuilding valuation benchmarks.Buybacks and low leverage support PHM, but 2026 earnings and revenues are projected to fall. PulteGroup, Inc. (PHM - Free Report) gave investors a mixed second-quarter readout. Earnings and revenues topped expectations, but both fell from the prior year as closings, pricing and margins weakened.

The investment case now rests on balance. PHM offers capital returns, a solid balance sheet and modest price-target upside, but growth estimates and margins remain under pressure.

PHM Beats Estimates Despite Lower EarningsAdjusted earnings were $2.48 per share, topping the Zacks Consensus Estimate of $2.38 by 4.2%. Total revenues of $3.983 billion edged past the consensus mark of $3.980 billion by 0.1%.

The beat did not erase the year-over-year decline. Earnings fell 18.2% from $3.03 per share, while total revenues decreased 9.6% as lower closings and softer average selling prices weighed on results.

PulteGroup’s Valuation Offers Limited UpsidePHM’s $131 price target compares with a reported share price of $124.67, leaving only modest potential appreciation. That limits the valuation argument, even though the company continues to generate orders and return capital.

The stock traded at 11.85 times forward earnings, above the sub-industry’s 10.88 multiple and PHM’s five-year median of 8.33. It still traded well below the broader construction sector and the S&P 500, keeping the valuation picture mixed rather than clearly cheap.

D.R. Horton (DHI - Free Report) and Lennar Corporation (LEN - Free Report) remain relevant comparisons because both operate as national homebuilders facing similar affordability and margin pressures. D.R. Horton describes itself as the largest U.S. homebuilder by volume, while Lennar is commonly tracked alongside DHI and PHM in homebuilding comparisons.

PHM’s Forecasts Point to a Difficult 2026Current projections call for 2026 revenues of $16.404 billion, down from $17.312 billion in 2025. Expected earnings are $10.01 per share, compared with $11.44 in 2025.

Estimates point to improvement in 2027, with revenues projected at $17.045 billion and earnings at $11.09 per share. The timing and durability of that recovery are central to whether PHM’s valuation can become more appealing.

PulteGroup Returns Capital While Funding GrowthPHM repurchased 3.1 million shares for $373 million in the second quarter. First-half repurchases totaled 5.5 million shares, or roughly 3% of outstanding shares, for $681 million.

The company maintained a quarterly dividend of 26 cents per share and had $1.8 billion remaining under its repurchase authorization. It is also funding land investment, though first-half operating cash flow fell to $176.8 million from $421.7 million as inventories increased.

PHM’s Balance Sheet Limits Financial RiskPulteGroup ended June with $1.38 billion in cash, cash equivalents and restricted cash. Its debt-to-capital ratio was 12.3%, while net debt-to-capital was 3.3%, giving the company financial flexibility in a softer housing cycle.

The land pipeline also supports flexibility. PHM controlled about 228,000 lots, with 55% held through option agreements, limiting upfront ownership exposure when demand is uncertain.

PHM’s Scores Support a Selective ApproachThe bottom line is that PHM looks more balanced than broadly attractive. The earnings beat, buybacks and balance sheet help, but declining estimates and margin compression keep the risk-reward selective.

PHM currently carries a Zacks Rank #2 (Buy), with a Value Score of B, Momentum Score of B and VGM Score of B. Those grades provide positive near-term signals, while the Growth Score of D reflects weaker projected earnings and sales trends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock may suit investors focused on disciplined capital returns and balance-sheet strength. Investors prioritizing immediate growth may need clearer evidence that earnings, revenues and margins are stabilizing.

Key Takeaways Humana is expected to post strong Q2 revenue growth driven by higher premiums and Medicare expansion.HUM's rising Insurance and CenterWell operating income support earnings beat hopes.Higher opex, weaker investment income and a rising benefits expense ratio may partially offset positives. Humana Inc. (HUM - Free Report) is set to report second-quarter 2026 results on July 29, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $6.22 per share on revenues of $40.65 billion.

The second-quarter earnings estimate has witnessed three upward revisions and no movement in the opposite direction over the past 60 days. However, the bottom-line projection indicates a year-over-year decrease of 0.8%. Yet, the Zacks Consensus Estimate for quarterly revenues implies year-over-year growth of 25.5%.

Image Source: Zacks Investment Research

For full-year 2026, the Zacks Consensus Estimate for Humana’s revenues is pegged at $162.60 billion, implying a rise of 25.3% year over year. However, the consensus mark for current-year EPS is pegged at $9.25, implying a plunge of around 46% on a year-over-year basis.

HUM’s earnings beat the consensus estimate in three of the trailing four quarters and missed once, with the average surprise being 3.8%.

Q2 Earnings Whispers for HUMOur proven model predicts a likely earnings beat for the company this time around as well. 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. That is precisely the case here.

Humana has an Earnings ESP of +1.71% and a Zacks Rank #1. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

What’s Shaping HUM’s Q2 Results?The Zacks Consensus Estimate for HUM’s second-quarter premiums indicates a 25.6% increase from the prior-year quarter’s reported figure, whereas our model predicts 24% growth. We expect total Medicare to witness 26.6% growth in the quarter under review. Similarly, the consensus mark for service revenues signals a 22.3% increase from a year ago, whereas our model predicts a nearly 16% jump.

Also, the Zacks Consensus Estimate for insurance membership predicts a 18.2% year-over-year growth, whereas specialty membership is expected to rise 3.7%.

The Zacks Consensus Estimate for operating income from the Insurance unit indicates 10.2% growth from a year ago. The same for the CenterWell unit predicts a 12.8% growth from the year-ago level. The above-mentioned factors are expected to have positioned the company for an earnings beat in the second quarter.

However, the consensus estimate indicates that Humana’s investment income will see a 13.5% drop from the year-ago level. We expect total operating costs to increase 24.4% in the second quarter, bringing the figure above $38.9 billion. This is likely to have led to a year-over-year decline in the bottom line.

The consensus mark for insurance benefits expense ratio is pegged at 91.3% for the to-be-reported quarter, deteriorating from 89.9% a year ago. These are likely to have partially offset the positives.

How Did Peers Perform?Several healthcare companies, including UnitedHealth Group Incorporated (UNH - Free Report) , Molina Healthcare, Inc. (MOH - Free Report) and Elevance Health, Inc. (ELV - Free Report) , have already reported their financial results for the June quarter of 2026. Here’s how they performed:

UnitedHealth reported second-quarter 2026 adjusted EPS of $6.38, which beat the Zacks Consensus Estimate of $4.94. The bottom line rose 56.4% year over year. Its strong quarterly results were aided by growth in commercial fee-based membership and the strength witnessed in Optum Insight. Medical cost management, pricing discipline and benefit design changes also contributed to the upside. However, weakness in UNH’s Optum Health, Optum Rx and declining risk-based membership partially offset the positives.

Molina reported second-quarter 2026 adjusted EPS of $1.51, which beat the Zacks Consensus Estimate by 10.2%. But the bottom line declined 72.4% from the year-ago period's level. MOH’s earnings benefited from lower operating expenses. However, lower premium revenues, declining membership, and weaker investment income weighed on its performance.

Elevance reported second-quarter 2026 adjusted EPS of $7.45, which surpassed the Zacks Consensus Estimate by 20.6%. However, the bottom line declined 15.7% year over year.The quarterly results were primarily driven by higher premium yields in the Health Benefits segment and increased CarelonRx product revenues. The upside was partly offset by a decline in ELV’s overall medical membership and an elevated expense level.

Key Takeaways Cencora is positioned for growth on U.S. healthcare strength, specialty expansion and product launches.COR is integrating OneOncology and RCA to build a scalable specialty care ecosystem across key therapies.Cencora faces pricing headwinds, higher interest expense and regulatory risks despite logistics gains. Cencora (COR - Free Report) is well-poised for growth on the back of a robust U.S. Healthcare Solutions business and product launches. However, intense competition is a concern.

This Zacks Rank #2 (Buy) company’s shares have lost 9.7% in the year-to-date period compared with the industry’s 1.8% drop. However, the S&P 500 Index has gained 7.4% in the same time frame.

Cencora is one of the world’s largest pharmaceutical service companies. It is focused on providing drug distribution and related services to reduce healthcare costs and improve patient outcomes. The company has a market capitalization of $58.48 billion.

COR’s bottom line is anticipated to improve 10.1% over the next five years. Its earnings beat estimates in three of the trailing four quarters and missed in one, delivering an average surprise of 1.6%.

Image Source: Zacks Investment Research

Let’s delve deeper.

Positive Factors Driving COR’s ProspectsSpecialty Expansion and MSO Strategy Support Long-Term Growth: Cencora continues to strengthen its position in specialty pharmaceuticals, a market expected to account for more than half of U.S. drug spending in the coming years. During the second-quarter earnings call, management highlighted progress in integrating OneOncology, acquired in February 2026, with Retina Consultants of America (RCA). Management is leveraging both platforms by sharing capabilities in clinical research, trial support and back-office services, creating a scalable specialty care ecosystem. These investments complement Cencora's broader strategy of deepening manufacturer partnerships while expanding services to community providers, positioning the company to benefit from growing demand for oncology, retina and other specialty therapies.

Pharmaceutical Supply Chain Leadership and Expanding Market Opportunity: Cencora's pharmaceutical-centric strategy remains a competitive advantage. The company continues investing in automated fulfillment centers, digital infrastructure and AI-supported tools that improve inventory management, customer visibility and operational efficiency across the pharmaceutical supply chain. These capabilities reinforce Cencora's role as a critical partner for manufacturers and healthcare providers while supporting long-term customer relationships.

The long-term demand backdrop also remains favorable. Industry forecasts project U.S. pharmaceutical spending to grow at an 8.2% CAGR through 2028, supported by rising prescription volumes, specialty therapies and broader patient access. Cencora is well positioned to benefit from sustained GLP-1 utilization, which contributed nearly $1.9 billion of year-over-year sales growth during the quarter despite moderating growth expectations.

International Business and Specialty Logistics Continue to Improve: Cencora's International Healthcare Solutions segment remained another bright spot. International revenues increased 13% year over year, while operating income rose 13.7%, driven by strong European distribution performance and a second consecutive quarter of operating income growth in global specialty logistics. Management highlighted new contract wins in cell and gene therapies, laboratory logistics and continued momentum at World Courier, reflecting improving execution in complex pharmaceutical logistics.

Key Challenges for COR StockRevenue Mix and Pricing Headwinds Could Pressure Reported Growth: Although prescription demand remains healthy, several factors continue to weigh on reported revenue growth. During the second quarter, manufacturer list price reductions created a roughly $2 billion revenue headwind, while faster-than-expected brand conversions at a large mail-order customer and slower GLP-1 growth prompted management to lower full-year revenue guidance. While these factors have a limited effect on operating income because they primarily involve lower-margin products, they can create volatility in reported sales growth and investor sentiment.

Higher Debt and Ongoing Regulatory Risks Remain Watch Points: The OneOncology acquisition has strengthened Cencora's specialty platform but also increased leverage. Net interest expense rose following the acquisition, and management expects approximately $485 million of interest expense in fiscal 2026 despite continued debt repayment efforts.

Beyond leverage, Cencora operates in a highly regulated pharmaceutical distribution environment. Ongoing opioid-related litigation exposure, controlled-substance monitoring requirements and evolving healthcare reimbursement policies could increase compliance costs or create operational challenges, even as the company continues investing in supply-chain integrity and regulatory compliance.

Estimate TrendCOR has been witnessing a stable estimate revision trend for fiscal 2026. In the past 30 days, the Zacks Consensus Estimate for earnings has remained stable at $17.79 per share.

The consensus mark for third-quarter fiscal 2026 revenues is pegged at $84.89 billion, indicating a 5.2% improvement from the year-ago reported actuals. The bottom-line estimate is pinned at $4.37, implying year-over-year growth of 9.2%.

Other Stocks to ConsiderSome other top-ranked stocks from the broader medical space are West Pharmaceutical (WST - Free Report) , Cardinal Health (CAH - Free Report) and McKesson (MCK - 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.

West Pharmaceutical has an estimated long-term earnings growth rate of 14.4%. WST’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.4%.

West Pharmaceutical’s shares have gained 29.2% against the industry’s 1.6% decline in the year-to-date period.

Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in the trailing four quarters, the average surprise being 10.3%.

Cardinal Health’s shares have risen 9.9% against the industry’s 1.6% decline in the year-to-date period.

McKesson has a long-term estimated growth rate of 13.7%. MCK’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.1%.

McKesson’s shares have edged up 0.5% against the industry’s 1.6% decline in the year-to-date period.

A month has gone by since the last earnings report for H. B. Fuller (FUL - Free Report) . Shares have lost about 11% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is H. B. Fuller due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.

Key highlightsH.B. Fuller logged earnings (as reported) of $1.23 per share for the second quarter of fiscal 2026 (ended May 30, 2026), compared with 76 cents reported a year ago.

Barring one-time items, adjusted earnings for the quarter were $1.41 per share, up 19% year over year. It beat the Zacks Consensus Estimate of $1.37.

The company posted revenues of $950.3 million, up around 6% year over year. It surpassed the Zacks Consensus Estimate of $927 million. Organic growth was up 2.6%.

Adjusted EBITDA was $181 million, up 9% year over year, with a margin of 19.1% versus 18.4% a year ago.

Revenue growth was driven by pricing and currency, offsetting modest volume weakness. Margin expansion in the quarter reflected realized pricing and Quantum Leap restructuring, partially offset by higher variable compensation and currency impacts.

Segment PerformanceHHC: Revenues were $421.9 million with organic revenue up 3% year over year. Adjusted EBITDA was $75.6M (up 22% y/y) with a margin of 17.9%, up 230 basis points (bps). Strength was seen in medical, tape & label and end-of-line packaging, offset by weak flexible packaging.

EA: Revenues were $283.2 million with organic growth of roughly 5% excluding solar exit. Aerospace was up 30% while electronics and general industries rose by double digits. Automotive declined by mid-single digits. Adjusted EBITDA was $63.5 million (flat year over year), with a margin of 22.4% (down 50 bps) due to higher variable comparisons.

BAS: Revenues were $245.2 million with organic growth of 6%. Adjusted EBITDA of $41.4 million rose 10% year over year with a margin of 16.9% (up 20 bps), led by glass and infrastructure/mechanical strength.

Cash Flow, Balance Sheet, Capital AllocationOperating cash flow was $121 million (a second-quarter record), supporting roughly 750,000 share repurchases in the quarter. Net leverage improved to 3.1x. Management continues Quantum Leap restructuring and Project ONE ERP, which are contributing to efficiency and margin gains.

GuidanceThe company expects fiscal 2026 (ex-AMS) net revenues to be up mid-single digits with organic growth of low single digits. Currency impacts are expected to be positive 1-2%.

Adjusted EBITDA is projected to be $650-$675 million. Adjusted earnings per share for fiscal 2026 are now forecast to be $4.60-$4.90.

Cash flow from operations for fiscal 2026 is expected to be in the range of $300 million to $325 million, weighted to the second half.

Net revenues for the fiscal third quarter are projected to rise mid-single digits. The company sees adjusted EBITDA of $180-$190 million for the quarter.

Management expects pricing in high-single-digits in the second half and volumes down low- to mid-single-digits. BAS is positioned for a stronger second half, EA is expected to improve as the solar exit laps, while HHC is more exposed to consumer softness. The proposed AMS acquisition is excluded from fiscal 2026 guidance.

How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a upward trend in estimates review.

VGM ScoresAt this time, H. B. Fuller has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock has 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise H. B. Fuller has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Key Takeaways MAA is expected to report Q2 revenue growth, while core FFO per share is projected to decline year over year.MAA cited steady occupancy, strong renewals and improving lease trends entering Q2.MAA guided Q2 core FFO to $2.00-$2.12 per share as higher costs may partly offset operating stability. Mid-America Apartment Communities (MAA - Free Report) — commonly known as MAA — is a real estate investment trust (REIT) that focuses on owning, operating and acquiring apartment communities throughout the Southeast, Southwest and Mid-Atlantic regions of the United States. The company is slated to report second-quarter 2026 results on July 29, after market close.

In the last reported quarter, this Germantown, TN-based residential REIT reported core FFO per share of $2.13, delivering a surprise of 0.47%. Results reflected same-store effective blended lease rate growth year over year.

Over the trailing four quarters, MAA surpassed the Zacks Consensus Estimate on three occasions and missed on the other, the average beat being 0.23%. This is depicted in the chart below:

Let’s see how things have shaped up before this announcement.

US Apartment Market in Q2The U.S. multifamily market entered the second half of 2026 with a clearer recovery taking shape, as strong renter demand and a rapidly shrinking supply pipeline began translating into lower vacancy and improving rent growth.

According to a Cushman & Wakefield report, net absorption reached roughly 124,600 units, up from 83,500 units in the first quarter and 8% above the prior year, making it the fifth-strongest quarter in nearly 25 years. The supply picture also became more favorable. Approximately 88,000 units were delivered during the quarter, down 27% year over year. Around 475,000 units remained under construction at quarter-end, equal to just 3.5% of existing inventory.

Improving demand and slowing supply pushed the national vacancy rate down 35 basis points quarter over quarter to 8.9%, its first move below 9% since 2024. On a trailing four-quarter basis, absorption of approximately 362,000 units exceeded deliveries of about 358,000 units for the first time since early 2022, indicating vacancy is likely to have passed its cyclical peak. The recovery was particularly pronounced in previously overbuilt markets: Austin; Charleston, SC; Savannah, GA; Huntsville, AL; Salt Lake City, UT, and Colorado Springs recorded some of the largest quarterly vacancy declines.

Rent growth remains modest but is beginning to improve. National asking rents reached approximately $1,945 per month, up 1.5% year over year, compared with 1.1% growth in the first quarter. The Bay Area led the recovery, with San Francisco rents rising 13%, San Jose 7% and the East Bay 4.8%. Norfolk, VA; Toledo, OH; Reno, NV; and Boise, ID, also posted strong gains.

High-supply markets remained softer, with rents still declining in Austin and Sarasota, FL, although the pace of those declines moderated as excess supply was absorbed. Overall, the market appears to be shifting from stabilization into an occupancy-led recovery, with broader rent growth likely as the construction pipeline continues to shrink.

Factors to Consider Ahead of MAA’s Upcoming ResultsMAA’s second-quarter 2026 results should reflect continued operating stability, with renewals, occupancy and moderating supply pressure supporting performance. Management said renewal growth remained above 5% entering the quarter, while April physical occupancy held at 95.5% and 60-day exposure improved 20 basis points from a year earlier. The company expects blended lease growth to accelerate from the first quarter’s negative 0.3%, helped by steady renewals and a more normal seasonal improvement in new lease pricing through July.

New lease rates will likely remain the main swing factor. Management noted improving momentum in March and April and expects May and June to perform better than last year, supported by strong lead volume, positive absorption and fewer deliveries. Atlanta and Dallas are showing better pricing and occupancy trends, while Austin, Charlotte and Savannah, GA, remain pressured by elevated concessions and supply.

For the quarter, MAA guided core FFO to $2.00-$2.12 per share, with a midpoint of $2.06. Higher seasonal maintenance costs and increased interest expense are likely to have limited the upside, although property dispositions and disciplined expense control may have partly offset those pressures.

Projections for MAAThe Zacks Consensus Estimate for quarterly revenues is pegged at $557.28 million. This suggests a 1.34% rise from the year-ago quarter’s reported figure.

For the second quarter, we project an average physical occupancy of 95.6%. However, we expect same-store property net operating income to fall 1.3% year over year. Our estimate indicates a 16.5% increase in the company’s interest expenses.

Before the second-quarter earnings release, the company’s activities were not adequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has remained unchanged at $2.08 for more than two months. This also suggests a year-over-year decline of 3.26%.

Here Is What Our Quantitative Model Predicts for MAAOur proven model does not conclusively predict a surprise in terms of FFO per share for MAA this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

MAA currently carries a Zacks Rank of 3 and has an Earnings ESP of -0.20%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a LookHere are two stocks from the broader REIT sector — Extra Space Storage (EXR - Free Report) and Cousins Properties (CUZ - Free Report) — you may want to consider, as our model shows that these have the right combination of elements to report an FFO beat this quarter.

Extra Space Storage is slated to report quarterly numbers on July 28. EXR has an Earnings ESP of +0.39% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cousins is slated to report quarterly numbers on July 30. CUZ has an Earnings ESP of +0.45% and a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

Booz Allen Hamilton Holding Corporation (BAH) Q1 2027 Earnings Call July 24, 2026 8:00 AM EDT

Company Participants

Dustin Darensbourg - Director & Head of Investor Relations
Horacio Rozanski - CEO & Chair
Kristine Anderson - COO & President
Troy Lahr - Executive VP & CFO

Conference Call Participants

Jonathan Siegmann - Stifel, Nicolaus & Company, Incorporated, Research Division
Colin Canfield - Cantor Fitzgerald & Co., Research Division
Gavin Parsons - UBS Investment Bank, Research Division
Louie Dipalma - William Blair & Company L.L.C., Research Division
Scott Mikus - Melius Research LLC
Matthew Akers - BNP Paribas, Research Division
Seth Seifman - JPMorgan Chase & Co, Research Division
Tobey Sommer - Truist Securities, Inc., Research Division
Sheila Kahyaoglu - Jefferies LLC, Research Division
John Godyn - Citigroup Inc., Research Division

Presentation

Operator

Good morning. Thank you for standing by, and welcome to Booz Allen Hamilton's Earnings Call covering First Quarter Fiscal Year 2027 Results. [Operator Instructions] I'd now like to turn the call over to the Head of Investor Relations, Dustin Darensbourg. Please go ahead.

Dustin Darensbourg
Director & Head of Investor Relations

Good morning, and thank you for joining us for Booz Allen's First Quarter Fiscal Year 2027 Earnings Call. We hope you've had an opportunity to read the press release we issued earlier this morning. We have also provided presentation slides on our website and are now on Slide 2. With me today to talk about our business and financial results are Horacio Rozanski, our Chairman and Chief Executive Officer; Kristine Martin Anderson, President and Chief Operating Officer; and Troy Lahr, Executive Vice President and Chief Financial Officer.

As shown in the disclaimer on Slide 3, some of the items we will discuss this morning are forward-looking and may relate to future events and as such, involve known and unknown risks, uncertainties and other factors that may cause our actual results

Aggregate cash and cash equivalents and short-term investments were $690.7 million.

Company Raises Capital But Says More Funding Will Be NeededDuring the second quarter of 2026, the company raised $230.8 million in gross proceeds through its ATM facility. Subsequent to June 2026, the company raised an additional $68.4 million in gross proceeds through its ATM facility.

In its SEC quarterly filing, the cancer drug developer reported that it has an accumulated deficit of $2,699.3 million, and expects to continue to generate operating losses for the foreseeable future.

Cash and cash equivalents and short-term investments are not sufficient to fund the company’s planned operations for a period of at least one year.

Going Concern Warning Highlights Future Cash RequirementsSummit said it continues to evaluate options to finance operating cash needs for product candidates further.

The company said that if it is unable to obtain funding when required in the future, it could be required to delay or reduce research and development programs, product portfolio expansion, or future commercialization efforts.

These conditions raise substantial doubt about the ability to continue as a going concern.

Ridinilazole Sale Adds Potential PaymentsEarlier in July, Summit Therapeutics agreed to sell ridinilazole, an investigational Phase 3 precision antibiotic, to Toronto-based Biossil, Inc.

Summit will receive $500,000 upfront and up to $104.5 million in regulatory and commercial milestones, plus tiered royalties on net sales.

SMMT Price Action: Summit Therapeutics shares were down 6.78% at $13.96 at the time of publication on Friday, according to Benzinga Pro data.

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Key Takeaways Seagate expects Q4 revenue of about $3.45B and non-GAAP EPS of about $5.00 per share.STX is benefiting from AI, cloud and data center demand, with HAMR and Mozaic driving growth.Seagate sees strong momentum from pricing, margins and free cash flow despite competitive and cyclical risks. Seagate Technology Holdings plc (STX - Free Report) is scheduled to report fourth-quarter fiscal 2026 earnings on July 28, after the closing bell.

The Zacks Consensus Estimate for earnings is pegged at $5.10 per share, indicating a 96.9% year-over-year increase. The Zacks Consensus Estimate for revenues is $3.5 billion, suggesting a 43% uptick from the year-ago actual.

For the fiscal fourth quarter, STX expects revenues of $3.45 billion (+/- $100 million). At the midpoint, this indicates a 41% year-over-year improvement. Non-GAAP earnings are expected to be $5.00 per share (+/- 20 cents). 

STX’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 10.7%.

Image Source: Zacks Investment Research

What the Zacks Model Predicts for STXOur proven model predicts an earnings beat for Seagate 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. This is exactly the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Seagate has an Earnings ESP of +1.75% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Factors Shaping STX Upcoming Q4 EarningsSeagate’s fiscal fourth-quarter performance is likely to have been cushioned by the explosive growth of AI, cloud computing and enterprise data centers, all of which continue to fuel demand for HDDs. Hyperscalers and cloud providers increasingly rely on Seagate's advanced HDD solutions because they offer the lowest cost per terabyte for massive-scale storage. STX is capitalizing on this opportunity through its HAMR roadmap and areal density strategy, improving cost and power efficiency while targeting mid-20% exabyte growth.

Its 44TB Mozaic 4+ platform is expected to lead HAMR shipments by the end of 2026, while the 50TB Mozaic 5 remains on track for late-2027 qualification. As production scales, Seagate plans to expand HAMR beyond hyperscale customers into enterprise and edge markets, enhancing long-term efficiency and growth. Nearline drives remain Seagate's most profitable business. Enterprise customers continue prioritizing larger-capacity drives that reduce operating costs while maximizing storage density. Demand has consistently exceeded supply over recent quarters, allowing Seagate to maintain healthy pricing.

An encouraging trend over recent quarters has been Seagate's improving profitability. Non-GAAP gross margin hit a record 47%, increasing about 1,080 basis points year over year, driven by favorable product mix and ongoing pricing initiatives in the fiscal third quarter. If revenue again surpasses expectations in the fiscal fourth quarter, margins could surprise positively, leading to stronger earnings growth than revenue alone might suggest. For the fiscal fourth quarter, non-GAAP operating expenses are expected to be around $295 million. At the midpoint of revenue guidance, non-GAAP operating margin is projected to rise into the low 40% range.

Image Source: Zacks Investment Research

STX's optimistic fiscal fourth-quarter outlook highlights increasing business momentum and future opportunities. Management emphasized that the company is entering a “new era of structural growth” fueled by strong AI-driven demand, increased adoption of Mozaic products and disciplined execution focused on expanding margins, cash flow and long-term value. It generates robust free cash flow, which it uses to fund dividends, share buybacks, technology investments and strengthen its balance sheet. Its above-average dividend yield, combined with earnings growth, makes the stock attractive for both income and long-term capital appreciation.

Amid geopolitical tensions, including the Middle East conflict, Seagate does not expect any material impact on its business, supported by proactive supply chain and logistics management. Per management, AI-driven demand for large-scale storage remains strong, with rising exabyte demand, continued Mozaic product qualification and disciplined pricing supporting its growth outlook. Despite the favorable outlook, Seagate is not without risks. It faces risks from a potential slowdown in enterprise IT spending, which could delay storage upgrades despite healthy hyperscale demand. The HDD industry also remains cyclical, with periods of oversupply capable of pressuring pricing and margins.

Additionally, intense competition from Western Digital Corporation (WDC - Free Report) and other storage technology providers could have challenged Seagate's quarterly performance.

STX Stock vs. IndustrySTX stock has gained traction, climbing 505.3% in the past year, exceeding the Zacks Computer-Integrated Systems industry’s, the Zacks Computer & Technology sector and the S&P 500’s growth of 216.4%, 25.6% and 18%, respectively.

Image Source: Zacks Investment Research

The company has also surpassed its industry peers like Agilysys, Inc. (AGYS - Free Report) , which has crashed 18.7% in the past year. Seagate’s shares have, however, trailed past storage rivals Micron Technology (MU - Free Report) and WDC, which soared 790% and 711.2%, respectively.

STX Trades at a PremiumIn terms of forward price/earnings, STX’s shares are trading at 30.56X, higher than the industry’s 13.03X. If earnings continue expanding over the next several quarters, today's valuation could still remain justified.

Image Source: Zacks Investment Research

WDC, MU and AGYS are trading at multiples of 28.42X, 6.64X and 47.92X, respectively.

Is STX Stock a Portfolio Must-Have?Seagate appears well-positioned to deliver another strong quarterly performance. Robust AI-driven storage demand, expanding HAMR adoption, improving margins and disciplined capital allocation all support the possibility of a fiscal fourth-quarter earnings beat. While cyclical risks and enterprise spending fluctuations should not be overlooked, the company's improving competitive position and favorable industry trends suggest that Seagate can continue creating shareholder value over the coming years.

If it delivers another earnings beat while maintaining a strong outlook for fiscal 2027, the stock may remain an attractive long-term investment. For investors seeking diversified exposure to the AI infrastructure trend along with reliable cash flow and dividend income, Seagate deserves serious consideration as a core technology stock.

Apple Inc. stock climbed 3% on Friday, outperforming much of the technology sector even as semiconductor stocks came under pressure.

The gains came after Baird raised its price target on the iPhone maker while maintaining an Outperform rating ahead of the company's upcoming quarterly earnings report.

The broader technology sector was weaker during the session. The Nasdaq Composite fell 0.19%, while shares of Intel, Micron and Advanced Micro Devices declined between 1% and 5%.

Apple's relative strength comes as investors prepare for the company's fiscal third-quarter earnings report, scheduled for July 30, and assess several product and software initiatives expected over the coming months.

William Power, Senior Research Analyst at Baird, raised the price target on Apple to $330 from $310 on Thursday while reiterating its Outperform rating.

The brokerage expects Apple to deliver solid fiscal third-quarter results, supported by continued iPhone demand and stable growth in its services business.

While memory pricing remains a headwind, Baird expects recent price increases to help offset some of that pressure.

The brokerage acknowledged that Apple's valuation appears elevated compared with historical levels but believes several factors continue to support the stock.

Port in the storm (of software and mega-cap tech capex). We expect solid FQ3 results, driven by strong iPhone growth and steady services trends. Memory pricing remains a daunting headwind, though price increases should ease the pressure. Valuation looks rich relative to past trends, suggesting much may be priced in, but we expect the strong free cash flow, upcoming product cycle and early positive comments on Siri AI to support the stock. We also think Street estimates over the NTM are set up well, with potential for further upside.

According to Baird, Apple generated approximately $129 billion in free cash flow over the last twelve months, while an upcoming product cycle and encouraging early commentary surrounding Siri AI could provide additional support for shares.

The firm also believes Wall Street earnings estimates for the next twelve months leave room for further upside.

Apple is scheduled to report earnings on July 30, with options markets implying a potential 3.5% move in the stock following the results.

Beyond earnings, investors are closely watching Apple's upcoming hardware refresh.

The company is preparing to introduce its next-generation M6 processor across its Mac lineup beginning this fall and extending into next year.

The refresh is expected to include updated 14-inch MacBook Pro models and new iMac computers, marking the first refresh for the desktop line in two years.

Apple is also preparing to launch Apple Upgrade, a new device leasing program backed by Klarna. The service is scheduled to become available in the United States on July 28.

Separately, Evercore ISI reiterated its Outperform rating and maintained a $365 price target following news of the Apple Upgrade program.

The investment firm also maintained its bullish stance after reports that Apple is engaged in settlement discussions with the US Department of Justice over an antitrust lawsuit filed in March 2024.

Apple is also expanding its presence in the automotive software market.

The company announced that Ford will become the first automaker to adopt its new MapKit for Automotive software development kit.

The technology will be integrated into dashboards across Ford's forthcoming electric vehicle platform and will also provide road data for the automaker's BlueCruise hands-free driving system.

The announcement marks a deeper expansion into vehicle software following Apple's decision two years ago to end its own electric vehicle project.

Unlike CarPlay, which primarily provides infotainment services, the new automotive software integrates Apple's mapping technology more directly into vehicle systems.

With earnings approaching, new hardware launches on the horizon and continued expansion into automotive software, investors will be closely watching whether Apple can sustain its recent outperformance amid broader volatility across the technology sector.

Key Takeaways Alphabet leads search with 91.27% share as AI Overviews and AI Mode deepen user engagement.Google Search & Other revenues rose 17% to $63.3B, helped by retail, finance and better query monetization.AI Mode connects Instacart, Canva and YouTube Music, letting users complete tasks without leaving Search. Alphabet’s (GOOGL - Free Report) Search-related endeavors have received a massive push through AI integrations. The company is leading the search domain with 91.27% market share, followed by Microsoft’s (MSFT - Free Report) Bing, with 4.68% share, Yahoo!’s 1.28%, Yandex’s 0.79%, DuckDuckGo’s 0.67% and Baidu’s (BIDU - Free Report) 0.46%, per the latest data from StatCounter.

Alphabet’s dominance is being reinforced by rapid AI innovation rather than disrupted by it. On the second-quarter 2026 earnings call, the company highlighted that AI Overviews and AI Mode have been integrated into a single seamless Search experience, helping drive higher user engagement and incremental search queries. AI Mode has already surpassed one billion monthly active users, while Google continues to send billions of clicks to websites every week through its AI-powered search features, addressing concerns that AI could reduce web traffic.

Search monetization also remains strong. Google Search & Other revenues climbed 17% year over year to $63.3 billion, driven primarily by retail and finance advertisers. Alphabet noted that Gemini-powered improvements in query understanding allow Google to better monetize longer, more complex searches by delivering more relevant advertisements. AI-powered advertising products such as AI Max are already being widely adopted, with advertisers using these tools seeing higher conversions at similar returns on ad spend.

Alphabet is also expanding Search beyond traditional web queries into an AI-powered productivity platform. The company recently introduced integrations that allow users to connect services such as Instacart, Canva and YouTube Music directly within AI Mode, enabling actions like creating shopping carts, generating design templates and building playlists without leaving Search. These capabilities deepen user engagement while making Google’s ecosystem more valuable and difficult for competitors to replicate.

GOOGL Faces Tough Competition in the Search DomainAlphabet faces competition from Microsoft and Baidu in the Search domain.

Microsoft is strengthening its search ecosystem through Bing and Edge by embedding advanced AI capabilities across its consumer products. Microsoft is also integrating proprietary AI models into Bing, improving image generation, speech recognition and search experiences while benefiting from broader investments in Copilot, Azure AI and its multi-model strategy. These enhancements are designed to increase user engagement, improve search relevance and capture a larger share of digital advertising, creating a stronger competitive challenge for Google in AI-powered search.

Baidu is also accelerating its AI-first search strategy, particularly in China. The company has highlighted continued improvements in AI Search through enhanced planning, content generation and content-quality evaluation, enabling more intelligent and higher-quality search results while reducing low-quality content. Baidu plans to further integrate AI Search with ERNIE Assistant to improve information discovery, content understanding and task completion. The company has also reiterated that AI Search remains one of its highest-priority applications and will continue to receive investments to strengthen search accuracy and user experience.

GOOGL’s Share Price Performance, Valuation & EstimatesAlphabet shares have returned 1.5% year to date (YTD), outperforming the broader Zacks Computer and Technology sector’s return of 10.8%.

GOOGL Stock’s Price Performance
Image Source: Zacks Investment Research

GOOGL stock is trading at a premium, with a forward 12-month price/sales of 8.07X compared with the broader sector’s 6.46X. Alphabet has a Value Score of D.

GOOGL Valuation
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for 2026 earnings is pegged at $14.34 per share, up 0.3% over the past 30 days, suggesting 32.65% growth from 2025’s reported figure.
 

Alphabet currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Nvidia, Microsoft, Meta, Palantir and more than 20 other companies released a letter on Friday urging policymakers to avoid "premature restrictions" on open-weight artificial intelligence models that would "stifle competition or drive innovation overseas."

Open-weight AI models are available for users to download, modify and run on their own infrastructure, and they have been the subject of fierce debate within the tech sector in recent weeks.

Chinese open-weight models are gaining steam against leading offerings from American companies like OpenAI and Anthropic, which primarily develop proprietary, closed models. Officials and executives have been weighing whether or not to restrict access to Chinese models in the U.S.

Moonshot AI, a Chinese startup, amplified concerns earlier this month after releasing a model called Kimi K3 that outperforms cutting-edge American offerings across some industry benchmarks. U.S. Treasury Secretary Scott Bessent told CNBC on Tuesday that the Trump administration would look into whether Chinese companies were stealing American intellectual property, and stated that the government has "the ability to sanction them because of this theft."

But in the letter on Friday, the group of U.S. tech companies cautioned against any rash actions. They wrote that open-weight models strengthen competition and ensure that the benefits of the technology are "broadly shared rather than concentrated in a few hands."

"Relying solely on closed models is not inherently safe: they can be breached, misused, or fail in ways that outsiders cannot detect," the letter said. "And concentrating advanced AI capabilities behind a small number of closed models compounds that risk."

Nvidia CEO Jensen Huang and Microsoft CEO Satya Nadella both shared the letter on their personal social media accounts.

Elon Musk, who runs an AI business under his rocket company SpaceX, also applified the letter on social media, writing that it has his "full support" in a post on X. SpaceX did not officially sign the letter.

Read more CNBC tech newsMoonshot AI accessed Nvidia's chips despite Chinese export ban, White House official saysAlphabet and Tesla test Wall Street's patience as AI spending overshadows growthAlphabet earnings takeaways: Q2 revenue beats, GOOGL stock sinks on 2026 capex hikeTesla misses on earnings, as free cash flow turns negative and margins slideOpenAI and Anthropic did not sign the letter. Both companies, which are each valued at nearly $1 trillion, are gearing up for potentially massive IPOs that could land as soon as this year. Anthropic confidentially filed its prospectus with the Securities and Exchange Commission in June, and OpenAI followed suit days later.

Greg Brockman, OpenAI's president, said Thursday that the company believes in broad access, and that he has not been involved in any conversations with the Trump administration about potentially banning Chinese open-weight models in the U.S.

"I think that, that fundamentally, AI and AI usage is something that is actually very important to democratize," Brockman told reporters during a briefing in New York City. "And so, for me, at a sort of deep level, I think that having more models, more usage, that is a good thing."

White House advisor Michael Kratsios on Wednesday said that Moonshot AI developed its Kimi K3 model by distilling Anthropic's technology. Distillation is a term for an AI training method where a smaller, less capable model is built using outputs from an existing, stronger model.

Kratsios wrote in a post on X that legitimate AI distillation plays a vital role in the open innovation ecosystem, but warned that "large-scale, covert industrial distillation aimed at stealing proprietary U.S. technology" is "unacceptable."

In the letter on Friday, the U.S. tech companies said that concerns about unlawful distillation should be addressed through "targeted legal and commercial frameworks" instead of with "sweeping restrictions on techniques that play an important role in AI innovation."

"Our AI leadership will be judged not by one frontier AI model, but by whether the United States builds a strong, open ecosystem that diffuses into every sector," the letter said. "This is essential for creating opportunities for innovation and prosperity across the country."

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Speaking at the earnings call after reporting second-quarter results, CEO Robert Isom commented about inflation-adjusted airfares.

“Real airfares are still lower than in 2019,” he said, even as demand continues to strengthen across domestic and international markets. That apparent contradiction helps explain one of the biggest shifts taking place across the airline industry: airlines are increasingly earning more from who is flying rather than simply how much everyone pays for a ticket.

Premium Travelers are Helping American FlyAmerican’s earnings highlighted just how much its business has shifted toward premium travelers.

“So it’s nearly half of our ticketed revenue on roughly 30% of our seats. And the thing we’re really excited about is nearly 60% of our revenue comes from households making $150,000 or more,” Nathaniel Pieper, Chief Commercial Officer chimed in.

The customer mix tells a similar story. According to the company, nearly 60% of ticket revenue now comes from households earning more than $150,000 annually, a customer base management believes is likely to remain resilient even during periods of economic uncertainty.

To capitalize on that trend, American is expanding premium seating faster than economy seating through new aircraft deliveries and cabin retrofit programs while investing in lounges, upgraded onboard products and, beginning in 2027, Starlink high-speed Wi-Fi.

Strategy at WorkThe strategy appears to be working. Premium unit revenue increased more than 13% year over year, outpacing growth in the main cabin, while managed corporate revenue climbed 26%. The airline also reported a five-percentage-point increase in customers upgrading from Basic Economy to Main Cabin after making changes to its fare offerings.

The result is a business model that’s becoming less dependent on raising economy ticket prices. Instead, airlines are increasingly generating incremental revenue from premium cabins, loyalty programs, co-branded credit cards, paid upgrades and higher-spending travelers.

It’s also helping mitigate the brunt of rising fuel costs. “In the second quarter, fuel expense increased by over $2.2 billion, or 83% year over year,” CFO Devon May noted. Isom confirmed how well American is dealing with it. “The second quarter helped offset nearly 50% of the $2.2 billion year-over-year increase in fuel expense.”

This, coupled with the company being able to hold “non-fuel year-over-year unit cost growth to under 3%” have been helping American fly through fuel inflation.

For investors, American’s latest quarter offers a reminder that the industry’s earnings story isn’t simply about higher fares. It’s increasingly about extracting more value from each traveler—even while inflation-adjusted airfares remain below where they were before the pandemic.

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It would be easy to not notice. The company isn't exactly disrupting the pharmaceutical business, after all. In fact, most investors would struggle to name a single drug the company makes.

Just dig deeper. Last quarter's results may be a glimpse of the growth that Johnson & Johnson (JNJ +1.56%) quietly has in store for patient investors.

Image source: Getty Images.

Cancer drugs to lead growth You probably know the company as the name behind Tylenol, Band-Aid, and talcum powder. Johnson & Johnson actually spun off these consumer-facing brands into a stand-alone business called Kenvue back in 2023, leaving behind a prescription drug and medical device operation that some investors never knew existed. As was noted, most investors might struggle to name even just one of its drugs.

Nevertheless, it's there, and it's growing. Last quarter's operational revenue growth of 5.7% extends Q1's and last year's pace, led by the company's oncology arm, and particularly its cancer-fighting Darzalex, which saw global sales growth of nearly 19% in Q2.

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And that's important. Although its oncology business has been an important profit center for some time, Johnson & Johnson aims to sell at least $50 billion in cancer drugs per year by 2030, making it the biggest name in the business.

For perspective on that figure and its growth, the company is on pace to drive record-breaking revenue of just over $100 billion this year, with roughly $30 billion of that being cancer-related.

The thing is, with its oncology business now persistently growing at a rate in the high teens, Johnson & Johnson can reach this goal, more than offsetting the rapid deterioration of Stelara's sales now that the anti-inflammation drug's patents have expired.

Still a dividend holding, but one being rebuilt to extend an impressive track record This performance still won't qualify J&J as the sort of growth name that most investors envision when looking for a new growth investment. It's still predominantly a dividend-paying value stock, although a very good one. Indeed, with a track record of 64 consecutive years' worth of per-share dividend increases (adjusted for the Kenvue spinoff), it easily qualifies as a Dividend King.

This oncology-driven revenue growth, however, sets the stage for continued dividend increases.

And the underlying opportunity is certainly solid. An outlook from Precedence Research suggests the worldwide cancer treatment market is poised to grow at an average annualized rate of 11.3% through 2035, from $280 billion this year to over $730 billion per year at the end of this time frame. Johnson & Johnson just needs to make sure it continues capturing its fair share of this growth.

For most of the AI boom, investors have sorted semiconductor companies into neat categories.

NVIDIA Corp. (NASDAQ:NVDA) dominated AI accelerators.

Qualcomm Inc. (NASDAQ:QCOM) stayed trapped in the “smartphone chipmaker” bucket.

Citrini Research argues that classification may soon become outdated. The business underneath Qualcomm is turning into something else.

• Qualcomm stock is showing weakness. Why is QCOM stock trading lower?

Qualcomm Is Trying To Attack AI’s “Memory Wall”In the latest edition of its Citrini Semis Substack, Citrini Research highlighted that Qualcomm’s transformation extends far beyond smartphones.

The firm said the company is making a credible push into AI infrastructure — a market many investors still aren’t pricing in.

Instead, it’s attempting to solve one of artificial intelligence’s biggest bottlenecks: the exploding cost of moving data between memory and processors.

The investment thesis doesn’t revolve around another AI accelerator.

It revolves around architecture.

Citrini argues that today’s AI infrastructure faces a growing “memory wall,” where processors have become dramatically faster while memory bandwidth struggles to keep up.

High-bandwidth memory has become the industry’s preferred solution, but soaring costs are creating incentives to pursue alternative architectures.

“HBM isn’t an immutable requirement, it’s just the industry’s current answer to the cost of moving enormous amounts of data back and forth between memory and the accelerator,” Citrini wrote.

The firm believes Qualcomm’s newly introduced High Bandwidth Compute (HBC) architecture could become one of those alternatives.

Instead of relying on traditional HBM packaging, Qualcomm places compute directly beneath LPDDR memory, reducing data movement while avoiding expensive advanced packaging technologies.

According to Qualcomm executive Tony Pialis, the architecture delivers significantly higher bandwidth efficiency while reducing power consumption.

If successful, Qualcomm wouldn’t simply be selling another AI chip.

It would be attacking one of AI infrastructure’s largest cost centers.

Why Investors Should Focus On 2029, Not Next QuarterSkeptics argue that Qualcomm’s data center business remains years away from contributing meaningful revenue.

Citrini acknowledges that point but says investors are focusing on the wrong timeline.

Citrini acknowledges that production timelines remain early, with AI200 systems arriving this year and larger hyperscaler deployments expected later this decade.

Semiconductor stocks are routinely valued years ahead of realized earnings, and the firm said 2028 and 2029 are “precisely the year we are putting multiples on this.”

Qualcomm does not need billions in AI revenue today. It needs investors to believe those revenues are becoming credible.

The pieces have been bought rather than built.

Qualcomm closed a $2.3 billion acquisition of Alphawave in December and agreed in June to buy AI software firm Modular for roughly $3.9 billion.

Where Does Wall Street Stand?According to Benzinga Analyst Ratings, the consensus on Qualcomm is Neutral, with an average price target of $207.93. That implies roughly 22% upside from the July 22 close of $171.11, with targets running from $100 to a Street-high $300.

Qualcomm reports fiscal third-quarter results on July 29.

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American Express AXP stock is in focus this morning after the credit card company reported its fiscal Q2 earnings that told a familiar story of premium strength.

AMEX came in ahead of Street estimates with an 11% year-on-year increase in earnings per share (EPS) to $4.53, while the firm's overall revenue went up 10% in the recent quarter to $19.6 billion.

However, underneath the glittering headline figures lies an increasingly costly structural evolution, one that’s weighing rather significantly on American Express stock on Friday morning.

AMEX added 3 million new proprietary cards during Q2 – with over three-quarters signing up for high-margin, fee-based accounts.

A massive slice of those additions continues to be Gen Z and Millennial consumers.

Yet, as younger cardholders flock to the brand, their enthusiastic adoption of “premium benefits” is turning into a double-edged sword for the company's operational margins.

Note that American Express shares are currently down over 13% versus the start of this year (2026)

American Express’s aggressive push to court younger demographics through refreshed Platinum and Gold card offerings has yielded millions of tech-savvy, lifestyle-focused customers.

However, Gen Z and Millennial cardholders operate differently than legacy members; they actively maximize every credit, travel pass, and dining stipend attached to their accounts.

This drove total quarterly operating expenses up 12% year-over-year.

Customer engagement and variable reward costs surged as airport lounge visits, hotel credits, and lifestyle perks were claimed at record volumes.

The average card member spent $6,759 in the second quarter – up from $6,393 last year – showing high engagement.

However, fulfilling those lifestyle promises requires huge capital. AMEX has successfully hooked a new generation, but funding their premium lifestyle is proving significantly more expensive than anticipated.

Despite beating quarterly profit expectations, AMEX shares dropped more than 5% following the announcement as investors focused heavily on the 12% expense hike.

The read for investors was simple: in a market where financial firms are expected to tighten belts, American Express is actually “accelerating” expenditure to defend its turf against competitors like JPMorgan Chase and Capital One.

Sure, the net write-offs remained comfortably low in the second quarter at 2%, proving credit health remains pristine – but narrowing margins due to a 50% increase in “Card Member Services” costs is becoming harder to ignore.

Market participants are concerned that if younger consumers continue rinsing the perk allowances while broader macroeconomic spending cools, expense growth could persistently beat transaction volume gains.

The ultimate fallout from this costly acquisition strategy was felt in AMEX’s forward guidance.

Strong first-half momentum prompted management to raise its full-year revenue growth outlook to about 10%.

Yet, notably, executives refused to raise the profit target, leaving EPS outlook frozen at $17.30 to $17.90.

That said, Wall Street hasn’t thrown in the towel on AMEX stock, though. Heading into the earnings print, the consensus rating on American Express stood at Overweight with a bullish $378 average price target.

Key Takeaways Dow's Q2 EPS beat estimates, with revenues of $12.09B and self-help benefits above $300M.Dow's Packaging & Specialty Plastics sales rose 27% as higher polyethylene prices boosted results.Dow expects Q3 EBITDA of about $1.7B while self-help actions add roughly $130M in sequential benefits. Dow Inc. (DOW - Free Report) used its second-quarter earnings call to emphasize cost actions, portfolio changes and disciplined execution as management focuses on improving earnings durability. The company highlighted stronger pricing, margin recovery and cash generation while acknowledging continued market volatility.

Management also provided a cautious third-quarter outlook, pointing to polyethylene margin pressure and seasonal factors while expecting additional benefits from restructuring and productivity initiatives.

DOW Advances Cost and Portfolio ActionsCEO Karen Carter said that Dow is focused on three priorities: targeted growth, improving portfolio competitiveness and maintaining balanced capital allocation. Carter emphasized using the company’s global assets and customer relationships to strengthen long-term competitiveness.

DOW reported second-quarter operating EPS of $1.44, beating the Zacks Consensus Estimate of $1.25. Revenues of $12.09 billion slightly surpassed the Zacks Consensus Estimate of $12.04 billion.

The company said self-help efforts generated more than $300 million of benefits during the quarter. Management increased expected in-year benefits from these actions to more than $1.3 billion.

Dow Sees Strength in Key MarketsDow’s second-quarter sales increased 20% year over year, supported by higher prices across regions. Operating EBITDA was $2.3 billion, while operating EBIT improved significantly from the prior-year period.

The company’s Packaging & Specialty Plastics segment was a major contributor, with sales rising 27% year over year to $6.4 billion. Dow attributed this improvement to higher polyethylene prices and stronger integrated margins.

Dow noted that data center demand remains a growth area, particularly for thermal management solutions and Industrial Solutions products. Carter highlighted opportunities in electronics, mobility and specialty applications.

DOW Details Third-Quarter OutlookCFO Jeffrey Tate said that Dow expects third-quarter EBITDA of approximately $1.7 billion. The outlook indicates anticipated polyethylene margin compression following June price changes and typical seasonal patterns after strong second-quarter demand.

Management expects about $130 million of sequential benefits from self-help actions during the third quarter. These gains are expected to offset planned maintenance and the absence of certain second-quarter benefits.

Dow also highlighted risks from geopolitical tensions, logistics constraints and uneven regional demand. The company said market conditions remain volatile, particularly due to ongoing disruptions affecting energy and feedstock markets.

Dow Builds Specialty Growth PlatformsDow said it is reshaping the silicones business by reducing higher-cost upstream capacity and expanding downstream opportunities. The company expects the Barry, U.K. siloxanes shutdown to provide a $60 million EBITDA uplift in the second half of 2026.

Management said specialty silicones investments are focused on faster-growing markets, including electric vehicles, consumer electronics, healthcare and data centers. Carter noted that these downstream markets are expected to deliver stronger returns.

The company also discussed its Dow Coolant Care Network, which supports data center thermal management needs. Management views the offering as a way to expand both revenue opportunities and service capabilities.

DOW Addresses Analyst ConcernsA Morgan Stanley analyst asked about the Alberta project and whether Dow could bring in a partner. Carter said that the company remains focused on completing the project while staying disciplined on returns.

A JPMorgan analyst questioned the timing of cost savings and capital allocation priorities. Tate said that debt reduction remains the first priority, with share repurchases not expected during 2026.

Analysts also questioned polyethylene assumptions. Carter said that improving oil prices, declining inventories and stronger order activity could provide upside if current market conditions continue.

Dow Focuses on Financial FlexibilityDow confirmed that it is prioritizing balance sheet strength, maintaining approximately $14 billion in liquidity and directing excess cash toward deleveraging. Management noted that there are no substantive debt maturities until 2029.

The company expects working capital actions to release more than $500 million in the second half of 2026. Management also confirmed progress from restructuring efforts, including implemented role reductions and site transformation initiatives.

Carter said that Dow’s approach remains centered on improving productivity, strengthening its asset base and focusing investment on attractive markets. The company continues to position its actions around longer-term competitiveness.

Zacks Signals Point to a Mixed SetupDOW carries a Zacks Rank #3 (Hold), indicating that the stock’s earnings estimate revision trends are currently consistent with a neutral outlook. The Zacks Rank can change as analysts update earnings expectations following new company information. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has a Value Score of B and VGM Score of B, while its Growth Score is C and Momentum Score is F. Zacks Style Scores are designed to complement the Zacks Rank by evaluating value, growth and momentum characteristics, with stronger scores indicating more favorable attributes.

Wall Street expects a year-over-year increase in earnings on higher revenues when LyondellBasell (LYB - Free Report) reports results for the quarter ended June 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.

The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 31. On the other hand, if they miss, the stock may move lower.

While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.

Zacks Consensus EstimateThis oil refiner and chemical company is expected to post quarterly earnings of $3.56 per share in its upcoming report, which represents a year-over-year change of +474.2%.

Revenues are expected to be $8.9 billion, up 16.2% from the year-ago quarter.

Estimate Revisions TrendThe consensus EPS estimate for the quarter has been revised 21.38% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.

Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts.

Price, Consensus and EPS Surprise

Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core.

The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.

Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.

A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.

Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).

How Have the Numbers Shaped Up for LyondellBasell?For LyondellBasell, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -5.07%.

On the other hand, the stock currently carries a Zacks Rank of #3.

So, this combination makes it difficult to conclusively predict that LyondellBasell will beat the consensus EPS estimate.

Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.

For the last reported quarter, it was expected that LyondellBasell would post earnings of $0.31 per share when it actually produced earnings of $0.49, delivering a surprise of +58.06%.

Over the last four quarters, the company has beaten consensus EPS estimates two times.

Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.

That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.

LyondellBasell doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.

An Industry Player's Expected ResultsAmong the stocks in the Zacks Chemical - Diversified industry, Eastman Chemical (EMN - Free Report) , is soon expected to post earnings of $1.8 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +12.5%. This quarter's revenue is expected to be $2.37 billion, up 3.5% from the year-ago quarter.

Over the last 30 days, the consensus EPS estimate for Eastman Chemical has been revised 4.9% down to the current level. Nevertheless, the company now has an Earnings ESP of +0.93%, reflecting a higher Most Accurate Estimate.

When combined with a Zacks Rank of #4 (Sell), this Earnings ESP makes it difficult to conclusively predict that Eastman Chemical will beat the consensus EPS estimate. Over the last four quarters, the company surpassed EPS estimates just once.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Key Takeaways BlackBerry raised fiscal 2027 revenue guidance after first-quarter revenues climbed 26% to $152.9 million.QNX revenues rose 26% to $72 million, supported by the strong development licenses performance.Secure Communications revenues grew 24% to $74 million on government demand, retention and recurring sales. BlackBerry (BB - Free Report) kicked off fiscal 2027 on a strong note, delivering better-than-expected first-quarter results and raising its fiscal year outlook. The performance was anchored by strong QNX and Secure Communications businesses, but the key question remains whether this momentum can sustain.

Quarterly revenues came in at $152.9 million, marking a 26% year-over-year increase. Profitability was equally impressive, with adjusted EBITDA more than doubling to $36 million.

QNX remained the key catalyst, with revenues climbing 26% year over year to $72 million. The segment benefited from broad-based strength, particularly in development licenses, which hit their highest level in eight quarters. This metric serves as an early indicator of future royalty streams, reflecting customer investments in new software platforms that will take years to reach production.

Beyond automotive, General Embedded Markets and Physical AI are emerging as a fast-growing opportunity, expanding QNX’s reach into industrial automation, robotics and medical devices.

Additionally, the company continues to advance Alloy Kore, a platform expected to significantly increase software content per vehicle, boost average selling price by multiples and driving backlog. While still early, management remains positive about securing a design win within the current fiscal year.

Secure Communications also delivered a standout quarter, with revenues increasing 24% year over year to $74 million. The segment is witnessing improved performance anchored by government demand, recurring revenues and customer retention. Rising demand for digital sovereignty and cybersecurity modernization by governments across the globe is creating a powerful tailwind.

Encouraged by the strong start, BlackBerry now expects total revenues between $594 million and $621 million compared with $584-$611 million projected earlier.

The strong start to fiscal 2027 and subsequent outlook revision reinforces that BlackBerry’s turnaround strategy is gaining traction. However, the path is not without challenges. Secure Communications remains exposed to deal-timing variability and this could impact performance.

In addition, some of BlackBerry’s most exciting opportunities, such as physical AI, robotics and the Alloy Kore platform, remain in the early stages, introducing execution risk. Heavy reliance on the automotive industry is a concern. The QNX platform remains heavily exposed to vehicle production cycles and OEM spending, which, in turn, are highly dependent on macro conditions. BlackBerry faces increasing competitive pressures in both QNX and cybersecurity businesses.

Let’s Take a Look at BB’s PeersWithin the cybersecurity space, BlackBerry competes with several giants, including CrowdStrike (CRWD - Free Report) . While BlackBerry’s focus remains on encrypted communications and sovereign-grade infrastructure, CRWD is one of the leading pureplay companies. CRWD entered fiscal 2027 with strong momentum, with the fiscal first quarter revenues rising 26% year over year to $1.39 billion and ARR reaching $5.51 billion (up 24%), alongside record net new ARR of $256 million (up 32%). Management emphasized that as enterprises rapidly adopt AI, cybersecurity has become a critical component, creating a massive demand pipeline.  

CrowdStrike is seeing strong adoption across cloud, identity and next-gen SIEM, with these newer categories exceeding $2 billion in ARR. The company expects fiscal second quarter revenues to be between $1.436 billion and $1.442 billion. CRWD raised its fiscal 2027 net new ARR growth guidance by 520 basis points at the midpoint

Aptiv PLC (APTV - Free Report) Intelligent Systems segment is seeing increased activity around next-generation ADAS, user experience and vehicle architecture solutions. However, in the near-term Aptiv is navigating a volatile macro backdrop amid OEM and auto industry disruptions and inflationary pressure. For the second quarter of 2026, Aptiv expects revenues (excluding its EDS segment, which spun-off into a new publicly traded company, Versigent) to be between $3.2 billion and $3.4 billion.  

APTV has only about 25% of its business outside automotive. The company is seeking to increase penetration in markets such as commercial aerospace and telecom and remains focused on accelerating product development and go-to-market activities.

BB Price Performance, Valuation & EstimatesShares of BlackBerry have lost 16.5% in the past month against the Internet-Software industry’s growth of 11%.

Image Source: Zacks Investment Research

Regarding the price/book ratio, BB is trading at 6.74, higher than the industry’s multiple of 4.65.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for BB earnings for fiscal 2027 has been revised downward over the past 60 days.

Image Source: Zacks Investment Research

BlackBerry currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shareholders in biotechnology, life sciences, and diagnostics solutions company Danaher (DHR -0.58%) have had an interesting week. Their stock crashed early in the week on the release of its second-quarter earnings, only to recover somewhat through the week and start Friday morning having declined 12.1% on the week.

Danaher mixed earnings report Investors can be forgiven for wondering why the stock declined after the company's second-quarter earnings beat estimates and management raised its full-year earnings per share (EPS) guidance to $8.45-$8.60 from a $8.35-$8.55 previously.

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The answer lies in the fact that $0.07 to $0.08 of the increase in guidance comes from the earlier-than-expected acquisition of the medical technology company Masimo. In addition, Danaher reduced its full-year core sales growth expectations in its highest margin business, biotechnology.

Full-Year Core Sales Growth Guidance

At April

At July

Second Quarter Adjusted Operating Profit Margin

Biotechnology

6%

Up mid-single-digit

41%

Life Sciences

Up slightly

3%-4%

21%

Diagnostics

Up low-single-digits

Up slightly

24.5%

Total Company

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Up mid-single-digit

27.1%

Data source: Company presentations. Table by the author.

What the guidance change means It's not a huge change in overall company sales growth expectations. Still, the reduction in growth expectations for the biotechnology could impact full-year profit margin expectations.

The disappointing news in biotechnology came down to consumables sales coming in "below our expectations as a few large shipments for programs at our commercial customers moved out of the quarter. To give you some additional color, this was a shift in shipment timing at a few large commercial drug manufacturers for molecules that were specced into" according to CEO Rainer Blair on the earnings call.

Image source: Getty Images.

Analysts were quick to ask why the shipments wouldn't simply move to the third and fourth quarters, with Blair outlining that a few chromatography resin shipments had moved out of the year.

There's a good reason to believe the shipments will proceed, as shipments can be lumpy in biotechnology. The sell-off appears to be a significant overreaction to an otherwise positive report. If you like the stock long-term, then it could be a good time to pick some up.

Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Danaher. The Motley Fool has a disclosure policy.

Lockheed Martin Q2 Earnings Call RevelationSpeaking on the company’s second-quarter earnings call, CEO Jim Taiclet described what may be one of the biggest strategic shifts underway at the world’s largest defense contractor. Rather than waiting for formal Pentagon requests, Lockheed is increasingly developing weapons and expanding manufacturing capacity before contracts are awarded, betting it can anticipate the military’s future needs.

“We’re not waiting for orders or contracts to close evident mission gaps,” Taiclet said, adding that the company is building technology roadmaps designed to predict customer requirements before they make their way through the government’s procurement process.

The approach is already showing results.

Concept to Testing in 45 DaysTaiclet highlighted Lockheed’s new Sanctum counter-drone system, which progressed from concept to successful live-fire testing in less than 45 days by combining existing technologies—including radar, launchers and missiles—rather than designing an entirely new platform from scratch.

The company is taking the same proactive approach to manufacturing.

Lockheed has been expanding missile production capacity ahead of contracted demand, investing in new factories, automation, robotics and artificial intelligence while increasing international co-production capabilities. Those investments helped position the company to secure a seven-year, $35 billion contract to quadruple production of THAAD missile interceptors, along with several other major awards announced during the quarter.

The mindset extends beyond factories.

Discussing internally funded drone defense programs, Taiclet recalled telling engineers, “Build 1,000 of these,” even before customer orders materialized. The goal, he said, is to demonstrate operational capability first and secure contracts afterward, rather than waiting for government procurement cycles to begin.

For investors, the strategy signals Lockheed’s effort to shape future defense demand through earlier investment, rapid prototyping and internally funded innovation.

As geopolitical tensions continue driving military spending higher, Lockheed appears increasingly willing to spend its own capital to ensure it already has the next generation of weapons ready when governments decide they need them.

Photo courtesy: Shutterstock

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Key Takeaways General Dynamics entered Q2 with a record backlog supporting revenue visibility across its businesses.GD's Marine Systems may benefit from improving productivity and supplier performance on submarine programs.Gulfstream is expected to post solid aircraft deliveries after a record first-quarter delivery performance. General Dynamics (GD - Free Report) is scheduled to release second-quarter 2026 results on July 29, before market open. The company delivered an earnings surprise of 11.4% in the last reported quarter.

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Key Factors Likely to Influence GD’s Q2 ResultsGeneral Dynamics heads into second-quarter earnings season with a record backlog and healthy book-to-bill ratios across its business segments, supporting strong revenue visibility despite macroeconomic uncertainty. The company's defense operations are expected to have remained the primary growth driver, benefiting from sustained demand for submarines, combat vehicles, munitions and mission systems amid rising global defense spending.

Marine Systems is likely to have been one of the biggest catalysts for the second quarter. Management highlighted improving labor productivity across its shipyards, stronger material availability and steadily improving supplier performance, all of which might have supported higher throughput on the Columbia- and Virginia-class submarine programs. The company continues to invest aggressively in expanding shipyard capacity to meet growing U.S. naval demand. If these operational improvements continued through the second quarter, Marine Systems could have been a major contributor to revenue and margin expansion.

Gulfstream entered the second quarter after recording the strongest first-quarter delivery performance in its history, while management emphasized durable manufacturing improvements across the G700 and G800 programs. Management expects second-quarter aircraft deliveries to remain similar to the first quarter before rising further in the second half of the year, indicating another solid quarter for the segment.

Although management said supply-chain conditions have improved, critical components sourced from single suppliers continue to constrain production. Any renewed disruptions could slow the pace of submarine construction and limit further throughput improvements despite robust customer demand.

GD’s Q2 ExpectationsThe Zacks Consensus Estimate for earnings is pegged at $3.95 per share, indicating a year-over-year increase of 5.6%.

The Zacks Consensus Estimate for revenues is pinned at $13.49 billion, implying a year-over-year improvement of 3.4%.

The Zacks Consensus Estimate for total Gulfstream aircraft deliveries is pinned at 42, compared with the company’s registered figure of 38 in the year-ago quarter.

What the Zacks Model UnveilsOur proven model predicts an earnings beat for General Dynamics 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, which is the case here, as you will see below.
 

Other Stocks to ConsiderInvestors may also consider the following players from the same sector as these, too, have the right combination of elements to post an earnings beat this reporting cycle.

Hexcel (HXL - Free Report) is likely to come up with an earnings beat when it announces second-quarter results on July 29, before market open. It has an Earnings ESP of +6.13% and a Zacks Rank #3 at present.

The consensus estimate for HXL’s second-quarter sales suggests an improvement of 6.5% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 12.6% for the trailing four quarters.

L3Harris Technologies (LHX - Free Report) is expected to come up with an earnings beat when it reports second-quarter results on July 29, after market close. It has an Earnings ESP of +2.09% and a Zacks Rank #3 at present.

The consensus estimate for LHX’s second-quarter sales implies an improvement of 6.8% from the year-ago quarter’s level. The Zacks Consensus Estimate for earnings is pinned at $2.80 per share, indicating year-over-year growth of 0.7%.

Curtiss-Wright (CW - Free Report) is likely to come up with an earnings beat when it announces second-quarter results on Aug. 5, after market close. It has an Earnings ESP of +0.36% and a Zacks Rank #3 at present.

The consensus estimate for CW’s second-quarter sales suggests an improvement of 6.2% from the year-ago quarter’s reported numbers. The company delivered an average earnings surprise of 3.8% for the trailing four quarters.