Earnings from Cognizant and Ingredion

October was another up month for the S&P 500. This makes seven winning months in a row, and except for a very small loss, this was nearly our 12th-straight up month in a row.

This morning, we got the ISM report for October. I like this report because it comes out on the first business day of each month. For October, the ISM was 58.7, which was a little bit below expectations. Any reading above 50 means the manufacturing sector is expanding. The ISM for September was 60.8 which was the highest in 13 years.

The ADP payroll report said that 235,000 private sector jobs were added last month. That’s more than economists had been expecting. The ADP report is always a preview of the official jobs report, which comes out on Friday. Wall Street is expecting that 310,000 jobs were created in October. The issue here is that it reflected the rebound from the hurricane-impacted report for September.

We got two more Buy List earnings report this morning. First up, Cognizant Technology Solutions (CTSH) reported Q3 earnings of 98 cents per share. Previously, the company had told us to expect Q3 earnings of at least 95 cents per share.

CTSH also raised their full-year guidance from at least $3.67 per share to at least $3.70 per share. Now the bad news. That implies Q4 earnings of 95 cents per share which is below the 98 cents Wall Street had been expecting. Traders didn’t like that and the stock is down around 5% this morning.

“We are making consistent progress in executing the plan to accelerate our shift to digital services and solutions,” said Francisco D’Souza, Chief Executive Officer. “We’ve systematically built the significant capabilities needed to help our clients transform their business, operating, and technology models ̶ a transformation we call digital at scale. We believe our long-term relationships with clients and deep understanding of their priorities puts us in a privileged position to help them adapt, compete, and grow.”

On the revenue side, Cognizant expects revenues between $3.79 billion and $3.85 billion. Wall Street had been expecting $3.76 billion. I’m not concerned about this report. CTSH’s numbers are fine.

For Q3, Ingredion (INGR) reported Q3 earnings of $2.21 per share. That beat the Street by 19 cents and it’s a nice increase from $1.96 per share a year ago. The company raised the low-end of its full-year guidance by 15 cents per share. Ingredion now expects 2017 earnings of $7.65 to $7.80 per share. That implies Q4 earnings $1.67 to $1.82 per share. The stock is currently up 3.6%.

Posted by on November 1st, 2017 at 11:25 am


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