The stock market has immersed itself in the financial reports that hundreds of companies are releasing. After having seen pressure throughout much of this week, investors got themselves in a better mood on Thursday morning. Futures contracts signaled a potential triple-digit rise in the Dow Jones Industrial Average (^DJI -0.99%).
A trio of Dow Jones Industrials components reported their financial results Thursday morning. Although Merck (MRK 2.88%) and Honeywell (HON -0.91%) posted solid advances that helped contribute to the Dow's early gains, Caterpillar (CAT -6.96%) wasn't able to join in the party. Below, you'll get the highlights of all three reports.
Merck perks up
Shares of Merck climbed more than 2% Thursday morning. The drugmaker saw declining results because of falling demand for its COVID-19-related products, but strength elsewhere in its portfolio gave investors confidence about its future path.
Merck's overall revenue fell 9% year over year in the first quarter to $14.5 billion. Adjusted net income of $3.56 billion took a 34% hit, pushing adjusted earnings down to $1.40 per share.
Merck's sales decline was entirely attributable to an 88% plunge in revenue from its Lagevrio COVID-19 antiviral. By contrast, sales of HPV vaccine Gardasil soared 35%, and the blockbuster immunotherapy drug Keytruda kept up its momentum with a 20% rise.
For the full year, Merck expects revenue of $57.7 billion to $58.9 billion and adjusted earnings of $6.88 to $7 per share. Even after big gains and an aggressive acquisition bid, Merck's stock still looks like a good value with those numbers as context.
Honeywell revs up
Honeywell also posted a better-than-2% rise early Thursday. First-quarter results included solid revenue and earnings gains.
Honeywell saw sales climb 6% year over year, lifted by double-digit percentage organic sales growth in the aerospace segment as well as its performance materials and technologies division. A big boost in operating margin helped push adjusted earnings higher by 8% to $2.07 per share. Honeywell reported record backlogs of $30.3 billion as strength in commercial aviation contributed considerably to its success.
Moreover, Honeywell is optimistic about the rest of the year. Even with economic uncertainty, the company boosted its guidance and now expects sales to grow 3% to 6% on an organic basis. Adjusted earnings should be between $9 and $9.25 per share, up from a previous range of $8.80 to $9.20 per share. That has shareholders excited about long-term future prospects for Honeywell.
Caterpillar stock slips despite strong results
Caterpillar was the lone holdout, as its stock dropped 1%. Yet the heavy equipment manufacturer's first-quarter results showed strong demand.
Caterpillar's revenue jumped 17% year over year in the first quarter to $15.9 billion. That helped adjusted earnings soar to $4.91 per share, up from $2.88 per share in the year-ago period.
Every segment under Caterpillar's corporate umbrella performed well. Energy and transportation led the way with a 24% sales increase, and segment profit nearly doubled from year-ago levels. Resource industries also showed strength with a 21% rise in segment revenue and a doubling of profit, while even the more economically sensitive construction industry posted a 10% sales gain and a nearly 70% rise in segment profit.
Add all three of these reports together, and you can see that across the economy, companies are finding ways to meet the challenges of today's economic environment. That bodes well for the long-term prospects for the stock market, even if not every stock climbs after posting solid financial results.
