Nine out of 10 companies deliver EPS wins this week

 Wall Street major averages were muted on Friday as the S&P 500 hoped to extend its four-day straight rally. 

Markets on Thursday ended mixed, but its benchmark S&P 500 index extended a rally to four straight days and further solidified itself in positive territory for the year.

“Markets continued to advance over the last 24 hours, as weak U.S. inflation data and lower oil prices raised expectations that the Federal Reserve would still cut rates this year,” Deutsche Bank's Henry Allen said.

There were several factors driving the rally, but a critically important one was the U.S. PPI data for April. It showed inflation pressures were much softer than expected, Allen added.

Earnings Roundup: Out of the 10 S&P 500 companies that reported earnings this week, nine of them beat EPS estimates, while eight of them topped revenue expectations. 

Let’s take a look at the quarterly performances of some of the prominent names that reported earnings this week: 

Walmart (WMT)’s comparable sales in the U.S. rose 4.5% to top the consensus estimate of 3.9%. Transactions were 1.6% higher during the quarter, and the average ticket was 2.8% higher compared to a year ago. E-commerce sales rose 21% during the quarter and contributed 350 basis points to comparable sales.

However, the management warned during the retailer's earnings conference call that tariffs could lead to higher prices for U.S. consumers.

Walmart CEO Doug McMillon said the company will do its best to keep consumer prices as low as possible, but due to the magnitude of the tariffs, even at the reduced levels announced this week, the company can't absorb all the pressure given the reality of narrow retail margins.

Walmart also held off on issuing Q2 EPS and operating income guidance with its report.

Applied Materials (AMAT) reported mixed fiscal second-quarter results, earning an adjusted $2.39 per share as revenue rose 6.8% year-over-year to $7.1B.    

The company said it expects third-quarter revenue to be between $6.7B and $7.7B, with the $7.2B midpoint right in-line with analyst's estimates. Adjusted gross margin is forecast to be 48.3%, while adjusted earnings per share are expected to be between $2.15 and $2.55 per share.

Cisco Systems (CSCO) reported a stronger outlook than the market expected, reporting adjusted earnings per share of $0.96, which was more than the consensus estimate of $0.92. 

Revenue for the third quarter totaled $14.1B, versus the estimate of $14.06B. Product orders were up 20%, while AI infrastructure orders surpassed $600M.

NRG Energy (NRG) crushed Q1 earnings expectations as revenues surged on gains across its regions and segments. Q1 net profit rose to $750M, or $3.61/share, from $511M, or $2.31/share, in the year-earlier quarter, as revenues jumped 16% to $8.59B. 

NRG's retail energy business delivered strong margins, its generation fleet had high availability, and its smart home segment performed better than expected, with 6% more customers and 4% wider margins, as well as record-high 90% retention.

Earnings next week:

Over ten companies are scheduled to report earnings next week, with the likes of Home Depot (HD), Palo Alto Networks (PANW), and Keysight Technologies (KEYS) reporting on Tuesday. 

Meanwhile, companies such as Lowe’s (LOW), Snowflake (SNOW), Best Buy (BBY) will report on Wednesday, with Intuit (INTU), Workday (WDAY), and Autodesk (ADSK) on Thursday. 

Booz Allen Hamilton (BAH) and Inventiva (IVA) will report on Friday. 

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