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Good morning investors!

Every weekend we publish our “Earnings Recap” — an in-depth summary of the earnings reports for stocks that we cover.

Earnings season kicked off this week and five of the stocks we cover reported quarterly results this week — here is the list of companies we focused on:

• Taiwan Semi, Netflix, UnitedHealth, Procter & Gamble, Johnson & Johnson, Bank of America, Abbott Labs, Morgan Stanley, Goldman Sachs, Charles Schwab, and Prologis

Let’s dive in.

Taiwan Semiconductor (TSM)

Taiwan Semiconductor Manufacturing Company (TSMC) reported a 54% increase in net profit for Q3, driven by strong demand from AI applications.

Net income was $10.1 billion, or $1.94 per share, beating expectations of $9.3 billion, or $1.78 per share. Revenue rose 36% year-on-year to $23.5 billion.

TSMC's gross margin improved to 57.8% from 54.3% a year earlier while the company’s capital expenditure reached $6.4 billion.

For Q4, TSMC forecasts revenue between $26.1 billion and $26.9 billion, reflecting a 35% year-over-year increase at the midpoint, and it expects full-year capex to exceed $30 billion. 

TSM shares are +8.1% so far this week.

Netflix (NFLX)

Netflix reported third-quarter earnings that beat on the top and bottom lines and provided stronger than expected Q4 guidance.

Net income rose 41% to $2.4 billion, or $5.40 per share, beating estimates of $5.09 per share. Revenue increased 15% to $9.83 billion, slightly beating the estimate for $9.77 billion. 

Paid memberships reached 282.7 million, exceeding forecasts, with notable growth in the ad-supported tier, which saw a 35% increase in memberships quarter-over-quarter.

Regional revenues were robust, with U.S./Canada and EMEA revenues each growing 16% year-over-year.

Looking ahead, Netflix anticipates Q4 revenue to grow by 15% to $10.1 billion and expects EPS to double to $4.23, reflecting confidence in its expanding ad business and strong subscriber additions.

NFLX shares are +1.3% so far this week.

UnitedHealth (UNH)

UnitedHealth Group provided a 2025 profit forecast below Wall Street expectations, causing its shares to drop this week.

The company reported earnings of $7.15 per share, better than the $7.00 estimates, and revenue of $100.8 billion, beating estimates of $99.1.

The UnitedHealth segment saw revenue increase 7% from last year to $74.9 billion while the Optum segment saw revenue increase 13% to $63.9 billion.

However, the company’s overall medical care costs were higher than expected, with a medical care ratio of 85.2%, compared to the anticipated 84.4% and well above last year’s 82.3%.

UnitedHealth's 2025 profit forecast of up to $30 per share fell short of analysts' $31.18 estimate, and it also lowered the higher end of its 2024 adjusted profit forecast by 25 cents to $27.75 per share. CEO Andrew Witty noted the conservative forecast was due to reduced government payments for Medicare and low Medicaid rates.

UNH shares are -5.9% so far this week.

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Procter & Gamble (PG)

Procter & Gamble reported mixed results with weaker-than-expected revenue but stronger earnings.

The company’s revenue came in at $21.74 billion, falling short of estimates by 1% and marking a 1% decline from last year. Net income for the quarter stood at $4 billion, or $1.92 per share, which is a 12% drop from the previous year.

The company's performance was particularly impacted by lower demand, especially in China. Revenue in the Home Care segment increased by 3% year-over-year to $7.7 billion, while the Family Care segment saw a 1% decline to $5.1 billion. Beauty segment sales dropped significantly, falling 13% to $3.9 billion.

P&G's operating income grew slightly, up 1% to $5.8 billion, while operating cash flow decreased by 12% to $4.3 billion. The company’s gross profit margin remained strong at 52.1%.

P&G maintained its full-year guidance, forecasting revenue growth between 2% and 4%, earnings growth of 10% to 12%, and organic sales growth of 3% to 5%

PG shares are -0.6% so far this week.

Johnson & Johnson (JNJ)

Johnson & Johnson raised its 2024 profit and sales forecasts after reporting strong sales of oncology drugs and quarterly results that beat Wall Street expectations. 

Net income was $2.7 billion, or $2.42 per share, beating the consensus estimate of $2.21. Revenue also exceeded expectations at $22.5 billion, up 5.2% year-over-year.

The MedTech division grew 6.4%, bolstered by the acquisition of Shockwave Medical, while pharmaceutical sales also increased 6.4%, with cancer drug sales rising nearly 19%.

J&J adjusted its annual earnings forecast to $9.94 per share, reflecting acquisition-related costs, and raised its revenue forecast to $89.4-$89.8 billion for the year.

JNJ shares are +1.6% so far this week.

Bank of America (BAC)

Bank of America exceeded third quarter profit and revenue expectations on better-than-expected trading results.

Net income fell 12% from last year to $6.9 billion, or $0.81 per share, while revenue was $25.35 billion, slightly up 1% year-over-year.

Despite the decline in net income due to increased provisions for loan losses and higher expenses, the bank benefited from robust trading and investment banking.

Fixed income trading rose 8% to $2.9 billion, while equities trading surged 18% to $2 billion, both beating estimates. Investment banking fees also grew 18% to $1.4 billion, driven by strong client activity. The bank's global wealth segment showed solid growth, up 8%, indicating resilience across diversified revenue streams.

While net interest income dipped 2.9% to $14 billion, it was slightly above expectations. Provisions for credit losses totaled $1.5 billion, an increase of 25%. 

The company did not provide guidance.

BAC shares are +1.3% so far this week.

Abbott Labs (ABT)

Abbott Laboratories reported strong Q3 earnings, driven by its medical devices business.

Net income rose to $1.65 billion, or $1.21 per share, surpassing expectations of $1.20 per share. Revenue reached $10.64 billion, beating the forecast of $10.55 billion and up from $10.14 billion last year.

The medical devices unit saw an 11.7% growth, while nutrition sales slightly declined by 0.3%.  Diagnostics sales were $2.412 billion, roughly flat from the year prior.

Abbott raised the midpoint of its full-year earnings guidance to $3.34-$3.40 per share and adjusted earnings to $4.64-$4.70 per share, maintaining organic sales growth expectations of 9.5%-10%.

ABT shares are +1.5% so far this week.

Morgan Stanley (MS)

Morgan Stanley exceeded analysts' expectations for Q3 as each of its three main divisions generated more revenue than expected.

The company reported a 32% rise in profit to $3.2 billion, or $1.88 per share, and a 16% revenue increase to $15.38 billion.

The wealth management division led with a 14% revenue jump to $7.27 billion, beating estimates by $400 million. Equity trading revenue rose 21% to $3.05 billion, and fixed income revenue edged up 3% to $2 billion, both surpassing forecasts.

Investment banking saw a 56% surge in revenue to $1.46 billion, while investment management revenue increased 9%, also exceeding estimates.

Morgan Stanley did not provide guidance.

MS shares are +8.2% so far this week.

Goldman Sachs (GS)

Goldman Sachs topped estimates for third-quarter profit and revenue on strong results from its stock trading and investment banking operations.

The company reported a 45% profit surge to $2.99 billion, or $8.40 per share, and a 7% revenue increase to $12.7 billion.

The bank's equities trading stood out, growing 18% to $3.5 billion, well above estimates, thanks to strong derivatives and cash trading performance. Investment banking also excelled, with a 20% revenue boost to $1.87 billion, driven by debt and equity underwriting. Though fixed income trading slipped 12%, it still beat estimates as well.

Additionally, asset and wealth management revenue rose 16% to $3.75 billion, fueled by higher management fees and investment gains.

The firm did not provide guidance.

GS shares are +2.8% so far this week.

Charles Schwab (SCHW)

Charles Schwab shares jumped after reporting earnings and revenue that topped Wall Street estimates.

The firm reported earnings of $0.77 per share and revenue of $4.85 billion, slightly surpassing expectations. This represents a 5% increase in revenue year-over-year, while earnings remained flat compared to last year.

The firm saw a significant 88% increase in total net new assets to $90.8 billion and ended the quarter with $384 billion in client transactional sweep cash balances.

Asset management revenue grew 21% to $1.4 billion, and trading revenue increased by 4% to $797 million, reflecting solid client activity.

Net interest revenue dipped slightly by 1% year-over-year but improved to $2.2 billion as the net interest margin rose to 2.08%, signaling stability.

Schwab anticipates modest revenue growth of 2% to 3% for 2024 and expects a gradual expansion in net interest margin, albeit below previous targets due to the lower rate environment.

SCHW shares are +6.3% so far this week.

Prologis (PLD)

Prologis reported earnings and revenue that topped analyst expectations.

The REIT’s revenue increased 6% year-over-year to $2.03 billion while funds from operations (FFO) increased 14% to $1.43 per share.

The company’s rental revenue hit $1.9 billion, growing 7% from last year, while net income rose 35% to $1.0 billion. Prologis maintained high occupancy at 95.9% and achieved a net effective rent change of 67.8%.

The company slightly adjusted its full-year guidance, now expecting EPS between $3.35 and $3.45 and core FFO between $5.42 and $5.46. It also revised its same-store net operating income (NOI) growth outlook to a range of 6.5% to 7.0%, reflecting a positive outlook for its real estate portfolio.

PLD shares are +2.8% so far this week.

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Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.