Markets edge higher while investors wait for key tech earnings

Dow went up 96, advancers over decliners 4-3 & NAZ declined 156.  The MLP index hardly budged in the 289s & the REIT index added 1+ to the 405s.  Junk bond funds inched higher & Treasuries had limited buying which hardly reduced yields.  Oil dropped 1 to the high 74s & gold gained 10 to 2436.

Dow Jones Industrials 

Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, reported weaker-than-expected quarterly revenue as disappointing demand in China weighed on the company's results.  Fiscal 4th-quarter EPS was $1.27, down from $1.37 a year earlier.  Excluding items, EPS was $1.40.  Net sales of $20.5B were essentially flat compared with the year-ago period.  PG's organic revenue, which excludes foreign currency, acquisitions & divestitures, increased 2% in the qtr.  Despite disappointing sales, the company's volume increased for the first time in more than 2 years.  Volume excludes pricing, making the metric a more accurate reflection of demand than sales.  Over the last several years, PG's price hikes across its portfolio, from diapers to detergent, fueled its sales growth, but volume flattened or even declined as consumers bought fewer of its products.  PG's volume rose 1%, thanks to stronger demand for its grooming, health care, & fabric & home-care products.  All 3 of those segments reported 2% volume growth for the qtr.  For fiscal 2025, P&G anticipates core EPS of $6.91 - $7.05.  The company reiterated its revenue outlook of 2-4% growth.  The stock dropped 11.80 (9%).

Procter & Gamble earnings beat estimates, but quarterly sales disappoint as China slides

Merck (MRK), a Dow stock, reported 2nd-qtr revenue & adjusted EPS that topped expectations as it saw strong sales from its blockbuster cancer drug Keytruda as well as other treatments in its oncology & vaccines portfolios & a newly launched cardiovascular drug.  The pharmaceutical giant also raised its full-year sales forecast to $63.4-64.4B on increased demand for key products, particularly its oncology treatments.  That's only slightly higher than the $63.1-64.3B guidance the company provided in Apr.  MRK lowered its adjusted profit guidance to $7.94 - $8.04, from a previous forecast of $8.53 - 8.65.  That updated outlook reflects 1-time charges of 26¢ & 51¢ for the acquisitions of Harpoon Therapeutics & EyeBio, respectively.  The drugmaker posted EPS or $2.14 for the 2nd qtr.  That compares with a net loss of $2.35 per share, during the year-earlier period, which included a charge related to its acquisition of Prometheus Biosciences.  Excluding acquisition & restructuring costs, the EPS was $2.28 for the 3-month period.  MRK reported $16.11B in revenue for the qtr, up 7% from the same period a year ago.  The stock sank 11.92 (6%).

Merck beats on earnings, raises sales outlook on strong demand for top drugs

Pfizer (PFE) reported 2nd-qtr revenue & adjusted earnings that blew past expectations & raised its full-year outlook, benefiting from its broad cost-cutting program, better-than-expected sales of its Covid antiviral pill, Paxlovid & strong non-Covid product sales.  The company now expects to book adjusted EPS of $2.45 - $2.65 for the fiscal year, up from its previous guidance of $2.15 - $2.35.  PFE also hiked its revenue outlook to $59.5 - 62.5B, up from a previous revenue forecast of $58.5- $61.5B.  That includes roughly $5B in expected revenue from its Covid vaccine & $3.5B from Paxlovid.  The pharmaceutical giant said its higher outlook reflects its strong performance in the first ½ of the year & its confidence in the “underlying strength” of its business.  Notably, PFE posted its first qtr of topline revenue growth since the 4th qtr of 2022, when its Covid revenues peaked.  The results come as PFE scrambles to stabilize its business & win back investor's favor following the rapid decline in demand for its Covid products.  Demand for its vaccine & Paxlovid plunged & transitioned to the commercial market in the US last year as the world emerged from the pandemic.  As revenue dried up, PFE in Oct launched a broad cost-cutting push that aims to deliver at least $4B in savings by the end of 2024.  The company has since announced a separate multiyear plan to slash costs, with the first phase of the effort slated to deliver $1.5B in savings by 2027.  The company booked 2nd-qtr net income of 1¢.  That compares with net income of 41¢ during the same period a year ago.  Excluding certain items, the company posted EPS of 60¢ for the qtr.  PFE recorded revenue of $13.3B for the 2nd qtr, up 2% from the same period a year ago.  The company pointed to growth from acquired drugs, recently launched treatments & other key products, which helped offset the drop in sales from its Covid business.  The stock was off 15¢.

Pfizer beats earnings estimates, hikes full-year outlook as drugmaker cuts costs

So far, earnings season has not been impressive.  A notable theme has emerged this earnings season, a willingness by investors to support companies that post weak results but outline a turn in their business coming soon.