Analysis: AWK F URI MSFT

Even as we and others digest the outcome of the Fed's July monetary policy meeting, we have to remember the June-quarter earnings season rolls on after the market's close, bringing with it a slew of reports, including those from AAP constituents American Water Works (AWK) , Ford Motor (F) , and United Rentals (URI) . While those companies have very different business models, as we saw with Microsoft's (MSFT) June quarter results, what each of those three have to say about the coming quarters will be critical. The September quarter and its summer swelter is a seasonally strong one for American Water Works. The summer tends to be a productive one for construction projects, a positive for usage rates at United Rentals, but what it says about the back half of 2022 will shape timing expectations for the Biden Infrastructure Law spending.

With Ford, there will be balance of ongoing supply chain shortages and the company maximizing its product mix toward higher revenue and margin offerings -- SUVs and trucks -- while ramping EV vehicle volumes. What the company has to say about recent demand patterns and its impact on its forward guidance will be critical to the shares given recession and consumer spending concerns. Unlike American Water and United Rentals, however, Ford is a story in progress as that migration to EVs and a lower cost footprint continues. Those focused on the near-term will likely size up any changes in Ford's 2022 guidance vs. its previous outlook that called for $11.5-$12.5 billion in adjusted operating profit and wholesale volume growth of 10%-15% for year in full.

While some may focus on the very near-term given the Fear reading on CNN Money's Fear & Greed Index, much like our comments earlier today about Microsoft, as that progress continues, the company should begin to be viewed differently than it is today. It's that longer-term unlocking of value that is the driver behind the portfolio's position in F shares. As the company moves

After all of that, here's what's expected for each of these portfolio positions:

  • Consensus expectations for American Water Works' June quarter are EPS of $1.16 on revenue of $984.7 million with EPS of $1.56 and revenue of $1.09 billion for the September quarter.
  • Turning to Ford, consensus expectations for the company's June quarter are EPS of $0.45 on revenue of $34.3 billion with EPS of $0.55 and revenue of $37.8 billion for the September quarter.
  • And for United Rentals, June-quarter consensus expectations are EPS of $6.46 on revenue of $2.7 million with EPS of $8.55 and revenue of $2.97 billion for the September quarter.

AWK, MSFT, F, URI are holdings in the AAP.