Could have been worse: Earnings this week

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It could have been worse. That’s the good news for investors sifting through earnings this week.

Just look at Facebook (FB). The social media giant got slammed by reports of data breeches last month, but it seemed to have little impact on first-quarter results last night. Ad revenue surprised to the upside and momentum continued in some key growth areas like Instagram.

A similar tale could be told in semiconductor land, where everyone was fretting about a smart-phone slowdown. But Advanced Micro Devices (AMD) crushed estimates on strong demand for graphics chips and cryptocurrency mining. Texas Instruments (TXN) got a boost from industrial and automotive end markets (which management expects to become the real growth drivers). Xilinx (XLNX) also beat consensus expectations.

Chipotle Mexican Grill (CMG) is perhaps the biggest example of “it could have been worse.” The once-troubled burrito chain managed to raise prices enough to beat estimates under the leadership new CEO Brian Niccol. CMG is up 25 percent today and 27 percent on the week — by far the S&P 500’s bigger gainer in either time frame.

Then you have housing, where doom-and-gloomers worried that rising interest rates would hurt business. But the two homebuilders to report this week, PulteGroup (PHM) and D.R. Horton (DHI) both surprised the upside. Both firms said customers were willing to pay higher prices.

Industrials have been mixed. On one hand, more good news in commercial aviation. Boeing (BA) flew past analyst forecasts and raised guidance. United Technology (UTX), maker of Pratt & Whitney engines, reported similar results. Ditto for aircraft parts-supplier Honeywell (HON). Even General Electric (GE), the black sheep of the Dow Jones Industrial Average over the last year, benefited from strong jet-engine demand.

But there were some losers in the sector: Caterpillar (CAT) warned that increased spending will slow future profit growth, and 3M (MMM) got hammered after cutting guidance.

O’Reilly Automotive (ORLY) also falls under the category of “it could have been worse.” Investors worried about competition from Amazon.com (AMZN) dumped the auto-parts retailer last year, but last night it raised guidance as it reported better-than-expected earnings, revenue and same-store sales.

In conclusion: We just finished one of the busiest 24-hour periods of earnings season, and so far the good news seems to outweigh the bad.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.