A survey of North American equities heading in both directions
On the rise
Honeywell’s (HON-Q) first-quarter revenue and profit beat Wall Street estimates on Tuesday, as a shortage of new jets fueled demand for its aerospace parts and aircraft maintenance services.
Shares of the industrial and aerospace giant rose 5.4 per cent as the company also raised the lower end of its annual profit expectation.
Honeywell’s forecast, which accounts for the impact of tariffs and global uncertainty on demand, indicates confidence in its ability to cushion the hit, thanks to rising sales for firms that supply parts and provide jet maintenance services.
The airline industry has had to fly older, more maintenance-intensive planes, while an attempted production rampup by planemakers has resulted in a surge of orders for parts suppliers.
Meanwhile, Mr. Trump’s broad levies on metals such as aluminum and steel along with steep tariffs on countries including China has threatened to raise costs for the industry and pressure an already-strained supply chain.
Honeywell now expects adjusted profit per share of between US$10.20 and US$10.50 for 2025, compared to its earlier forecast of between US$10.10 and US$10.50.
The company, however, marginally narrowed its sales forecast for the year and now expects between US$39.6-billion and US$40.5-billion, compared to its prior guidance of US$39.6-billion and US$40.6-billion.
Sales at its aerospace division, its biggest revenue generator, rose about 14 per cent to US$4.17-billion in the first quarter.
Its total quarterly sales rose about 8 per cent to US$9.82-billion, compared to expectation of US$9.59-billion, according to data compiled by LSEG. Adjusted profit per share came in at US$2.51, beating Street estimate of US$2.21.
Pfizer (PFE-N) said on Tuesday it would generate US$1.7-billion more in savings from cost-cutting to its manufacturing and research operations and reported lower first-quarter revenue due to declining sales of its Paxlovid COVID-19 treatment.
The company reaffirmed its full-year forecast and announced measures to mitigate the impact of potential tariffs on pharmaceuticals by the Trump administration, including possibly shifting some production to the United States.
While the rates and timing of tariffs on the pharma sector are unclear, analysts expect that companies will have to absorb any near-term costs if they are imposed. Washington has launched an investigation into the industry, laying the groundwork for possible levies.
Last month, Pfizer CEO Albert Bourla said the company has the capability to move overseas manufacturing to its existing U.S. plants “if something happens.” Pfizer has 10 manufacturing sites and two distribution centers in the United States, employing nearly 10,000 people.
“While we continue to engage and plan for contingencies, we’re focusing day-to-day on what we can do to move our business forward,” Bourla said in prepared remarks on Tuesday.
Shares of the U.S. drugmaker, which have fallen 13.1 per cent so far this year, were up 3.3 per cent.
Potential tariffs could add to existing pressure for Pfizer. Investors have been pushing the company to bring new drugs to market that could make up for potential revenue lost from some top-selling medicines nearing the end of patent protection.
Even the drugs that outperformed Wall Street expectations this quarter face headwinds.
On an adjusted basis, Pfizer earned 92 US cents per share in the first quarter, compared with analysts’ expectations of 66 US cents per share, helped by cost cuts and a lower tax rate.
Despite the earnings beat, Pfizer is still forecasting a full-year adjusted profit of US$2.80 to US$3.00 per share on revenue of US$61-billion to US$64-billion .
Revenue in the quarter fell 8 per cent from a year ago to US$13.72-billion and missed analysts’ expectations of US$13.91-billion.
Kraft Heinz (KHC-Q) was up 0.2 per cent on Tuesday after it slashed its full-year organic sales and profit forecasts, as demand for its snacks and ready-to-eat meal kits takes a hit from higher prices and an uncertain economic backdrop wrought by recent U.S. tariffs.
Mr. Trump’s steep tariffs on trading partners have also fueled fears of high inflation and stagnation in economic growth, prompting Americans to tighten spending as many everyday essentials could become more expensive.
“We are also closely monitoring implications from market tensions such as tariffs, inflation, and the consequences to consumer behavior,” Kraft Heinz CEO Carlos Abrams-Rivera said, adding that the environment remained “volatile.”
Slowing demand for packaged meals such as Mac & Cheese, Lunchables and condiments such as mayonnaise has hurt Kraft Heinz, with budget-strained customers hunting for more affordable alternatives.
The company now expects fiscal year 2025 organic net sales to decline between 1.5 per cent and 3.5 per cent, from its prior forecast of flat to down 2.5 per cent.
The Heinz ketchup maker projected adjusted earnings per share of US$2.51 to US$2.67, from a prior range of US$2.63 to US$2.74.
For the first quarter ended March 29, it posted net sales of US$6-billion, below analysts’ average estimate of US$6.02-billion, according to data compiled by LSEG.
PayPal Holdings Inc. (PYPL-Q) missed Wall Street estimates for first-quarter revenue on Tuesday, overshadowing the payments giant’s profit beat, which caused its shares to rise in volatile trading.
The company’s results highlight the challenge of navigating growth expectations as PayPal undergoes an ambitious turnaround under CEO Alex Chriss’s leadership.
Since Mr. Chriss took the helm in late 2023, PayPal has narrowed its focus and concentrated on high-margin businesses instead of aggressive growth.
“PayPal had a great start to the year and our strategy is working. This is our fifth consecutive quarter of profitable growth,” Mr. Chriss said.
Still, PayPal stuck to its annual profit forecast, even at a time when U.S. President Donald Trump’s tariffs have fueled economic uncertainty.
Its revenue stood at US$7.79-billion in the first quarter, missing expectations of US$7.85-billion, according to estimates compiled by LSEG, while it earned US$1.33 per share, excluding one-time costs, topping analysts’ expectations of US$1.16.
Evercore analyst Adam Frisch said the results were a mixed bag given the revenue miss.
The company said it was sticking to its previous annual profit forecast despite a strong start to the year because of “uncertainty in the global macro environment.” It sees adjusted profit between US$4.95 and US$5.10 per share.
PayPal has been focusing on expense management, as it seeks to fund investments through savings from deploying automation and artificial intelligence.
Royal Caribbean (RCL-N) raised its annual profit forecast on Tuesday, benefiting from strong bookings and lower fuel costs, leading the cruise operator’s shares narrowly higher on the day.
Growing interest in high-end leisure travel among higher-income consumers, especially millennials and Gen Z, has boosted the cruise industry, with bookings surpassing historical levels in the recent past.
Royal Caribbean also benefited from easing fuel prices, which were at their peak due to escalating geopolitical tensions and significant shifts in global trade policies.
It earned an adjusted profit of US$2.71 per share in the first quarter, above estimates of US$2.54, according to data compiled by LSEG.
The company said it has expanded its annual forecast range in response to the complexity of the current macroeconomic landscape.
Its fiscal 2025 adjusted profit is now expected in the range of US$14.55 to US$15.55 per share, compared with its prior forecast of US$14.35 to US$14.65.
“While we appreciate the uncertainty surrounding the broader consumer demand, we believe structural factors are driving accelerated growth trends at Royal Caribbean,” said Sharon Zackfia, analyst with William Blair.
“We also believe a buffer exists against potential consumer softening,” with cruises being at a 20% discount compared to stay at resorts and hotels, Ms. Zackfia added.
On the decline
Shares of Coca-Cola (KO-N) closed narrowly lower on Tuesday after it reported better-than-expected revenue and profit for the first quarter, as the beverage giant benefits from price hikes and enjoys strong demand for its sodas, juices and milk offering Fairlife.
The Sprite and Fanta maker also maintained its full-year organic revenue and comparable profit forecasts, unlike PepsiCo (PEP-Q) and Procter & Gamble (PG-N) that lowered their annual expectations as the global trade war triggered by steep U.S. tariffs threatened to push up costs for American companies.
“(Coca-Cola’s) operations are primarily local, however, it is subject to global trade dynamics which may impact certain components of the company’s cost structure across its markets,” it said in a statement.
“At this time, the company expects the impact to be manageable.”
In the last quarter, Coca-Cola had underlined strategies to offer affordable packaging options and plans to use plastic bottles to mitigate the impact from 25-per-cent tariffs on aluminum imports.
“This morning’s print reaffirms our confidence in KO’s fundamentals despite a difficult macroeconomic backdrop,” RBC Capital analyst Nik Modi said.
“KO reiterated top- and bottom-line guidance, which should be viewed as favorable in this environment,” he said.
Rival PepsiCo last week called out subdued consumer spending, but demand for Coca-Cola’s slightly pricey products has so far remained stable, helping boost sales growth despite price hikes in highly inflationary markets such as Argentina and Latin America.
Its first-quarter overall average selling prices rose 5 per cent, while unit case volumes increased 2 per cent.
Still, volumes in its North America market fell 3 per cent, mostly due to a slowdown in demand for its legacy brands such as Coca-Cola and Sprite, as well as coffee.
In an attempt to boost demand in the region, the company has been betting on its portfolio of energy drinks and prebiotic sodas by launching new items such as Simply Pop.
Excluding items, the company earned 73 US cents per share, compared with estimates of 71 US cents.
United Parcel Service’s (UPS-N) first-quarter profit beat market estimates and the parcel delivery giant said it will cut 20,000 jobs to lower costs in an uncertain economy and in anticipation of weak volumes from its largest customer, Amazon.
Shares of the company were 0.4 per cent lower on Tuesday after it said it expects to save US$3.5-billion in 2025 from jobs cuts and by shutting 73 leased and owned buildings by the end of June.
Extensive tariffs by U.S. President Donald Trump have slowed down trade and led companies to reduce costs in anticipation of a demand hit. For parcel delivery firms, the slowdown is likely to reduce the need for shipping services between companies.
“The actions we are taking to reconfigure our network and reduce cost across our business could not be timelier,” CEO Carol Tome said.
UPS said it was not providing any updates to its full-year outlook due to the economic uncertainty even as it lowers costs through jobs cuts, warehouse closures, increased automation and asset sales.
“The removal of 2025 guidance will likely create a wide range of outcomes that may be difficult to underwrite without greater macro clarity,” Evercore ISI analyst Jonathan Chappell said.
The company last year said it cut its workforce by 12,000 jobs. It expects expenses between US$400-million to US$600-million during 2025, related to separation benefits and lease related costs.
The Atlanta-based parcel delivery firm in January warned that it was accelerating its plan to slash millions of deliveries for its largest customer, Amazon.com, which accounted for 11.8 per cent of its overall revenue in 2024. UPS also faces a sharp downturn in volume from China-linked bargain e-commerce sellers Temu and Shein after the U.S. decided that starting May 2 it will collect tariffs on goods that was duty-free up to US$800 per individual sale.
UPS’ first-quarter revenue fell marginally to US$21.5-billion but beat Wall Street expectations of US$21.05-billion, according to data compiled by LSEG.
UPS posted an adjusted profit per share of US$1.49 compared with expectations of US$1.38.
General Motors (GM-N) on Tuesday pulled its annual forecast, reflecting the uncertain effects of Mr. Trump’s global trade war, even as it reported strong quarterly results.
In an unusual move, the automaker pushed its investor call to Thursday as it wanted to wait before commenting on changes to tariff policy. GM’s shares fell on the news.
The company in January forecast net income between US$11.2-billion to US$12.5-billion for 2025, which did not include the impact of automotive tariffs.
Mr. Trump’s vacillating tariff policy has caused uncertainty in the automotive sector, with analysts estimating that new car prices could rise by thousands of dollars.
“The future impact of tariffs could be significant,” GM Chief Financial Officer Paul Jacobson said on a call with the media. “We’re telling folks not to rely on the prior guidance, and we’ll update when we have more information around tariffs.”
The automaker’s costs were up US$400-million from a year ago, Mr. Jacobson said, even though “the underlying business is still performing pretty well.”
GM’s quarterly results were partly hurt by fewer wholesale deliveries of the profitable full-size pickups and SUVs because of several weeks of downtime at assembly plants for upgrades and a January supplier fire, Jacobson said.
The company said on Tuesday it was temporarily pausing its share buyback activity, pending more clarity on the economic situation.
It had in February decided to repurchase US$2-billion of shares by the first half of this year, with the rest to be bought at any point of the company’s choosing.
CFRA Research analyst Garrett Nelson said news related to tariff modification could buffer potential losses.
GM revenue rose 2.3 per cent to US$44-billion in the first quarter, boosted by customers rushing to buy before prices rise, surpassing expectations of US$43-billion. Adjusted earnings per share of US$2.78 also exceeded estimates of US$2.74. Net income fell 6.6 per cent to US$2.8-billion.
Consumer confidence has weakened since mid-February, when Mr. Trump ramped up his threats of levies on most foreign imports. Tesla last week did not give guidance, promising to revisit the issue in its next quarterly results.
In China, where GM is restructuring its business, the automaker saw some relief with equity income at US$45-million, up from a first-quarter 2024 loss of US$106-million.
GM’s positive first-quarter results come after the automaker reported a rise of about 17 per cent in U.S. auto sales in the first quarter with high demand for trucks.
GM shares have lost 12 per cent so far this year, trailing its primary rival Ford (F-N), which has gained about 3 per cent in 2025.
Spotify Technologies SA (SPOT-N) forecast second-quarter profit below market estimates on Tuesday due to employee salary-related taxes, taking the shine off its strong subscriber growth and sending the shares of the Swedish music-streaming giant down.
The company’s profitability is closely watched by investors looking for signs that it can bolster margins after years of prioritizing user growth.
While cost-cutting initiatives and price increases have aided profit in the recent quarters, its latest earnings took a hit from taxes tied to higher salaries and benefits that jumped sharply due to a rise in the company’s stock price.
Spotify took 76 million euros (US$86.47-million) in charges in the first quarter, offsetting lower marketing costs and weighing on its operating profit of 509 million euros, which was below estimates of 518.2 million euros, according to data compiled by LSEG.
Its second-quarter profit forecast of 539 million euros includes 18 million euros in payroll taxes, and was below estimates of 557.5 million euros.
Still, strong subscriber growth showed that efforts to draw users with more video content and AI-powered services, including playlists generated with a simple written prompt, were working.
Premium subscribers rose 12 per cent to 268 million in the first quarter, beating Visible Alpha estimates of 265.3 million. The company had 678 million monthly active users, above estimates of 671.9 million.
CEO Daniel Ek told Reuters the company was focused on “adding various higher price point tiers” for those who want all the benefits.
He said a large share of new subscribers came from Latin America and the Asia-Pacific, regions he expects will power Spotify’s long-term growth.
It expects monthly active users to rise to 689 million in the second quarter, compared with LSEG-compiled estimates of 684.9 million. Premium subscribers are expected to increase to 273 million, above Visible Alpha estimates of 271.5 million.
Spotify’s shares have risen about 34 per cent so far this year.
With files from staff and wires