The Zacks Analyst Blog Eli Lilly, UnitedHealth and Tile Shop

Core Insights - The article discusses the Q2 earnings season, highlighting performance metrics for major companies including Microsoft, Eli Lilly, UnitedHealth, and Tile Shop Holdings, along with overall trends in the S&P 500 [2][3]. Q2 Earnings Season Overview - Total earnings for 29 S&P 500 companies that reported are up +12.8% year-over-year, with revenues increasing by +6.4%. Notably, 82.8% of these companies beat EPS estimates, while only 44.8% surpassed revenue estimates, marking a significant decline from 69% in the previous quarter [3]. - For the Finance sector, which has reported results from 20.6% of its total market capitalization, earnings are up +8.1% year-over-year with revenues up +11.9%. All companies in this sector beat EPS estimates, and 83.3% exceeded revenue estimates, indicating strong performance relative to historical averages [4]. Company-Specific Highlights Microsoft Corp. (MSFT) - Microsoft shares have outperformed the Zacks Computer - Software industry, increasing by +31.2% compared to +25.9% for the industry. Growth is driven by Intelligent Cloud and Productivity and Business Processes, with Intelligent Cloud revenues bolstered by Azure and other cloud services [5]. - Microsoft 365 Consumer subscribers reached 80.8 million, reflecting strong adoption. However, declining commercial licensing and rising operating expenses pose challenges [6]. Eli Lilly and Co. (LLY) - Eli Lilly shares have outperformed the Zacks Large Cap Pharmaceuticals industry, rising +62.7% versus +24.2%. The company benefits from a robust portfolio of drugs for diabetes and cancer, with strong demand for products like Mounjaro and Zepbound [7]. - New product launches and pipeline advancements in obesity and Alzheimer's are expected to drive future growth, although challenges include generic competition and pricing pressures [8]. UnitedHealth Group Inc. (UNH) - UnitedHealth shares have performed in line with the Zacks Medical - HMOs industry, increasing by +5.6%. The company is positioned for growth through new deals and service expansions, with adjusted net earnings per share projected to rise to $27.5-$28.00 in 2024 from $25.12 in 2023 [8]. - High operating costs and membership concerns in its global business are noted as potential challenges [9]. Tile Shop Holdings, Inc. (TTSH) - Tile Shop shares have outperformed the Zacks Building Products - Retail industry, increasing by +17.4% compared to +10.4%. The company has a strong financial position with zero long-term debt and $24 million in cash, allowing for growth investments [10]. - Gross margins improved to 65.8% due to effective cost management, although challenges include a 10.2% decline in comparable store sales and high SG&A expenses [11].