Delta and PepsiCo lower earnings outlooks as revenue rises
Constellation’s sales rebounded, Worthington Steel posted a loss, and drug developers disclosed research-related earnings charges.
Delta and PepsiCo reported higher revenue but lowered their full-year earnings outlooks. Delta’s September-quarter adjusted revenue rose 16% year over year, while PepsiCo’s third-quarter net revenue increased 5.6%. Their profit measures showed less progress: Delta’s adjusted diluted EPS was unchanged from a year earlier, and PepsiCo’s core operating margin contracted. Constellation Brands provided an exception, raising its reported EPS outlook after sales returned to growth.
Delta’s September-quarter adjusted operating revenue was $17.6 billion, with adjusted diluted EPS of $1.72. CFO Erik Snell said Delta absorbed more than $500 million of higher fuel costs relative to its early-July guidance. Delta now expects full-year 2026 adjusted EPS of $5.10–$5.60, down from $6.50–$7.50, and free cash flow of approximately $2.5 billion, down from $3 billion–$4 billion. Premium revenue nevertheless increased 18% on a 6% increase in seats, while total adjusted unit revenue rose 15% on flat capacity.
PepsiCo’s third-quarter net revenue reached $25.27 billion, and organic revenue growth accelerated to 3.1% from 2.4% in the second quarter. PepsiCo said effective net pricing and organic volume growth across beverages and convenient foods contributed to that acceleration. Core operating profit rose 3% to $4.28 billion, but core operating margin fell 35 basis points to 16.9%; GAAP operating margin expanded 195 basis points to the same level. PepsiCo now expects fiscal 2026 core EPS growth of 2.5%–3.5%, versus its previous expectation of the low end of 5%–7%. North American beverages remained a weak spot, with organic revenue down 6%.
Constellation’s fiscal 2027 second-quarter net sales rose 6% to $2.633 billion for the three months ended August 31, reversing a 3% decline in the preceding quarter. Beer shipments increased 5.5%, but depletions fell 0.6% and beer operating margin declined 160 basis points to 39.0%. Constellation raised its fiscal 2027 reported EPS outlook to $11.85–$12.55 from $11.50–$12.20, while reaffirming its comparable EPS range of $11.20–$11.90.
EOG raises tax outlook; APA estimates lower U.S. oil prices
EOG Resources now expects third-quarter 2026 current tax expense of $835 million–$935 million, up from $545 million–$645 million. EOG attributed the revision to crude prices realized in the third quarter and anticipated for the full year exceeding the assumptions behind its August guidance because of the Middle East conflict. It did not update or confirm its other third-quarter or full-year guidance ranges.
APA’s preliminary estimates used a different comparison: third-quarter U.S. oil realizations were $87.50 a barrel, down from $93.20 in the second quarter. Estimated U.S. natural gas realizations turned positive at $1.45 per Mcf after negative $2.20 per Mcf. Meanwhile, Helmerich & Payne said it expects fiscal fourth-quarter direct margins at or near the high end of guidance across its three principal operating segments. H&P expects International Solutions direct margin of around $45 million, compared with approximately $31 million reported for the June quarter.
RPM’s segments diverge; Worthington’s sales jump
RPM’s fiscal 2027 first-quarter sales rose 4.8% to $2.22 billion for the three months ended August 31, with organic growth of 3.1% and adjusted EBITDA of $405.5 million. CEO Frank Sullivan said organic growth in Performance Coatings and Consumer, together with manufacturing, procurement and SG&A efficiencies, overcame raw-material inflation and a temporary Construction Products slowdown. Performance Coatings adjusted EBITDA rose 18.2% to $121.1 million; Construction Products adjusted EBITDA fell 9.7% to $166.2 million.
Worthington Steel’s first quarter including Klöckner produced a 212% net-sales increase to $2.727 billion, including $1.773 billion from the acquired business. Excluding Klöckner, sales rose 9%; CEO Geoff Gilmore said higher direct volumes and improved pricing drove solid core operating performance. Yet the net result from continuing operations attributable to the controlling interest swung to a $7 million loss from $36.8 million of earnings. Adjusted diluted EPS from continuing operations fell to $0.57 from $0.77. Acquisition-related professional fees were $18.6 million.
Research charges reduce drugmakers’ earnings outlooks
AbbVie recorded $216 million of third-quarter acquired in-process research and development and milestones expense, reducing its 2026 adjusted diluted EPS outlook by $0.11 to $13.76–$13.96. AbbVie said that guidance excludes any such expense beyond the third quarter because it cannot reliably forecast it. Regeneron separately said it expects an approximately $22 million pre-tax acquired IPR&D charge in third-quarter 2026 results, reducing both GAAP and non-GAAP diluted EPS by about $0.18; those results remained unfinalized.
NeoGenomics offered an operating-growth exception. It put preliminary third-quarter revenue at approximately $209 million and said it expects next-generation sequencing revenue growth of approximately 28% year over year, compared with the 26% reported in each of the first two quarters. NeoGenomics reiterated its existing full-year revenue and adjusted EBITDA guidance, while saying the revenue guidance midpoint is expected to increase following third-quarter performance, with details due on its earnings call.