Key Takeaways
- D.R. Horton (DHI) reported a robust start to fiscal 2026, significantly beating Q1 revenue and EPS estimates and providing an optimistic full-year outlook.
- U.S. Bancorp (USB) delivered mixed fourth-quarter 2025 results, surpassing adjusted EPS and net interest income expectations but falling short on its Basel III CET 1 Ratio.
- 3M (MMM) exceeded Q4 2025 adjusted earnings and sales forecasts, offering a positive outlook for 2026.
- The U.S. Treasury 30-year yield climbed by 10 basis points, reacting to a significant selloff in Japanese bonds and reaching its highest levels in over four months.
- U.S. Treasury Secretary Bessent commented on the need for discussions regarding credit card company practices and criticized the Federal Reserve's asset acquisition strategy.
Earnings season is gaining momentum with major companies reporting fourth-quarter and first-quarter results, showcasing a mixed but generally positive picture across various sectors. Homebuilder D.R. Horton (DHI) led with strong beats, while industrial giant 3M (MMM) also surpassed expectations. Banking results were more varied, as U.S. Bancorp (USB) posted a mixed performance, and Fifth Third Bancorp (FITB) delivered solid figures.
Homebuilders and Industrials Post Strong Results
D.R. Horton (DHI) kicked off its fiscal first quarter of 2026 with impressive financial performance, surpassing analyst expectations for both revenue and earnings per share. The company reported revenue of $6.9 billion, significantly higher than the estimated $6.6 billion, and adjusted EPS of $2.03, beating the $1.93 estimate. Despite a 30% decline in net income attributable to D.R. Horton, the company reiterated its full-year guidance, projecting homes closed between 86,000 to 88,000 and revenue between $33.58 billion to $35.0 billion. The positive outlook suggests resilience in the housing market despite affordability concerns.
Diversified industrial firm 3M (MMM) also reported a strong fourth quarter for 2025, with adjusted earnings per share from continuing operations reaching $1.83, exceeding the $1.80 estimate. Net sales for the quarter were $6.1 billion, a 1.5% year-over-year increase, also beating the $6.007 billion estimate. The company provided an optimistic outlook for 2026, forecasting adjusted EPS in the range of $8.50 to $8.70 and adjusted revenue growth of approximately 4%.
Banking Sector Shows Mixed Performance
U.S. Bancorp (USB) announced its fourth-quarter 2025 results, reporting adjusted EPS of $1.26, which surpassed the estimated $1.19. The bank also exceeded expectations for total average loans at $384.29 billion and total average deposits at $515.14 billion. Net interest income (FTE) came in at $4.31 billion, slightly above the $4.28 billion estimate, with a net interest margin of 2.77%. However, the bank's Basel III CET 1 Ratio was 10.8%, missing the estimated 11.1%. Despite the capital ratio miss, the bank demonstrated strong operational health with margin expansion and reduced credit risk.
Meanwhile, Fifth Third Bancorp (FITB) reported fourth-quarter EPS of $1.04, beating analyst estimates. The bank's net income available to common shareholders rose 20% year-over-year to $699 million. Net interest income for the quarter was $1,529 million, and the CET1 Capital Ratio stood at 10.77%. Fifth Third's strong performance was attributed to improved credit trends and business momentum.
Bond Market Reacts to Global Selloff, Treasury Secretary Comments on Credit Cards
The U.S. Treasury 30-year yield experienced a notable climb of 10 basis points, reaching levels not seen in over four months. This increase was primarily triggered by a significant selloff in Japanese bonds, which reverberated across global debt markets. The surge in yields reflects broader market concerns and a re-evaluation of global bond allocations.
In other economic news, U.S. Treasury Secretary Bessent made several key statements during a CNBC interview. He indicated that there are many aspects to consider regarding the practices and behaviors of credit card companies, suggesting that discussions on their operations are not unreasonable. Bessent also criticized the Federal Reserve, stating that the Fed is "losing billions because of mis-timed asset buys" and that Federal Reserve Chair Powell attending a SCOTUS hearing regarding Fed's Cook was a mistake. Furthermore, he commented on geopolitical matters, noting that Europe continues to purchase refined Russian oil from India and predicted that the EU's next step regarding its anti-coercion tool would be to form a working group.
Analyst Actions on Tech Giants
In the technology sector, Citigroup (C) adjusted its target price for Apple (AAPL) to $315 from $330. This revision was primarily driven by concerns over rising memory chip prices, which are expected to lead to a 100-basis-point decline in Apple's gross margin for the year.
Conversely, IBM (IBM) received a positive nod from Evercore ISI, which added the tech giant to its "Tactical Outperform" list. Evercore ISI also raised its price target on IBM to $330 from $315. This upgrade signals confidence in IBM's future growth prospects, particularly ahead of its upcoming quarterly results.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.