Beta Finch - S&P 100 - EN

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, joined as always by Jordan, and today we're cracking open Coca-Cola's third quarter 2026 results. KO had some really interesting numbers to unpack this quarter.

**JORDAN:** Yeah, there's a lot here — strong volume, raised guidance, and some big structural changes brewing for next year. Should be a good one.

**ALEX:** Before we dive in, just our standard reminder: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Solid. Okay, let's get into it.

**ALEX:** So headline numbers first. Coca-Cola posted 5% unit case volume growth and 7% organic revenue growth for Q3. That's genuinely strong, especially on top of a strong first half. Comparable EPS came in at $0.91, up 11% year-over-year, though two points of that was currency tailwind.

**JORDAN:** And here's the thing that stood out to me — they actually RAISED full-year guidance. They're now expecting organic revenue growth of at least 5%, and comparable EPS growth of at least 11% versus the $3 base from 2025. Free cash flow guidance also moved up to at least $13 billion for the year.

**ALEX:** Right, and the balance sheet is in great shape too — net debt leverage at 1.3 times EBITDA, which is actually below their target range of 2 to 2.5 times. CFO John Murphy used this word "optionality" a lot on the call, which I think is code for "we're sitting pretty and waiting to see what happens with that IRS case."

**JORDAN:** That IRS dispute keeps popping up as kind of the elephant in the room. They're not giving specifics, but they're clearly positioning the balance sheet to handle whatever outcome comes down — best case or worst case.

**ALEX:** Let's talk margins for a second, because that's where some real execution shows up. Comparable gross margin expanded about 170 basis points, operating margin up 110 basis points. And importantly — margin expansion didn't come at the cost of investment. They actually ramped up marketing spend, double-digit growth in above-the-line investment.

**JORDAN:** That "more with more" philosophy Lauren Lieberman from Barclays asked about — basically, Coke's saying we can grow margins AND keep pouring money into brand building at the same time. That's not easy to pull off, so I think that's a genuine positive signal for the quality of this growth.

**ALEX:** Now let's talk geography, because this is really a tale of different markets doing different things. North America was actually flat on volume — which sounds concerning at first —

**JORDAN:** — but context matters here. That flatness was largely due to July 4th holiday timing shifting into Q2, plus they're cycling really strong prior-year comps on Topo Chico and BODYARMOR. Management pointed out volume actually improved sequentially each month through the quarter. And get this — Mr. Pibb posted another quarter of double-digit growth. Small brand, but a fun data point.

**ALEX:** Meanwhile, emerging markets are carrying a lot of weight. Brazil was strong, India had all ten of its top brands growing double digits, and Africa delivered high single-digit volume growth despite tough comparisons. Mexico and Argentina remain challenging, but management says they're seeing encouraging progress.

**JORDAN:** China's an interesting one — "subdued" consumer environment, cautious spending, soft domestic demand — but Coke still grew volume there, leaning hard into digital commerce and emerging channels to find growth even when the broader consumer isn't spending freely.

**ALEX:** Let's talk about the Q&A, because there were some really pointed questions. Chris C

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, where we take the transcripts so you don't have to. I'm Alex.

JORDAN: And I'm Jordan. Today we're digging into Illinois Tool Works — ticker ITW — and their Q3 2026 results, which came out this morning.

ALEX: Before we jump in, quick reminder: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Alright, so Alex, ITW — if people don't know this one, it's a diversified industrial manufacturer, seven segments, everything from automotive parts to welding equipment to food service equipment. Very much a "boring but excellent" operator.

ALEX: Exactly, and this quarter was anything but boring on the numbers front. Let's start with the headline: record operating income, organic growth of 4%, and get this — it would've been 5% if not for a tornado that hit two of their welding facilities in Appleton, Wisconsin. That weather event alone knocked about $40 million off revenue.

JORDAN: Which, by the way, kudos to the team there — everyone was safe, and they got operations back up fast. That's actually a nice little proof point for ITW's whole operating philosophy. They run this decentralized, entrepreneurial culture — basically empowering local business unit leaders to make decisions fast. And this was a real-world stress test of that.

ALEX: Right, and even with that disruption, welding still grew 7% — or 15% if you strip out the tornado impact. That's a huge number.

JORDAN: It really is. And it wasn't the only standout. Test and Measurement and Electronics segment put up 16% organic growth, with electronics alone surging 31%. That's being driven by semiconductor demand — their customers are racing to build out fab capacity and produce printed circuit boards to meet AI-related demand.

ALEX: So ITW is basically riding the AI infrastructure wave, just one layer removed from the chipmakers themselves.

JORDAN: Exactly, they're the picks-and-shovels behind the picks-and-shovels. And management said on the call they believe this growth is "very sustainable" given how much they've invested in these businesses over the past several years.

ALEX: Let's talk bottom line now. Operating margin expanded 40 basis points to 27.8% — a quarterly record. GAAP EPS came in at $3, up 7% year-over-year, even with a tax rate headwind that cost them about 10 cents a share.

JORDAN: And because of the strong quarter, they raised full-year EPS guidance again — third time this year — to a new midpoint of $11.50, which implies 10% growth for the full year.

ALEX: One thing that stood out to me is this concept they keep bringing up — CBI, or Customer-Back Innovation. Basically, new products and solutions developed in partnership with customers. It's contributed more than 3% to revenue growth this year, up from 2.4% in 2025.

JORDAN: And CEO Christopher O'Herlihy called that the "single biggest catalyst" for hitting their long-term goal of 4%-plus organic growth. It's a steady climb — they said it was 1% five years ago, 2% two years ago, now over 3%. That's a real trend, not a one-off.

ALEX: Not every segment was rosy though. Automotive OEM was down 2%, and margins there fell 170 basis points due to a price-cost timing lag — meaning input cost inflation hit before their price increases caught up. Construction Products also saw margins down 170 basis points for similar reasons.

JORDAN: Right, and management was pretty transparent about this — they said in the Q&A that they're "busily recovering price" in both those segments and expect that lag to resolve by the time we get into 2027, when they're forecasting a more normal environment — actually a 10-20 basis point tailwin

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown. Today we're diving into Boeing's third quarter 2026 results, and Jordan, there's a lot to unpack here.

**JORDAN:** There really is. Boeing's been on this long road back, and this quarter feels like a real inflection point in the story.

**ALEX:** Before we get into it, quick disclaimer for everyone tuning in: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Important stuff. Okay, let's get into the numbers.

**ALEX:** So Boeing posted revenue of $24.2 billion, up 4% year-over-year. The growth came mainly from defense and services, which offset a less favorable delivery mix on the commercial side.

**JORDAN:** Right, and that commercial piece is interesting — they actually delivered 161 airplanes this quarter, the most since 2018. But revenue in that segment was still down 3% because the mix of planes being delivered wasn't as profitable.

**ALEX:** Operating margin improved to 1.5%, and core EPS came in at a loss of $0.34 — still a loss, but better than prior year. Free cash flow was positive $464 million, which included a hit from that roughly $700 million DOJ settlement payment.

**JORDAN:** And here's the headline, I think, for investors: Boeing finally put out a multiyear free cash flow roadmap. $2 billion in 2026, $3 billion in 2027, $6 billion in 2028, and $10 billion by 2029.

**ALEX:** That's a big deal because management has been pretty cagey about long-term guidance the last couple years. CEO Robert Ortberg basically said they've "narrowed the range of outcomes" enough to finally commit to numbers.

**JORDAN:** And CFO Jay Malave was clear this isn't the ceiling — he kept emphasizing there's "significant growth potential beyond $10 billion" once you get past 2029 and some of these legacy cash drags fully clear out.

**ALEX:** Let's talk strategic wins, because this quarter had some genuinely historic news. The FAA certified both the 737-7 and the 737-10 — the 10 just last week. That closes out years of work on those variants.

**JORDAN:** Which means the spotlight now shifts entirely to the 777X. They're still targeting first delivery in 2027, though they admitted they need more flight test authorization, including ETOPS testing, before they can finish the program.

**ALEX:** And on 737 production — this is the part analysts really grilled them on. They're still trying to stabilize at 47 planes a month, and Ortberg admitted it's taking longer than expected. Rate 52 has now been pushed to the back half of 2027.

**JORDAN:** The culprit was pretty specific too — issues in the wing "back shop," where some of their process improvements just didn't yield the flow savings they expected. Ortberg was refreshingly candid: engines aren't the problem, it's wings and, to a lesser extent, fuselage output out of Wichita.

**ALEX:** I appreciated that he kept hammering this theme: "it's more important that we do this ramp right than in what particular month we achieve a rate break." That's a very different Boeing tone than a few years ago.

**JORDAN:** Now let's talk about the real showstopper — defense. Boeing won the Navy's F/A-XX sixth-generation fighter program. Combined with their earlier NGAD win for the Air Force, that makes Boeing the exclusive sixth-gen fighter manufacturer for both the Air Force and Navy.

**ALEX:** That's a massive structural shift. Analyst Ron Epstein actually called it out directly on the call — basically saying nobody expected Boeing to be sitting on both these programs a couple years ago.

**JORDAN:** And Ortberg's response was telling — he said defense growth expectations are shifting from "low sin

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! Today we're diving into American Tower's third quarter 2026 results — ticker AMT. This company just raised guidance for the third time this year, and there's a lot to unpack, including a Canada divestiture and some fascinating satellite industry chatter.

I'm Alex, joined as always by Jordan. Before we jump in, quick reminder: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks, Alex. And yeah, this was a busy one. American Tower is basically two businesses in one now — the classic tower leasing business, and this increasingly dominant data center play through CoreSite. Let's start with the headline numbers.

**ALEX:** Right. Property revenue grew about 4.5% — or closer to 7% on a cash, FX-neutral basis once you strip out a one-time DISH churn impact. That DISH churn thing keeps coming up, so we'll circle back to it. The real star, though, was CoreSite — data center cash revenue up 16.3%. Management actually raised their full-year data center growth outlook to 16%, up from 15% last quarter and 13% at the start of the year.

**JORDAN:** That trajectory is wild — 13, to 15, to 16% in just three quarters. It tells you demand from cloud and AI customers is accelerating faster than even AT themselves expected. CEO Steven Vondran called it "record leasing activity," and CFO Rodney Smith backed that up with some eye-popping details — cash mark-to-market on renewals running in the double digits this quarter, versus the usual 3-4%.

**ALEX:** That's a huge jump. Basically, when existing CoreSite customers renew, their rent is jumping way more than historical norms because demand is outstripping supply.

**JORDAN:** Exactly — and that's the kind of pricing power you want to see. Though Rodney did caution the full-year number will normalize closer to 6%, so don't extrapolate that double-digit renewal pricing for the whole year.

**ALEX:** Good nuance. Now, let's talk strategy, because this quarter had a big one: American Tower agreed to sell its Canadian business for roughly $2 billion, at about 26 times forward EBITDA.

**JORDAN:** That multiple is really the headline there. It tells you the market is willing to pay up for quality tower assets — and it validates how much value is baked into AT's North American portfolio generally. Management's framing this as "capital recycling" — take proceeds from a slower-growth market and redeploy into CoreSite, debt paydown, and buybacks.

**ALEX:** Speaking of buybacks — they repurchased about $315 million of stock in the quarter, plus another $68 million in October. And the board just tacked on a fresh $2 billion authorization, bringing total remaining capacity to around $3.1 billion.

**JORDAN:** That's a real signal of confidence from management. And leverage sits at 4.9 times net debt to EBITDA — comfortably inside their 3-to-5x target range, with the best credit rating in the tower peer group. So they've got real flexibility to keep doing all of this at once: buybacks, debt reduction, and growth investment.

**ALEX:** Let's get into the Q&A, because there was a really interesting exchange about satellite companies — specifically Starlink — potentially building out a terrestrial wireless network in the US.

**JORDAN:** This was probably the most forward-looking moment on the call. Analysts kept pushing on it, and Vondran's answer was basically: "Anyone building wireless infrastructure at scale in the US has to come to us." He pointed out AT already owns the equipment DISH abandoned in bankruptcy — including potentially valuable spectrum-adjacent gear — and they can make that available to any interested party.

**ALEX:** It's a classic "picks and shove

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown, bringing you the numbers and the narrative behind the biggest names in the market. I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into American Express, ticker AXP, fresh off their Q3 2026 report.

**ALEX:** Before we jump in, quick reminder: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** With that said, Alex, this was a busy quarter for Amex. Lots of moving pieces.

**ALEX:** Lots of moving pieces is an understatement. Let's start with the headline numbers. Record revenue of $20 billion, up 9% year-over-year. GAAP EPS came in at $5.42, up 31%, but there's a big asterisk there.

**JORDAN:** Right, because that number is inflated by the sale of their stake in Global Business Travel Group. That deal added about $1.11 per share in gains. Strip that out, along with a restructuring charge, and adjusted EPS was $4.68 — still a healthy 13% increase.

**ALEX:** And speaking of that restructuring charge — this is the part that caught my eye. Amex took a $336 million hit, expected to eliminate about 5% of positions globally.

**JORDAN:** Yeah, CEO Steve Squeri was pretty candid about this. He basically said: we've got good momentum, but to win over the next few years, we need to be leaner and faster. So they're using part of that GBTG windfall to fund the restructuring rather than just dropping it all to the bottom line.

**ALEX:** It's a classic "use the good quarter to clean house" move.

**JORDAN:** Exactly. And there's one more notable item buried in there — the OCC civil money penalty. Amex took a legal reserve charge tied to a consent order. Squeri was upfront that "the deficiencies cited... should not have occurred" and they're accountable for fixing them. Importantly, no asset cap, and management says it won't impact 2027 guidance.

**ALEX:** That's the kind of regulatory headline that usually spooks investors, but the market seems to be taking it in stride given the rest of the quarter's strength. Let's talk guidance — they reaffirmed 10% revenue growth for the full year and actually raised EPS guidance to $18.30-$18.60 on a reported basis, or $17.60-$17.90 adjusted.

**JORDAN:** Raising guidance while absorbing a legal charge and a restructuring charge — that tells you how strong the underlying business is performing.

**ALEX:** Let's get into the spending trends because this is really where the Amex story lives. Total spend was up 8%. U.S. consumer spending was up 9.4% — the third-highest quarterly growth rate in three years.

**JORDAN:** And travel and entertainment was the real standout. T&E spend up 10%, airlines accelerating to 13%. Restaurant spend up 9%, but dig into the detail — Resy bookings were up 18%, and Fine Hotels + Resorts bookings were up 50%. That's the "membership model" thesis playing out in real numbers — when they combine their card benefits with their own travel and dining platforms, spend just explodes.

**ALEX:** Net card fees grew 17% on an FX-adjusted basis — that's their fastest-growing revenue line, largely riding the tailwind from last year's Platinum card refresh. CFO Christophe Le Caillec said this was the "inflection point" they'd been forecasting all year.

**JORDAN:** And credit quality remains pristine. Delinquency rates have been stuck at 1.2-1.3% for fifteen straight quarters. Write-offs only grew 3% while balances grew 8% — that's the premiumization story. They're attracting higher-income, more creditworthy members who spend more and default less.

**ALEX:** Now let's talk strategy, because Squeri spent a lot of time on AI and agentic commerce — basically how AI assistants will shop and transact on behalf of customers.

**JORDAN:** This

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex.

**JORDAN:** And I'm Jordan. Today we're digging into Union Pacific's third quarter 2026 results, reported October 22nd.

**ALEX:** Before we get into the numbers, our standard disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** With that out of the way, Alex, this was honestly a pretty remarkable quarter for a railroad.

**ALEX:** It really was. Let's start with the headline numbers. Union Pacific posted net income of $2.1 billion, and adjusted EPS grew 15% year-over-year to $3.53. Operating revenue hit $7.2 billion, up 15%.

**JORDAN:** And here's the kicker—that growth came from 6% volume growth, which is huge for a mature railroad. CEO Jim Vena was practically giddy on the call, talking about how beautiful the fall weather was in Omaha before diving into the real story.

**ALEX:** Right, and the real story is intermodal. Kenny Rocker, their marketing chief, said domestic intermodal volume jumped 13%, international was up 8%, and intermodal overall accounted for roughly 75% of the quarterly volume growth.

**JORDAN:** That's the fifth consecutive record quarter for domestic intermodal. Meanwhile, they're seeing softness in automotive and coal—coal volumes actually declined 3% because of lower natural gas prices and elevated inventories. So this isn't a story of every market firing on all cylinders, it's really intermodal carrying the load.

**ALEX:** Which makes sense given what we've heard about truck capacity tightening and some truck-to-rail conversion happening. Now, Jordan, let's talk about the elephant in the room on costs: fuel.

**JORDAN:** Oh, fuel was brutal this quarter. Diesel prices went from $2.56 a gallon last year to $4.21—that's a 64% increase. CFO Jennifer Hamann said that added a 140 basis point drag to the operating ratio. Fuel expense overall grew 69%.

**ALEX:** But here's what impressed me—strip out fuel and merger costs, and their core operating ratio actually improved 110 basis points. That tells you the underlying operational engine is running better than ever.

**JORDAN:** Exactly, and the operational stats back that up. Nine consecutive quarters of record workforce productivity. Headcount was actually down 1% while handling 6% more volume. Train length hit nearly 10,000 feet, up 2%. And get this—locomotive productivity held steady even as they ran the fleet far more efficiently relative to volume growth.

**ALEX:** EVP of Operations Eric Gehringer made a great point about "32-hour cars"—essentially cars that miss their service plan—being down 15% even with business up. That's real operational discipline, not just a lucky quarter.

**JORDAN:** Now let's talk guidance, because this matters for where the stock goes from here. Management affirmed full-year reported EPS growth in the high single digits versus 2025's $11.98. They also bumped up capital spending to $3.5 billion for the year, pulling forward some 2027 projects—mostly locomotive modernization and infrastructure work—because, frankly, the railroad is running well enough that they had the bandwidth to accelerate.

**ALEX:** That's a good problem to have. They're also sitting on $3.1 billion in cash and short-term investments, with free cash flow of $2.4 billion for the quarter. And notably, they raised the dividend 3%—the 20th consecutive year of dividend increases.

**JORDAN:** Now, Alex, we can't talk about this earnings call without addressing the merger. The proposed Norfolk Southern combination dominated a huge chunk of the Q&A.

**ALEX:** Right, the Surface Transportation Board has published a procedural schedule now, and management expects the first comment period deadline Nov

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, joined as always by Jordan, and today we're digging into Procter & Gamble's fiscal Q1 2027 results — reported October 22nd. Before we dive in, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** And honestly, Alex, this is a fun one. P&G doesn't usually give us "volume up 2.4%, organic sales up 4%" headlines — that's the kind of growth they haven't posted together since like 2022.

**ALEX:** Exactly. Let's set the scene. Organic sales grew 4.0% — and this is the first quarter they're reporting that number to one decimal place, by the way, a small disclosure change. Volume contributed 2.4 points of that growth, pricing added 0.4 points, and mix added over a point. The headline here is that this is volume-led growth, not price-led.

**JORDAN:** Which matters a lot right now. In this consumer environment, growing because more people are buying your stuff — not just because you raised prices — that's the better kind of growth story.

**ALEX:** All ten product categories grew. All six geographic regions grew. North America was up 3%, Europe up 4% with the UK leading at high-single-digits, and Greater China was the standout at 8% growth, driven by SK-II up 12% and Pampers up nearly 50%.

**JORDAN:** That Pampers number in China is wild, but CFO Andre Schulten was upfront that it's partly benefiting from a competitor stumbling in that market. Take out that tailwind and China's still growing mid-single-digits organically, which on its own is a great result given how soft Chinese consumer sentiment has been.

**ALEX:** Now let's talk bottom line. Core EPS came in at $2.00, up about 1% year-over-year, flat on a currency-neutral basis. Gross margin was actually down 150 basis points, operating margin down 80 basis points.

**JORDAN:** And here's the tension in this quarter — productivity improved a strong 250 basis points, but that got eaten up by rising commodity costs, freight, and continued marketing investment. Schulten flagged that commodity headwinds are only going to get worse from here.

**ALEX:** Right, let's talk about that number because it's a big one — $1.4 billion after-tax commodity cost headwind for the full fiscal year. That's tied to oil, assuming Brent crude around $100 a barrel. And when you add in currency headwinds, higher interest expense from recent M&A, and lower non-operating income, the total headwind below the operating line balloons to about $1.9 billion after tax, or $0.79 a share — that's 11% of last year's core EPS.

**JORDAN:** And what's notable is they only felt about 5% of that commodity hit in Q1, with 8% guided for the full year. So Schulten was basically telling investors: brace for Q2, because that's when the bigger chunk of this flows through the income statement.

**ALEX:** Speaking of guidance — despite all that cost pressure, P&G held its full-year guidance ranges. Organic sales growth of 1% to 3%, though they're clearly running ahead of that right now. Core EPS growth of 0% to 3%, landing between $6.89 and $7.11 a share. They did raise the all-in GAAP sales outlook, but that's just to reflect the Thorne acquisition, which closed in early October.

**JORDAN:** Thorne is interesting — that's the wellness and supplements brand. Management was clear on the call that they want Thorne's existing team to keep leading the business, with P&G playing a supporting role on things like international expansion and supply chain, not a full-on integration.

**ALEX:** They also reaffirmed free cash flow productivity guidance of 85-90%, and plan to re

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, joined as always by Jordan, and today we're diving into Lockheed Martin's third quarter 2026 results. Stock popped nearly 7% on this one, so there's clearly a lot to unpack.

Before we jump in — quick but important note. This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** And honestly, Alex, this is a transcript where you need that disclaimer taped to your forehead, because the headline numbers are eye-popping. Let's just start there — what did they actually report?

**ALEX:** Okay, so top line: revenue hit $20.7 billion for the quarter, up 11% year-over-year. EPS came in at $7.97 versus $6.95 a year ago — that's a 15% jump. And here's the kicker — backlog hit a record $292 billion, up $113 billion from last year, with a book-to-bill ratio of 4x.

**JORDAN:** A 4x book-to-bill is wild. For listeners who don't live in defense-contractor land, that means for every dollar of revenue they recognized this quarter, they booked four dollars of new orders. That's not a company managing decline — that's a company that can't build fast enough to keep up with demand.

**ALEX:** Exactly, and that's reflected in guidance too. Lockheed raised full-year 2026 guidance for the second quarter in a row. New sales range is $80 to $82 billion, operating profit between $8.575 and $8.675 billion, and free cash flow guided to $7.8 to $8 billion.

**JORDAN:** What stood out to me is *where* the growth is coming from. Missiles and Fire Control — the munitions segment — grew sales and profit both 24% year-over-year. That's the standout performer. But it's not a one-trick pony story. All four segments grew this quarter.

**ALEX:** Right, let's talk strategy for a second, because CEO Jim Taiclet spent a lot of time on this. The big theme is speed — compressing the time from R&D to actual production. A few examples really jumped out. Their Vectis autonomous aircraft program went from first drawing to wind tunnel testing in under two months. And Lockheed just greenlit building five Vectis aircraft with their own money, ahead of any formal government request.

**JORDAN:** That's a notable shift in posture — building ahead of the RFP instead of waiting for the Pentagon to ask. They call it "mission technology roadmaps." Essentially, Lockheed is betting on what the military will need in two or three years and building prototypes now, so when the contract does come, they're already production-ready.

**ALEX:** And there's a similar story with the Precision Strike Missile — flight tests in March and August turned into a $1.2 billion production contract in the same calendar year. Normally that path takes years.

**JORDAN:** The other huge strategic headline is the F-35 multi-year agreement. This locks in 850 U.S. aircraft over ten years, plus allied sales, getting total production up to 156 jets a year for a decade. CFO Evan Scott made a point of saying F-35 production is already accretive to margins, and this new agreement should make the whole supply chain — remember, 60% of F-35 content comes from suppliers — healthier and more predictable.

**ALEX:** That fixed-price-with-escalator model Jim Taiclet described in the Q&A was fascinating. Basically, under the old cost-accounting system, if Lockheed invested in automation to get more efficient, their price just got cut the next year — no reward for improving. Under these new long-term agreements, they keep the upside from their own efficiency gains. That's a real incentive shift.

**JORDAN:** It's a big deal for munitions specifically. They signed a seven-year PAC-3 contract worth up to $58.6 billion total, following an earlier seven-year THAAD deal. That's long enou

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, joined as always by Jordan, and today we're digging into Honeywell's third quarter 2026 results — and this one's special because it's the first full quarter for Honeywell as a standalone, pure-play automation company following the aerospace spinoff.

Before we jump in, just a quick note: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Alex, I've been waiting for this one. Honeywell basically told investors in June, "trust us, this new standalone structure is going to unlock value," and this quarter is the first real receipt.

**ALEX:** And it delivered. Let's start with the headline numbers. Organic sales growth came in at 7%, which actually beat the high end of the targets management laid out at their Investor Day back in June. Adjusted EPS hit $2.27, up 34% year-over-year. And margins expanded by 370 basis points to over 21%.

**JORDAN:** That 370 basis points of margin expansion is the number that jumps out at me. That's not incremental — that's a step function. And a big chunk of that came from something kind of unglamorous but really important: stranded cost elimination.

**ALEX:** Right, for listeners who aren't familiar — when a company spins off a division, like Honeywell did with aerospace, there are leftover corporate costs that used to be shared across both businesses. Those are "stranded costs," and management originally gave themselves a longer runway to eliminate them.

**JORDAN:** But CEO Vimal Kapur said on the call they're now on track to eliminate ALL remaining stranded costs by the end of this year — just six months after the spinoff. That's ahead of schedule, and it's a real signal of execution discipline.

**ALEX:** Let's talk segments, because all three outperformed. Process Automation and Technology — they call it PA&T — grew 8% organically, with projects up a huge 14% year-over-year on LNG and petrochemical backlog conversion. Building Automation posted its eighth straight quarter of high-single-digit growth, up 8% this quarter. And Industrial Automation, which has been the laggard, grew 4% — modest, but management framed it as a genuine turnaround story.

**JORDAN:** And I want to flag the data center angle, because it's becoming a real thread through this whole business. Orders in the data center vertical were up over 100% this quarter. Kapur talked about this expanding beyond just Building Automation — now Process Automation and even Industrial Automation are getting pulled into data center projects, things like liquid cooling systems and power infrastructure.

**ALEX:** It's turning into what he called a "pan-Honeywell strategy" — not just one segment riding the AI infrastructure wave, but multiple pieces of the portfolio contributing.

**JORDAN:** Let's talk backlog, because at nearly $19 billion, up 7% excluding divestitures, that's a serious cushion going into next year. And PA&T's backlog specifically was up double digits, driven by these massive LNG and energy project wins. Management's thesis here is that we're entering a multiyear energy upcycle — LNG buildout, refining expansion in Africa, and even early traction in low-carbon energy like sustainable aviation fuel and carbon capture.

**ALEX:** The Dangote refinery example was a great anecdote from the Q&A — they're literally doubling the size of what's already the world's largest refinery, plus building another one in Kenya. That's the kind of multi-year, high-certainty project Honeywell is plugging into.

**JORDAN:** Now, there was healthy skepticism in the Q&A too. A few analysts pushed on whether Q4 order guidance — high singl

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into Comcast's Q3 2026 results, dropped Thursday, October 22nd, and there is a LOT to unpack here.

**ALEX:** There really is. Before we jump in, quick reminder — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Important stuff. Okay, Alex, let's set the scene. This is a company mid-transformation, right? They're spinning off NBCUniversal and Sky by mid-2027, and on top of that, they just announced the biggest operating overhaul in the company's history.

**ALEX:** Exactly. Let's start with the numbers. Pro forma revenue was flat, adjusted EBITDA up about 0.8%, adjusted EPS came in at $1.07, and free cash flow was strong at $4.2 billion for the quarter.

**JORDAN:** Flat revenue sounds unremarkable until you realize what's happening underneath it. The Connectivity and Platforms segment — that's broadband, wireless, the core cable business — actually saw revenue decline 2.6% and EBITDA drop 4.4%.

**ALEX:** Right, and that's the headline tension of this whole quarter. Management is intentionally taking a hit on broadband economics to reposition the business. They lost 144,000 broadband subscribers this quarter.

**JORDAN:** But — and this is the silver lining they kept hammering — the declines are narrowing. Convergence ARPA and broadband ARPU declines both improved by about 190 basis points sequentially. So the bleeding is slowing down.

**ALEX:** And wireless is where the real energy is. They added 368,000 net wireless lines, pushing total lines past 10.6 million, up 18% year-over-year. CEO-in-waiting Mike Cavanagh and CFO Jason Armstrong both leaned hard into this "convergence" story — using Comcast's Wi-Fi network as a capital-light wireless strategy.

**JORDAN:** It's a clever model when you think about it. About 90% of Xfinity Mobile traffic rides over their own Wi-Fi, so they're not paying for spectrum or towers like Verizon or AT&T. They're essentially renting network capacity they already built for broadband.

**ALEX:** And they're converting free line offers into real revenue — 70% of those free lines are now converting into paid relationships. Premium unlimited plans jumped from 30% to 40% of new connects quarter-over-quarter.

**JORDAN:** Still, only 7% penetration of the total addressable wireless lines in their footprint — so Jason Armstrong and Steve Croney both framed this as "huge runway ahead," not "mission accomplished."

**ALEX:** Now let's talk about the elephant in the room: that transformation charge.

**JORDAN:** Yeah, this is big. They're expecting a Q4 charge of over $1 billion tied to what Mike Cavanagh called "the most significant operating and cost transformation in the company's history." We're talking organizational redesign, AI adoption, simplifying how they operate.

**ALEX:** And they're not shy about the AI angle — they've already cut customer service contact rates by roughly 20% and eliminated more than 30 million service interactions year-to-date using partnerships with Sierra and Cresta for AI-driven customer interactions.

**JORDAN:** There was a great exchange in the Q&A about this actually — an analyst asked whether AI agents acting on behalf of consumers could become a deflationary force in broadband. Jason Armstrong's answer was interesting: he basically said broadband usage keeps climbing — up 10% year over year — so customers are getting more value, not less, which protects pricing power. But he also admitted the real defense is differentiation, pointing to wireless bundling and new offerings like Xfinity Shield for home security.

**ALEX:** Let's pivot to the media side, because this was

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