Earnings in the Driver’s Seat — Wednesday’s IP Market Recap

by Marc Bastow | July 25, 2012 5:15 pm

IPMarketRecap Earnings in the Driver's Seat    Wednesday's IP Market Recap[1]The markets were a mixed mess Wednesday as earnings once again ruled the day.

The Dow managed to snap a three-day string of losses thanks to banner results released by components Boeing (NYSE:BA[2]) and Caterpillar (NYSE:CAT[3]). On the flip side, the Nasdaq fell in response to Apple‘s (NASDAQ:AAPL[4]) disappointing results offered up after the bell on Tuesday. All the earnings news was balanced by a report showing that new home sales fell 8.4%[5] in June after reaching a two-year high in May.

The Dow finished up 0.47% to 12,676, while the Nasdaq fell 0.31% to 2,854. The S&P split the difference, finishing down marginally at 1,337.

Caterpillar, one of the Dow’s most heavily weighted stocks, started the day by beating earnings and revenue numbers[6] and providing rosy guidance figures for the remainder of the year. Boeing followed suit[7] by announcing better than expected results and also calling for improved numbers the remainder of the year. Boeing gained 3%, while CAT finished up more than 1%.

Netflix (NASDAQ:NFLX[8]) continued to take a beating dropping 25% during the day as investors kept up their selling despite upbeat earnings released on Tuesday[9]. The stock is down more than 70% for the year, and said the upcoming Olympics will hurt short-term viewership numbers. RadioShack (NYSE:RSH[10]) also took a bath, dropping 29% on the day after announcing a big loss and suspending its dividend[11].

PepsiCo‘s (NYSE:PEP[12]) revenue and earnings[13] came in below last year’s quarterly figures, but adjusted net income topped Street estimates. Pepsi blamed cost-cutting, unfavorable foreign currency exchange rates[14] and restructuring charges, and despite the news the stock traded up over 2% during the day.

Ford‘s (NYSE:F[15]) Q2 profit dropped 57%, mostly due to losses in its European and Asian divisions[16] as domestic sales continued to improve. Ford also acknowledged it will not exceed last year’s $8.7 billion operating profit; shares fell 1% Wednesday.

AOL (NYSE:AOL[17]) surprised everyone by turning a solid profit for the second quarter against a loss last year, as ad revenue increased and the company got a big cash boost from a $1.05 billion patent sale to Microsoft. AOL shares jumped up more than 7%.

In after-hours earnings news, Zynga (NASDAQ:ZNGA[18]) was pummeled by almost 40% in early post-market trading after the company reported a second-quarter loss and slashed full-year earnings estimates to 4 to 9 cents per share from its April forecast of 23 to 29 cents per share. Zynga’s big-time partner Facebook (NASDAQ:FB[19]), which announces earnings tomorrow, was down 7% on the news.

Meanwhile, Whole Foods (NASDAQ:WFM[20]) reported results[21] that topped Street estimates and raised full year guidance, and investors drove shares up 12% after the bell.

Thursday’s earnings announcements include 3M (NYSE:MMM[22]), O’Reilly Auto (NASDAQ:ORLY[23]) and Goodyear Tire (NYSE:GT[24]).

Three Up

Three Down

Marc Bastow is an Assistant Editor at InvestorPlace.com. As of this writing, he was long INTC, AAPL and AOL.

Endnotes:
  1. [Image]: http://investorplace.com/hot-topics/investorplace-market-recap/
  2. BA: http://studio-5.financialcontent.com/investplace/quote?Symbol=BA
  3. CAT: http://studio-5.financialcontent.com/investplace/quote?Symbol=CAT
  4. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  5. report showing that new home sales fell 8.4%: http://investorplace.com/2012/07/new-home-sales-drop-8-4-in-june/
  6. beating earnings and revenue numbers: http://investorplace.com/2012/07/caterpillar-beats-forecasts-raises-outlook/
  7. Boeing followed suit: http://investorplace.com/2012/07/boeing-q2-revenue-soars-boosts-outlook/
  8. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  9. despite upbeat earnings released on Tuesday: http://investorplace.com/2012/07/netflix-takes-hit-after-earnings/
  10. RSH: http://studio-5.financialcontent.com/investplace/quote?Symbol=RSH
  11. announcing a big loss and suspending its dividend: http://investorplace.com/2012/07/radioshack-posts-q2-loss-suspends-dividend-shares-plunge/
  12. PEP: http://studio-5.financialcontent.com/investplace/quote?Symbol=PEP
  13. revenue and earnings: http://investorplace.com/2012/07/pepsico-tops-estimates-on-lower-profit/
  14. unfavorable foreign currency exchange rates: http://investorplace.com/2012/07/strong-dollar-is-slicing-corporate-sales/
  15. F: http://studio-5.financialcontent.com/investplace/quote?Symbol=F
  16. mostly due to losses in its European and Asian divisions: http://investorplace.com/2012/07/ford-announces-q2-losses-lowers-2012-outlook/
  17. AOL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AOL
  18. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  19. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  20. WFM: http://studio-5.financialcontent.com/investplace/quote?Symbol=WFM
  21. reported results: http://investorplace.com/2012/07/whole-foods-surges-on-q3-earnings/
  22. MMM: http://studio-5.financialcontent.com/investplace/quote?Symbol=MMM
  23. ORLY: http://studio-5.financialcontent.com/investplace/quote?Symbol=ORLY
  24. GT: http://studio-5.financialcontent.com/investplace/quote?Symbol=GT
  25. SYMC: http://studio-5.financialcontent.com/investplace/quote?Symbol=SYMC
  26. JNPR: http://studio-5.financialcontent.com/investplace/quote?Symbol=JNPR
  27. BRCM: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRCM
  28. WLP: http://studio-5.financialcontent.com/investplace/quote?Symbol=WLP
  29. GLW: http://studio-5.financialcontent.com/investplace/quote?Symbol=GLW
  30. CNX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CNX

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