Apple, Amazon Flub Earnings — Thursday’s IP Market Recap

by Marc Bastow | October 25, 2012 5:36 pm

Apple, Amazon Flub Earnings — Thursday’s IP Market Recap

IPMarketRecap Apple, Amazon Flub Earnings    Thursdays IP Market Recap[1]U.S. stocks shot up to open Thursday before listing to lesser gains by the end of the day. Of course, much of the malaise could’ve been attributed to investors simply waiting for the after-hours release of earnings from market-making giant Apple (NASDAQ:AAPL[2]).

And when they came, investors were disappointed.

Shares were trading down more than 1% after the bell Thursday following the company’s announcement of worse-than-expected earnings. Profits missed analyst predictions as consumers held off on iPad purchases pending the anticipated release of the newer iPad Mini[3]. Profits did rise 23% to $8.67 per share, but that mark still missed analyst estimates of $8.75. Sales and profit forecasts fell short of expectations, too, as did actual sales of the iPad[4] (14 million vs. expectations of 15.3 million).

Amazon (NASDAQ:AMZN[5]) was hurting even worse in after-market trading, falling more than 3% as the company reported a third-quarter loss[6] — the company’s second consecutive quarter in the red — and net sales also fell short of expectations. Additionally, Amazon provided full fiscal-year guidance that was tepid at best.

The good news on the economic front early Thursday was that jobless claims fell to 369,000 in the week ended Oct. 20, down from 392,000 in the previous week; economists expected claims to fall to 375,000. Meanwhile, the Census Bureau said new orders for durable goods rose 9.9% in September, up for the fifth month in a row and above expectations of an 8% increase. The National Association of Realtors also reported that pending home sales increased, as the group’s index of home sales that are in contract but not yet closed rose to 99.5 in September from 99.2 in August.

That helped lift the S&P 500 by 0.3% to 1,412.97, the Dow 0.2% to 13,103.68, and the Nasdaq 0.15% to 2,968.12.

Consumer companies led the way with earnings releases on the day. Procter & Gamble (NYSE:PG[7]) was the Dow’s biggest gainer, up nearly 3% despite a mixed quarterly report[8] that saw lower top and bottom lines that turned positive once adjustments were made. Meanwhile, Colgate-Palmolive (NYSE:CL[9]) earnings rose over the past quarter, but missed estimates by 1 cent per share on revenue down 1.2% year-over-year. CL also announced a restructuring plan that will include cutting its work force by 6% over the next four years. Colgate shed nearly 2% Thursday.

Unilever (NYSE:UL[10]) had the most promising report of the three, with revenue growth up over 10% as demand for its personal and home care products grew in China, India and other emerging markets. The company also indicated it expects modest improvement in core earnings for the year. Investors rewarded the optimism with a 2.5% jump in the share price.

On the technology side, F5 Networks (NASDAQ:FFIV[11]) shares lost 11% despite posting fourth-quarter adjusted earnings 20.5% higher than a year ago. Adjusted EPS of 87 cents missed estimates of 94 cents, and the company provided a note of caution for the future.

Performance apparel maker Under Armour (NYSE:UA[12]) also found the wrath of investors[13] anticipating big numbers, as gains of more than 20% in each of its apparel lines were “rewarded” with a 6% beating. And shares of internet social game-maker Zynga (NASDAQ:ZNGA[14]) surged 12% after last night’s announcement[15] of a move into online gambling.

Lastly, Best Buy (NYSE:BBY[16]) shares were hammered 10% as investors reacted to the news of a management shakeup[17] and an acknowledgment by CEO Hubert Joly that earnings will struggle the remainder of the year thanks to slower sales and squeezed margins.

Friday’s earnings calendar is not nearly as crowded, but does contain notables Comcast (NASDAQ:CMCSA[18]), Goodyear Tire & Rubber (NYSE:GT[19]), and the S&P 500′s newest member, LyondellBasell (NYSE:LYB[20]).

Three Up

Three Down

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

Endnotes:
  1. [Image]: http://www.investorplace.com/hot-topics/investorplace-market-recap/
  2. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  3. anticipated release of the newer iPad Mini: http://investorplace.com/2012/10/apple-drops-the-ipad-mini-and-a-bombshell/
  4. actual sales of the iPad: http://www.businessweek.com/news/2012-10-25/apple-profit-misses-estimates-on-disappointing-ipad-tablet-sales
  5. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  6. reported a third-quarter loss: http://investorplace.com/2012/10/amazon-disappoints-but-touts-its-tablets/
  7. PG: http://studio-5.financialcontent.com/investplace/quote?Symbol=PG
  8. a mixed quarterly report: http://investorplace.com/2012/10/procter-gamble-catches-a-q1-break/
  9. CL: http://studio-5.financialcontent.com/investplace/quote?Symbol=CL
  10. UL: http://studio-5.financialcontent.com/investplace/quote?Symbol=UL
  11. FFIV: http://studio-5.financialcontent.com/investplace/quote?Symbol=FFIV
  12. UA: http://studio-5.financialcontent.com/investplace/quote?Symbol=UA
  13. the wrath of investors: http://investorplace.com/2012/10/under-armour-absorbs-the-heat-of-expectations-cmg-ua-lulu/
  14. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  15. last night’s announcement: http://investorplace.com/ipo-playbook/good-news-from-zynga-finally/
  16. BBY: http://studio-5.financialcontent.com/investplace/quote?Symbol=BBY
  17. management shakeup: http://investorplace.com/2012/10/best-buy-is-still-struggling-amid-the-icebergs-bby-msft-aapl-goog-cs/
  18. CMCSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=CMCSA
  19. GT: http://studio-5.financialcontent.com/investplace/quote?Symbol=GT
  20. LYB: http://studio-5.financialcontent.com/investplace/quote?Symbol=LYB
  21. ANGI: http://studio-5.financialcontent.com/investplace/quote?Symbol=ANGI
  22. FNP: http://studio-5.financialcontent.com/investplace/quote?Symbol=FNP
  23. MU: http://studio-5.financialcontent.com/investplace/quote?Symbol=MU
  24. CROX: http://studio-5.financialcontent.com/investplace/quote?Symbol=CROX
  25. P: http://studio-5.financialcontent.com/investplace/quote?Symbol=P
  26. SHW: http://studio-5.financialcontent.com/investplace/quote?Symbol=SHW

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