The oil sector provided a welcome boost to a U.S. stock market that’s had a rough week and a half. The S&P 500 roared ahead by 1.3% on Tuesday, while the Dow Jones Industrial Average ended the day 1.3% higher.
Wednesday might not be so kind, if the premarket losses by Walt Disney Co (NYSE:DIS) and Fossil Group Inc (NASDAQ:FOSL) are any indication. But positive performances by the likes of Electronic Arts Inc. (NASDAQ:EA) might help stem the tide.
Here’s why DIS, EA and FOSL should be on investors’ radar today:
Walt Disney Co (DIS)
The run-up to Disney’s fiscal second-quarter earnings report was finally halted thanks to … well, earnings.
Disney posted its first earnings miss in a year as it reported $1.36 per share in profits versus expectations of $1.40 per share. Revenues of $12.97 billion also missed, as analysts were looking for $13.19 billion in revenues.
But there were some positive notes.
ESPN, which has been a weight around Disney’s neck in recent quarters, was actually a point of improvement on the quarter, “due to the benefit of lower programming costs and higher affiliate revenues.” Disney’s films also came in strong thanks to hits like Zootopia, with revs of $2.06 billion beating the Street.
Nonetheless, the misses were enough to jar DIS stock holders, who had ginned up shares by more than 10% in the past month or so. Disney stock was off 5% in Wednesday’s premarket trade.
Fossil Group Inc (FOSL)
Fossil will suffer a particularly ugly day after Q1 results missed estimates, and Q1 guidance came in woefully short.
The watchmaker’s sales came in at $659.8 million for its first quarter, while Wall Street analysts were calling for $667.8 million in revs. This was exacerbated by a 3% drop in comparable-store sales. Meanwhile, earnings of 12 cents per share came in well under the bar for 15 cents per share.
But really hampering Fossil was guidance, with the company saying it expects Q2 earnings to come in between breakeven to 15 cents per share — nowhere in the same ballpark as analysts, who were looking for 58 cents per share.
If Wednesday’s premarket action holds up, FOSL is set to lose more than 30%, which would take it to lows last seen in 2009.
Electronic Arts Inc. (EA)
Electronic Arts will have no such problem.
The gamemaker is firing higher Wednesday morning amid a record quarter that beat the Street.
Revenues of $924 million were up 3.1% year-over-year and easily hurdled expectations of $888.8 million. Adjusted profits of 50 cents per share were up big from the year-ago period’s 39 cents and also leaped over estimates of 42 cents. This was powered in large part by 18% growth in the company’s digital sales.
The company reported significant progress in its Madden NFL Mobile and Star Wars: Galaxy of Heroes games, including usage of two-plus hours per day for the latter. Sales for Star Wars Battlefront were also robust.
EA shares were booming 7.7% higher in Wednesday’s action.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.
