The Great Blue Chip Rush in Earnings

by Louis Navellier | January 23, 2013 10:30 am

While January 8 marked the official start to earnings season[1] and last week brought a handful of surprisingly strong earnings announcements[2], particularly from the financial sector, the real push began Tuesday.

Starting this week, earnings season will kick off in earnest as the world’s largest public companies reveal what they accomplished in the fourth quarter. So now that Wall Street is back in business[3] after Monday’s holiday, let’s start the week on the right foot by getting caught up on today’s earnings.

Johnson & Johnson (NYSE:JNJ[4]) kicked things off with a fourth-quarter earnings announcement that topped estimates. Last quarter, the company incurred significantly lower settlement charges compared with Q4 2011. So net earnings spiked 1,079% year-over-year to $2.57 billion, or 91 cents per share. Excluding the effect of these special items, adjusted earnings came in at $1.19 per share, just topping the consensus estimate of $1.17 per share.

Meanwhile, the company also reported robust sales growth both domestically and abroad—total sales advanced 8% year-over-year to $17.56 billion. This barely missed analyst estimates of $17.67 billion. While consumer product sales remained largely flat, Johnson & Johnson saw stronger growth in its pharmaceuticals and medical devices divisions. Despite the sales miss, shares of JNJ remained flat for much of the trading day.

Verizon (NYSE:VZ[5]), on the other hand, announced a higher-than-expected loss[6] for the fourth quarter due to the lingering effect of Superstorm Sandy as well as higher pension and benefits charges. This quarter’s net loss widened to $4.23 billion, compared with a loss of $2.02 billion in Q4 2011. Adjusted earnings weighed in at 38 cents per share, which missed the 50 cents consensus estimate by 31%.

However, investors took this news in good stride, partially because Verizon did beat analyst sales estimates. Compared with the same quarter last year, operating revenues advanced nearly 6% to $30.05 billion; this topped the $29.83 billion consensus estimate.

Last quarter, Verizon’s Wireless business did particularly well with 2.2 million retail net additions and 8.5% service revenue growth. Shares of VZ also held their ground following the mixed earnings announcement.

That wraps up Tuesday’s big earnings announcements, but there’s plenty more to come.

Today after the bell we get earnings results from the big Apple (NASDAQ:AAPL[7]). Analysts are calling for sales growth of 18% with an earnings growth estimate of (3%). I’ll bring you the news of any surprises on either side of those estimates.

  1. the official start to earnings season:
  2. surprisingly strong earnings announcements:
  3. Wall Street is back in business:
  4. JNJ:
  5. VZ:
  6. announced a higher-than-expected loss:
  7. AAPL:

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