From Briefing.com: Weekly Recap - Week ending 21-Jan-11Most of the major indices fell during the holiday-shortened week, with the S&P 500 declining 0.8% as earnings came in mixed and concerns increased that China will raise interest rates.
The 10 sectors showed mixed results, with three settling lower, four showing modest gains of 0.2% or less, and three showing stronger gains. Utilities led to the upside, rising 1.1%.
Materials (-3.2%) led to the downside. The sector's decline came after China reported robust GDP growth. That increased fears that the country will need to raise interest rates again to prevent its economy from overheating, forcing commodity prices lower.
Turning to fourth quarter earnings reports, the bulk of major financial firms reported quarterly results this week. Several disappointed investors. Bank of America (BAC, -6.6%) fell after reporting a loss of $0.04 per share, excluding nonrecurring items, missing the consensus estimate of $0.06. Citigroup (C, -4.7%) swung to a profit but missed estimates. However, Goldman Sachs (GS, -5.0%), Wells Fargo (WFC, -0.7%) and Morgan Stanley (MS, +3.6%) all beat expectations.
Outside of financials, General Electric (GE, +4.9%) posted better-than-expected earnings and forecasted increasing profits in the coming years. Meanwhile, IBM (IBM, +3.7%) beat expectations as revenue increased 6.6% y/y. Those earnings helped the Dow (+0.7%) outperform this week.
Tech giant Apple (AAPL, -6.2%) reported another strong quarter as revenue spiked 70.5% y/y, easily surpassing estimates. But news that CEO Steve Jobs is taking an indefinite medical leave limited buying interest in the stock. Google (GOOG, -2.0%) reported strong earnings as revenue increased 28.6% y/y. At the same time, the company said that CEO Eric Schmidt is stepping aside and co-founder Larry Page will take the reins. Mr. Schmidt will still be with the company as executive chairman. On a similar note, Hewlett-Packard (HPQ, +2.1%) implemented a shakeup of its Board. The move follows the controversial decision to fire its previous CEO Mark Hurd.
The body of U.S. economic data continues to paint a picture of recovery, though there was a limited amount of releases. Fewer people filed for unemployment insurance and existing home sales came in well above estimates. The reports failed to have much of an impact on the stock market.
The coming week brings a bevy of earnings reports, including 13 Dow components.
Index Started Week Ended Week Change % Change YTD %
DJIA 11787.38 11871.84 84.46 0.7 2.5
Nasdaq 2755.30 2689.54 -65.76 -2.4 1.4
S&P 500 1293.24 1283.35 -9.89 -0.8 2.0
Russell 2000 807.57 773.18 -34.39 -4.3 -1.3
8:00AM Zoran raises Q4 EPS, rev guidance above consensus (ZRAN) 8.74 : Sees Q4 EPS of ($0.30)-(0.33), ex-items, vs ($0.41) Thomson Reuters consensus and ($0.39)-(0.43) previously; revs $68.8 mln vs $62.12 mln Thomson Reuters consensus and $60-65 mln previously. "We are seeing design momentum beginning to build within DTV and have recently secured two top-tier wins for our SoC and FRC solutions, one of which will be shipping to the European market. Typically, 80 to 90 percent of design wins for products that will ship Q4 2011 and 2012 are awarded in the current design cycle. As we move through this critical cycle, with our new universal platforms addressing the higher-end segments of the DTV market, we are very optimistic that our ongoing designs for customers will translate into additional top-tier design wins."
10:56 am GE Reports Strong Q4; Guides FY11 Revs Above Estimates (GE)
General Electric (GE 19.42 +0.99) reported fourth quarter earnings of $0.36 per share, $0.04 better than the consensus of $0.32.
Revenues rose 0.8% year-over-year to $41.4 billion vs the $39.9 billion consensus.
On the conference call the company issued FY11 guidance seeing total revenues of +0-5%, which calculates to $150.2-157.7 billion, well above the $144.3 billion consensus
The company "Industrial segment revenue was up 4%, with Industrial organic growth of 6%. Fourth quarter orders grew 12% year-over-year, with a 20% increase in equipment and a 5% expansion in services. Overall orders in Energy Infrastructure grew 4%. Total company backlog in the quarter increased $3.1 billion to a record $175 billion.
Within the GE Capital segment, Q4 net income of $1.1 billion was up $1.0 billion from a year ago, with volume growing 30% in the quarter. Losses and impairments declined $0.3 billion from the third quarter of 2010 to $2.5 billion, and the company saw improvement in delinquencies across the businesses.
Cash generated from GE Industrial operating activities totaled $4.6 billion in the quarter and $14.7 billion for the year. At year-end, they had $79 billion of consolidated cash and equivalents. Strong fourth-quarter industrial margins (ex. NBCU) of 17.5%, up 10 basis points year-over-year.
10:38 am AMD CEO Search to Continue (AMD)
Advanced Micro Devices (AMD 7.69 -0.33) reported fourth quarter earnings of $0.14 per share, excluding non-recurring items, $0.03 better than the consensus of $0.11.
Revenues rose 0.2% year-over-year to $1.65 billion modestly above the $1.63 billion consensus.
The company reported gross margin of 45%, which was in-line with the company's preannouncement.
The company issued guidance seeing first quarter revenue to be flat to slightly down quarter-over-quarter, compared to the -5.4% consensus decline.
On the conference call, the interim CEO stated that the CEO search remains underway, but they could not comment much further until it is complete. He highlighted debt reduction from fabless business model, success of Bulldozer chip, and transition to a dual graphics combination platform.
09:39 am GOOG Beats Q4 Expectations; Shakes up Mgmt (GOOG)
Google (GOOG 626.77) reported fourth quarter earnings of $8.75 per share, excluding non-recurring items, $0.66 better than the consensus of $8.09.
Revenues rose 28.6% year-over-year to $6.37 billion above the $6.06 billion consensus. International revenues were up 52% year-over-year.
The company reported third quarter paid clicks increased 18% year-over-year, above the expectations of approximately 15%. The company also reported that costs per click increased 5% year-over-year, in-line with the expectations of roughly 5%. In' rev +52% YoY.
The company also announced management changes. Beginning April 4, Larry Page, Google Co-Founder, will take charge of Google's day-to-day operations as Chief Executive Officer. Sergey Brin, Google Co-Founder, will devote his energy to strategic projects, in particular working on new products. Eric Schmidt will assume the role of Executive Chairman, focusing externally on deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership. Internally, he will continue to act as an advisor to Larry and Sergey. |
