Rain on the Parade: Microsoft, Google, Merrill Disappoint
Posted Jul 17, 2008 05:19pm EDT by Aaron Task in Investing, Internet, Banking
Related: MER, MSFT, GOOG, IBM, JPM, XLF, COF
In a near repeat of Wednesday's session, stocks surged Thursday thanks to falling oil prices and better-than-expected results from JPMorgan, Coca-Cola, United Technologies and Nokia.
The Dow jumped 1.9% to 11,447, bringing its two-day gain to over 480 points. The S&P and Nasdaq each rose 1.2% on the session.
But the nascent rally will face a major challenge Friday as post-close results from Merrill Lynch, Microsoft and Google each proved disappointing.
Merrill reported a second-quarter loss of $4.65 billion, or $4.97 a share vs. the consensus for a loss of $1.91. Merrill loss, its fourth consecutive quarterly decline, exceeded the low-end Street estimates of $4.21 per share.
Whether Merrill's loss will stop the two-day rally in financials remains to be seen, but it does take some shine off the recent string of better-than-feared results in the sector - as does the 10-cent shortfall by Capital One Financial. (Next up: Citigroup on Friday.)
On the tech front, Microsoft reported better-than-expected sales of $15.84 billion but its earnings of 46 cents per share were a penny shy of expectations. More importantly, Microsoft issued below-consensus guidance for both its fiscal first quarter and financial year, which stands in sharp contrast to the upbeat outlook from Intel Tuesday night.
Merrill and Microsoft shares were each down more than 5% in recent after-hours trading. Google, meanwhile, was recently down nearly 7% after posting net revenue merely in-line with expectations and earnings of $4.63 per share, far shy of the consensus for $4.74.
The trio of disappointments overshadowed yet another upside surprise from IBM; Big Blue also upped its 2008 earnings guidance but its shares rose only modestly in after-hours trading. |
