Wednesday, April 21, 2010

Earnings reports get a lukewarm reception

Dow was down 5, advancers barely ahead of decliners & NAZ fell 8 despite a great report from Apple (AAPL). Banks are down after a strong opening, giving the Financial Index a small loss.


% Change

The Alerian MLP Index began the day higher but has slipped to down a fraction in the 314s. REITs are back in favor, the index is up 2+ to the 206s aiming to take out the 211 yearly high. Junk bond funds inched higher. The yield on the 10-year Treasury bond fell 4 basis points to 3.77%.

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

Oil is doing well but still trading sideways longer term while gold is pretty much flat.

CLM10.NYM...Crude Oil Jun 10...84.37 ...Up 0.52
GCJ10.CMX...Gold Apr 10...1,139.10 ... 0.50

OIL (ETF) --- 1 year

Photo: Bloomberg

AT&T (T), Dow stock, reported higher-than-expected quarterly earnings as strong sales of the Apple iPhone bolstered profitability despite modest overall revenue growth. AT&T saw profits fall to $2.5B from $3.1B a year earlier, due in part to a previously disclosed $1B non-cash charge related to U.S. healthcare reform. Excluding that charge, profits would have been 59¢ per share, higher than the estimates of 54¢. AT&T activated 2.7M iPhones, with 1/3 of those for new customers. Revenue rose only 0.3% from a year earlier to $30.6B. Overall, it added 1.9M wireless subscribers in the qtr, bringing its total to 87M. Speaking of AAPL, it is the 3rd largest company in market value & pushing to overtake #2 Microsoft (MSFT) & #1 Exxon Mobil (XOM), Dow stocks. AT&T was down 22¢ with a 6.4% yield while AAPL rose an amazing 14+ to 258s after profits almost doubled in its Q2 (but it still does not pay a div).

AT&T Sales Trail Projections as Wireless User Gains Slow
Apple Rises to Record After Jobs Vows New Devices

AT&T -- 2 years

Apple --- 2 years

McDonald's (MCD), a Dow stock & Dividend Aristocrat, had profits surge in Q1. Sales at MCD rose around the globe, especially in Europe & Asia where more customers visited its restaurants while US sales climbed slower. In Q1, MCD earned $1 per share beating 87¢ last year. Revenue rose 10% to $5.61B. The performance was better than forecasted, 96¢ per share on revenue of $5.52B. In the US, same store sales rose 1.5% in Q1. However, worldwide sales at restaurants open at least a year grew 4.2%, with Europe climbing 5.2% & Asia/Pacific, the Middle East and Africa were up 5.7%. The stock has done well in the last 6 months & gained 28¢ today.

McDonald's value menu entices customers in 1Q

McDonald's --- 2 years

Photo: Bloomberg

Boeing (BA), Dow stock, reported Q1 profits fell almost 15% with the delivery of fewer aircraft. But it is still on track to delivery the first 787, by year end. BA earned 70¢ per share beating forecasts of 63¢. Revenue fell almost 8% to $15.2B. BA expects revenue of $64-$66B this year. But it reduced its full-year forecast for EPS to $3.50-$3.80, lowered because of a previously announced charge of 20¢ per share related to recently passed health care legislation. It also expects 2011 revenue will be higher as it delivers the 787 & a new version of its 747. Markets liked the news taking the stock up 2.48.

Boeing Profit Tops Estimate; Health Costs Cut Outlook

Boeing --- 2 years

Earnings reports were generally favorable but that is not exciting stock buyers. Greek debt problems drag on taking the € back down to $1.34, its lower area in recent weeks. Goldman Sachs (GS) is putting up a spirited defense trying to convince everybody that its multi millionaires did nothing wrong. Huh?? But Congress wants to hammer away at them. Whatever steam markets had in the early AM is evaporating.

Dow Jones Industrials --- 2 weeks

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