Tuesday, October 25, 2016

Lower markets on unsatisfactory earnings

Dow declined 53, decliners over advancers 3-2 & NAZ fell 26.  The MLP index lost 4+ to the 309s & the REIT index was off 1 to the 342s.  Junk bond funds were barely higher & Treasuries were up a little bit.  Oil dropped under 50 & gold climbed higher.

AMJ (Alerian MLP Index tracking fund)

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Live 24 hours gold chart [Kitco Inc.]

Caterpillar, a Dow stock, reported a sharply lower Q3 profit after global economic weakness & an abundance of available used equipment slowed sales of its new machinery.  The world's largest construction & mining equipment maker also lowered its full-year revenue outlook for the 2nd time.  It now expects about $39B, down from $40.-40.5B.  The company expects its challenges to persist into next year, CEO Doug Oberhelman said.  "In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, and around the world there are a significant number of idle mining trucks," he added.  CAT forecast 2016 EPS at $2.35 ($3.25 excluding restructuring costs).  The company again raised expectations of 2016 restructuring costs, to $800M from a previous estimate of $700M.  Q3 EPS was 48¢, down from a revised 94¢, a year earlier.  Excluding restructuring costs, EPS was 85¢.  The stock lost 1.51.  If you would like to learn more about CAT, click on this link:   

Caterpillar posts lower earnings, cuts 2016 outlook

3M Company (CAT)

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Procter & Gamble, a Dow stock & DIvidend Aristocrat, fiscal Q1 results beat the estimate as it controlled expenses & saw solid sales growth in its health care segment.  PG has been working on transforming its business to better focus on bigger brands with growth potential. The company has already shed some of the smaller brands it says collectively contribute little to its operating profit.  CEO David Taylor said that the company is "now focusing all our efforts on 10 large, structurally attractive categories where P&G holds leading positions."  EPS was 96¢, ahead of 91¢ a year earlier.  EPS, adjusted to account for discontinued operations & restructuring costs, were $1.03, topping the 98¢ forecast.  Revenue was basically flat at $16.52B.  Analysts expected revenue of $16.45 B.  Sales for the health care unit climbed 4%, while sales for the fabric & home care division edged up 1%.  For fiscal 2017, PG still expects adjusted EPS growth of mid-single digits compared with fiscal 2016's EPS of $3.67.  Analysts predict EPS of $3.88.  The stock went up 2.87.  If you would like to learn more about PG, click on this link:


Procter & Gamble's 1Q performance tops Street's view

Procter & Gamble (PG)

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3M, a Dow stock & Dividend Aristocrat, trimmed its full-year revenue & earnings forecasts for the 2nd time as it struggles with slowing sales in emerging markets.  MMM now expected revenue to be flat for the year, excluding the effect of currency changes.  The company had previously estimated revenue to be flat to up 1%.  Slowing growth in emerging markets, including China & a strong $ have hurt the company, which gets nearly 2/3 of its revenue from outside the US.  Organic local-currency sales in Asia Pacific fell 2.2% in Q3, the most among its geographic regions.  The company projected full-year EPS of $8.15-8.20, scaling back from its previous forecast of $8.15-8.30.  Analysts had expected 2016 EPS of $8.22 on revenue $30.16.  EPS attributable to the company rose to $2.15 in Q3, from $2.05 a year earlier.  Net sales were flat at $7.71B.  The stock slumped 5.04 (3%).  If you would like to learn more about MMM, click on this link:   

3M Trims Forecasts For Second Time, Shares Fall

3M Company (MMM)

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Earnings are not inspiring confidence in investors.  The strong $ hurts the multi nationals & sluggish business just about everywhere hurts more.  It's that simple.  Lingering worries about a rate hike is another problem for investors who have not known pain in almost a decade.  Of he 3 earnings report above, CAT is the most worrisome because it gets revenue frpom other companies,  That represents pain with a big "P."  After the first hour, the Dow fell & was not able to recover for the rest of the day.

Dow Jones Industrials

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