Sampling the Earnings Smorgasbord - Analyst Blog
20 Janeiro 2012 - 7:03AM
Zacks
With the economic calendar relatively on the thin side, stocks
will remain focused on another busy day of earnings reports.
Google’s (GOOG) earnings miss potentially raises
doubts about the tech sector’s earnings outlook, but the issue
appears to be mostly company specific. Reports from
Intel (INTC), Microsoft (MSFT)
and IBM (IBM) show continued resilience on the
corporate IT spending front. But with stocks at a six-month high
already, it will likely be difficult today to sustain the upward
drift of recent days.
While earnings reports from the tech giants after the close on
Thursday will likely remain in the spotlight today, a major
earnings report from this morning is from General
Electric (GE), a bellwether for the global economy. The
conglomerate came out with a modest earnings beat on
lower-than-expected top-line results. GE’s industrial businesses
reported strong growth, with infrastructure orders up 15% and
industrial emerging market orders up 26% from the year-earlier
level.
On the tech front, we saw better-than-expected results from
Intel, IBM and Microsoft after the close on Thursday, but Google
came out with a negative surprise. Cost per click, a key metric for
the search giant, saw its first year-over-year decline while the
expectation was for a gain.
The issue appears to be structural and fundamental to the
company’s business and not a result of one-off factors. Had it been
due to one-off factors, management would have described it as such
on the call, but they didn’t. Is the growing popularity of Android
cannibalizing desktop profitability? It is hard to say at this
stage, but it appears to be a big problem for the search giant.
In other earnings reports, we have a solid earnings and revenue
beat from Schlumberger (SLB). Unlike many of its
commercial banking peers, Fifth Third Bancorp
(FITB) came up short of expectations. Sun Trust
Banks (STI), however, came out with a positive
surprise.
Stocks have made steady gains in recent days on the back of
strong economic reports, a not-so-bad corporate earnings picture,
and the absence of fresh negative headlines out of Europe. There is
no reason for this upward drift to stop in the coming days, but
stocks likely lack a catalyst to push them higher today.
FIFTH THIRD BK (FITB): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
INTEL CORP (INTC): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
SCHLUMBERGER LT (SLB): Free Stock Analysis Report
SUNTRUST BKS (STI): Free Stock Analysis Report
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