Stock Futures Higher After GE Earnings. Stocks to Watch: AAPL, BAC, CMG, GE, MCD, MSFT, RVBD, SNDK, SLB
Published on Friday, 20 April 2012 07:43 Written by Christopher Lynn
New York, April 20th (TradersHuddle.com) – Stock futures were pointing to a higher open after solid earnings from General Electric, an economic bellwether and as European shares climbed after better than expected German business climate data. Uncertainty over the results of the French elections and Spain’s fiscal outlook kept investors with a wary eye towards the euro zone.
In Asia, stocks closed mixed as jittery participants traded cautiously following weak U.S. economic data, which stirred doubts over the strength of the economic recovery in the world’s largest economy. Renewed worries in the euro zone ahead of the first round of the French Presidential election, coupled with Spanish yields rising despite a successful auction weighed on sentiment. In Japan, the Nikkei fell 0.28%, posting its third straight weekly loss. Meanwhile, in China the Shanghai Composite jumped 1.19%, logging its third week of gains, spurred by strength in financials amid expectations of policy easing.
In Europe, markets were trading to the upside as banks rebounded, with French bacnks Societe Generale and BNP Paribas leading the charge following an upgrade from Bank of America Merrill, with the firm citing an attractive valuation. The worries over the uncertainty of the French elections and Spain’s fiscal outlook continued to keep investors on edge; however, the German IFO business climate data came out better than expected and UK retail sales beat expectations by a wide margin, which gave the euro a quick boost and supported the move in equities.
The euro was gaining against the Dollar, trading below the $1.32 level. Crude oil was climbing 0.66% to $102.94 per barrel. Also in the energy complex, natural gas was adding 0.26% to $1.912 per MMBtu. Gold was gaining 0.12% to $1643.40 an ounce, and silver was sliding 0.06% to $31.76 an ounce. Meanwhile, copper was advancing 0.52%.
Today’s Stocks to watch: Apple (NASDAQ: AAPL), Bank of America (NYSE: BAC), Chipotle Mexican Grill (NYSE: CMG), General Electric (NYSE:GE), McDonald’s (NYSE: MCD), Microsoft (NASDAQ: MSFT), Riverbed Technology (NASDAQ: RVBD), SanDisk (NASDAQ: SNDK), and Schlumberger (NYSE: SLB).
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was climbing 0.27% to $607.35 in pre-market after seeing a sharp 3% drop in the prior session amid worries that the tech giant will miss heightened iPhone shipments estimates when it reports its quarterly results last week. Yesterday, Cannacord Genuity raised its target price on Apple to $740, but cut its fiscal 2012 iPhone shipment estimate, while results from Verizon, signaled to some that perhaps iPhone shipments will not meet the heightened expectations. Earlier in the week, Goldman Sachs raised its target price to $750 from $700, and Raymond James initiated coverage with a Strong Buy and a target price of $800. On average, analysts expect a profit of $9.99 per share on revenues of $36.64 billion.
Bank of America (NYSE: BAC) was jumping 1.6% to $8.91 in pre-market, as shares are rebounding from the prior session. Yesterday, the lender posted solid earnings that helped the stock to gapped up but then fall amid concern in the euro zone and weak U.S. economic data. Earnings beat expectations on revenues that were inline with consensus. CEO Brian Moynihan said the mortgage business has reached a bottom and is ready for an upturn.
Chipotle Mexican Grill (NYSE: CMG) was climbing 0.98% to $434.99 in pre-market on reaction to its positive earnings reports. Chipotle said it earned $0.04 per share on revenues that jumped 25.8% to $640.6 million. For the full year 2012, management expects the 155 to 165 new restaurant openings; Mid-single digit comparable restaurant sales growth; and Food inflation of mid-single digits.
General Electric (NYSE:GE), the diversified conglomerate maker of power turbines and medical devices, was climbing 0.68% to $19.27 in pre-market on reaction to its quarterly results. GE beat earnings expectations by $0.01 per share on revenues that fell 8.2% from a year ago period to $35.18 billion.
McDonald’s (NYSE: MCD) was gaining 1.18% to $96.40 in pre-market, rebounding from the 2% drop in the prior session ahead of its quarterly results later this morning. Yesterday, Lazard said that the company would miss earnings expectations. On average analysts expect EPS of $1.23 on revenues of $6.5 billion.
Microsoft (NASDAQ: MSFT), the world’s largest software publisher, will be in focus after jumping more than 3% to $31.97 following positive reaction to an earnings beat. Microsoft said it gained $0.60 per share, $0.02 better than consensus, on revenues that climbed 6% from a year ago period to an above consensus of $17.41 billion. The software publisher lowered its operating expense guidance for 2012, and provided an initial guidance for fiscal 2013. FBR Capital raised its target price to $32 from $30.
Riverbed Technology (NASDAQ: RVBD), the developer and manufacturer of WAN optimization and network traffic measurement products, was plunging 18.77% to $22.63 on reaction to a miss on revenues and downside guidance for the current quarter, seeing EPS of $0.21-0.22 versus consensus of $0.23 on revenues of $193 to $197 million, below consensus of $201.75 million. Cantor Fitzgerald was downgraded the stock to a Hold, while Mizuho cut its rating to a Neutral and slashed its target price to $22 from $38. Oppenheimer downgraded the stock to a Perform from Outperform.
SanDisk (NASDAQ: SNDK), the provider of flash data storage products, was plunging 15.17% to $34.33 in pre-market, trading close to its 52-week low logged last summer, on reaction to the company further disappointed investors with an earnings miss and saying that 2012 revenues will be down from 2011. SanDisk said it earned $0.63 per share, $0.08 worse than consensus, on revenues that fell 6.8% from a year ago period to $1.21 billion. The company cited lower-than-expected pricing and demand weakness in certain segments as the main drivers for the miss; it added that it this market conditions remained in place for the current quarter.
Schlumberger (NYSE: SLB), the provider of oilfield services to the international petroleum industry, will be in focus after reporting that both earnings and revenues were inline with Wall Street’s consensus. The company said it earned $0.98 per share on revenues that jumped 21.7% from a year ago period to $10.61 billion.
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