Futures Point Lower on Earnings. Stocks to Watch: MMM, AAPL, DD, FB, NFLX, STX, TXN, UTX, WDC, YHOO
Published on Tuesday, 23 October 2012 07:10 Written by Christopher Lynn
New York, October 23rd (TradersHuddle.com) – Stock futures were pointing to a lower open amid flurry of mixed earnings reports. Participants were reacting negatively to key corporate results, as it was clear that the sluggish global economy was impacting profits and revenue growth.
In Asia, most stocks fell amid cautious trade following news of a Moody’s downgrade of 5 Spanish regions and as corporate results around the world have been showing the impacts of the global economic slowdown. The Nikkei added 0.04%, logging its seventh straight gain, as a softer yen provided some lift to exporters. Meanwhile, the Shanghai Composite lost 0.86%, as Citigroup cut its growth forecast for China to 7.7% from 7.9%.
In Europe, markets were trading to the downside, most likely pressured following a steady stream of mixed earnings results, spurring concern over the impact of the debt crisis and the sluggish global economy in corporate results. Spain was preparing a new short-term bond sale of 3.5 billion euros after Moody’s cut the credit rating for the Spanish regions of Andalucia, Castilla-La Mancha, Catalunya, Extreemadura, and Murcia due to worsening liquidity positions.
The euro was falling against the Dollar, but trading just above the $1.30 level. Crude oil was losing 0.41% to $89.29 per barrel. Also in the energy complex, natural gas was jumping 0.55% to $3.471 per MMBtu. Gold was sliding 0.64% $1715.30 an ounce, and silver was slumping 1.11% to $31.895 an ounce; meanwhile copper was retreating 1.16%.
Today’s Stocks to watch: 3M Corp. (NYSE: MMM), Apple (NASDAQ: AAPL), DuPont (NYSE: DD), Facebook (NASDAQ: FB), Netflix (NASDAQ: NFLX), Seagate Technology (NASDAQ: STX) Texas Instruments (NASDAQ: TXN), United Technologies (NYSE: UTX), Western Digital (NASDAQ: WDC), and Yahoo! (NASDAQ: YHOO).
3M Corp. (NYSE: MMM), the maker of Post-It notes and Scotch tape, will be in focus as it reports its quarterly results later this morning. On average analysts expect a profit of $1.65 per share on revenue of $7.63 billion. The highest earnings estimate is $1.70 per share, while the lowest is $1.61. Last quarter, 3M earned $1.66 per share, 0.6% above consensus.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was losing 0.63% to $630 in pre-market, giving back some of its 4% jump from the prior session. The slide in pre-market came ahead of the company’s scheduled event for 1 pm eastern, in which it will unveil the new iPad mini, as the tech giant looks to consolidate its tablet market dominance. According to reports, the smaller iPad is expected to retail in the U.S. for $329. Yesterday, Goldman Sachs reiterated its Buy rating and target price of $810 per share, while Topeka Capital raised its estimates on the company.
DuPont (NYSE: DD), the life sciences company and third largest U.S. chemical maker, was tumbling 4% to $47.76 in pre-market after its quarterly results fell short of expectations, as sales for pigment sales declined. Profit for the for the quarter fell compared to a year ago, as the company announced plans to lay off 1,500 workers in the next 12 to 18 months. Additionally, DuPont lowered its full year earnings guidance. The company earned $0.44 per share, excluding non-recurring items, $0.05 worse than consensus, on revenue that fell 11.6% from a year earlier to $7.34 billion versus consensus of $8.17 billion.
Facebook (NASDAQ: FB), the social media giant, was gaining 0.67% to $19.45 in pre-market, extending its prior session gain of 1.7% amid Yahoo earnings and ahead of its own quarterly results after the closing bell. The report would be the second after its IPO, but results would be likely under pressure, as most of its new revenue enhancement opportunities to counter the switch to mobile would have little impact this quarter. The key is the outlook and the color of how these initiatives are performing. On average analysts expect a profit of $0.11 per share on revenue of $1.23 billion. The highest earnings estimate is $0.13 per share, while the lowest is $0.08. Last quarter, Facebook earned $0.12 per share, inline with consensus.
Netflix (NASDAQ: NFLX), the online video rental subscription service, will be in focus after jumping more than 4% in the prior session ahead of the company reporting its quarterly results after the closing bell. On average analysts expect a profit of $0.04 per share on revenue of $904.9 million. The highest earnings estimate is $0.14 per share, while the lowest is a loss of $0.07. Last quarter, Netflix earned $0.11 per share, 120% above consensus. Late on Friday, Citigroup reiterated its Buy rating and target price of $120, citing increased user satisfaction levels and increasing lead on unique visitors each quarter.
Texas Instruments (NASDAQ: TXN), the maker of digital signal processing (DSP) and microcontroller (MCU) semiconductors, was sliding 0.5% in pre-market after its quarterly results topped consensus, while issuing downside guidance for fiscal fourth quarter. The chipmaker earned $0.52 per share, $0.06 better than consensus, on revenue that fell 2.2% from a year ago to $3.39 billion versus consensus of $3.34 billion. TI said that EPS in the fourth quarter would be negatively impacted by about $0.06 from manufacturing and restructuring charges. The company believes the slowdown in its business is due to poor demand rather than inventory adjustments.
United Technologies (NYSE: UTX), the maker of Otis elevators and Carrier air conditioning systems, will be in focus after its earnings beat expectations handsomely, but its revenue fell short of consensus. The company also reaffirmed its full year earnings guidance, but lowered its revenue guidance for full year 2012. United Technologies earned $1.37 per share, $0.20 better than consensus, on revenue that climbed 5.7% from a year ago to $15.04 billion versus consensus of $15.55 billion.
Western Digital (NASDAQ: WDC), the maker of hard drives for computers and entertainment systems, was falling 4.5% in pre-market following a disappointing current quarter revenue outlook. The company posted quarterly results that beat consensus, but its guidance spooked investors. Western Digital earned $2.36 per share, $0.07 better than consensus, on revenue of $4.04 billion. Rival Seagate Technology (NASDAQ: STX) was sliding 4.7% in pre-market.
Yahoo! (NASDAQ: YHOO), the Internet media company that owns the second largest search engine, was jumping 2.7% to $16.20 in pre-market after beating earnings expectations on revenue that was inline with consensus. The company earned $0.35 per share, $0.09 better than consensus, on revenue that climbed 1.6% from a year ago to $1.09 billion versus consensus of $1.08 billion. Display revenue was flat, while search revenue climbed 11% from a year ago. The stock was upgraded to a Positive from Neutral at Susquehanna.
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