Stock Futures Lower Ahead of GDP Data. Stocks to Watch: AMZN, AAPL, CSTR, CMCSA, EXPE, GT, LYB, MRK, VRSN
Published on Friday, 26 October 2012 07:27 Written by Christopher Lynn
New York, October 26th (TradersHuddle.com) – Stock futures were pointing to a lower open amid weak overseas performance and another batch of earnings reports. Participants were cautious ahead of GDP data in the U.S. and after earnings misses by Apple and Amazon weighed on investor confidence.
In Asia, most stocks fell sharply amid concern over corporate results, with exporters in the region struggling against soft global demand. The Nikkei lost 1.35%, declining from a four-week high on concern Chinese funds may face heavy redemptions after reports of poor quarterly earnings, meanwhile the Shanghai Composite dropped 1.7%, closing at a three-week low amid reports of money managers being pessimistic for the fourth quarter.
In Europe, markets were trading to the downside, joining the risk aversion trade amid earnings fears and ahead of U.S. economic data. S&P cut economic risk score by a notch, stating that the economy is relatively stable but banks have moderate exposure to a more protracted recession in the region. Yesterday, EU officials said that Greece would need another 30 billion euros to make up for its delay in hitting deficit targets amid the deep recession in the country.
The euro was losing against the Dollar, trading below the $1.30 level. Crude oil was dropping 0.72% to $85.43 per barrel. Also in the energy complex, natural gas was falling 0.64% to $3.412 per MMBtu. Gold was declining 0.40% $1706.20 an ounce, and silver was slumping 0.87% to $31.80 an ounce; meanwhile copper was retreating 0.49%.
On economic news, at 8:30 am the government will release its reading on third quarter GDP and at 9:55 am, the final reading on October University of Michigan Consumer Sentiment will be available.
Today’s Stocks to watch: Amazon.com (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Coinstar (NASDAQ: CSTR), Comcast (NASDAQ: CMCSA), Expedia (NASDAQ: EXPE), Goodyear (NYSE: GT), LyondellBasell (NYSE: LYB), Merck (NYSE: MRK), and Verisign (NASDAQ: VRSN).
Amazon.com (NASDAQ: AMZN), the largest online retailer, was falling 0.90% in pre-market after it reported its quarterly results, which showed a loss and missed revenue expectations, while issuing downside guidance for the current quarter. The Internet retailer reported a loss of $0.23 per share, excluding a $0.37 loss due to LivingSocial. Revenue jumped 26.9% from a year ago to $13.81 billion versus consensus of $13.91 billion. For the current quarter, Amazon sees revenue on a range of $20.25 to $22.75 billion versus consensus of $22.85 billion.
Apple (NASDAQ: AAPL), the maker of iPads and iPhones, was trading near the unchanged line at the $609 level after the company delivered a rare earnings miss. Apple reported a profit of $8.67 per share, $0.08 worse than consensus, on revenue that jumped 27.2% from a year ago to $35.97 billion versus consensus of $35.78 billion. The stock tested its 200day moving average at $585 initially after the results in after hours but bounced back sharply to trade flat. The tech giant said that its sold 26.9 million iPhones in the quarter versus expectations of 25 million; it sold 14 million iPads versus expectations of 17 million, while selling 4.9 million Macs versus expectations of 5 million. Earlier in the week, Apple unveiled a new iPad mini and a new version iPad in hopes of capitalizing on the holiday shopping season and expand its dominance in the tablet market.
Coinstar (NASDAQ: CSTR), the owner and operator of the redbox DVD rental kiosks chain, plunged more than 8% to $39.50 in after hours following the release of its quarterly results. The company saw its earnings fall to $1.14 per share, $0.03 worse than consensus, on revenue that jumped 17.9% from a year ago to $537.5 million versus consensus of $561.36 million. Adding to the downward pressure, Coinstar issued downside guidance for the current quarter and for the full year. The stock was upgraded to a Buy from Neutral at Compass Point, however the firm lowered its target price to $50 from $55.
Comcast (NASDAQ: CMCSA), the cable services provider and owner of NBC Universal, was climbing 1.2% in pre-market after the company reported better than expected results. Comcast said it earned $0.78 per share, $0.32 better than consensus, on revenue that jumped 15.6% from a year ago to $16.54 billion versus consensus of $16.1 billion.
Expedia (NASDAQ: EXPE), the owner of Expedia.com and Hotels.com, was surging 14.75% to $58.81 in pre-market after its earnings and revenues handily topped expectations. The company said it earned $1.32 per share, $0.06 better than consensus, on revenues that climbed 17.5% from a year ago period to $1.20 billion versus consensus of $1.17 billion. Expedia said that domestic bookings increased 13% and international bookings increased 27% in the quarter from a year ago. The stock was upgraded to a Buy from Hold at The Benchmark Company.
Goodyear (NYSE: GT), the tire and rubber products manufacturer was slumping 2.4% to $12 in pre-market after weak quarterly results. The company said it earned $0.53 per share, excluding $0.12 in net favorable impacts, $0.07 worse than consensus, on revenue that fell 13.2% from a year ago to $5.26 billion from $5.87 billion. Tire unit volumes totaled 41.8 million, down 12% from 2011, primarily reflecting weaker volumes in Europe. For the current quarter, Goodyear expects tire unit volume to be 3 to 5% below 2011 levels.
LyondellBasell (NYSE: LYB), the chemical maker, will be in focus after it reported better than expected quarterly results, while announcing a special $2.75 per share dividend. The company earned $1.47 per share, $0.04 better than consensus, on revenue that fell 9.9% from a year ago to $11.27 billion versus consensus of $11.11 billion.
Merck (NYSE: MRK), the maker of Singulair and Zocor, will be in focus as the company is set to report its quarterly results later this morning. On average analysts expect a profit of $0.92 per share on revenue of $11.57 billion. The highest earnings estimate is $0.94 per share, while the lowest is $0.89. Last quarter, Merk earned $1.05 per share, 4% above consensus.
Verisign (NASDAQ: VRSN), the Internet infrastructure provider, tumbled 13.5% to $40.28 in after hours, breaking below its 200day moving average at the $42 level, despite the company posting better than expected earnings results. The stock was sold after the company reported a profit of $0.50 per share, $0.01 better than consensus, on revenues that climbed 13.5% from a year ago to $223.5 million, inline with consensus.