Stocks Fluctuate, Nasdaq Rises in Earnings-Driven Choppiness
New York (July 26) Stocks fluctuated by midday Tuesday as investors digested a wide swath of earnings reports. The S&P 500 was down 0.09%, the Dow Jones Industrial Average slid 0.25%, and the Nasdaq fell 0.1%. Benchmark indexes have bounced from positive to negative for much of the morning.
McDonald's (MCD) was a major drag on the Dow, falling 4.3% after same-store sales missed estimates in the second quarter. The world's largest fast food chain reported quarterly same-store sales growth of 3.1%, lower than an expected 3.6%. Second-quarter earnings of $1.25 a share fell 1% from a year earlier and missed consensus of $1.39.
Verizon (VZ) reported a drop in profit in its recent quarter as an April-May worker strike hit its bottom line. The telecom earned 17 cents a share, sharply lower than $1.04 a year earlier. Adjusted earnings of 94 cents a share came in 2 cents above estimates. Around 36,000 workers were on strike for seven weeks earlier in the year. The stock fell 1.7%.
Caterpillar (CAT) detailed more job cuts and a reduced second-half outlook as demand from the oil industry continues to wither. The machinery maker now expects to earn $3.55 a share, excluding restructuring costs, down from an already-reduced previous forecast of $3.70. "We're not expecting an upturn in important industries like mining, oil and gas and rail to happen this year," CEO Doug Oberhelman said in a statement.
DuPont (DD) added nearly 1% after raising the low end of its full-year profit forecasts. The chemicals producer expects 2016 adjusted earnings between $3.15 and $3.20 a share, up from a prior range of $3.05 to $3.20. The company reported an 8.4% increase in profit in its recent second quarter thanks to lower costs in its agriculture unit.
Eli Lilly (LLY) was flat as sales of newly-released drugs including diabetes drug Trulicity and cancer drug Cyramza helped to fuel volume growth. Revenue rose 8.6% to $5.4 billion, higher than an expected $5.15 billion. Adjusted profit of 86 cents a share was in line with estimates.
BP (BP) fell 1% after second-quarter underlying replacement cost profit of $720 million came in well below analysts' predictions of about $840 million. An improvement in oil prices failed to compensate for weaker earnings from its refining business. Oil and gas production returned to profit, though only a slight one, after a $747 million loss in the first quarter.
United Technologies (UTX) exceeded analysts' estimates on its top- and bottom-lines over the second quarter and raised the low end of its sales and profit forecast for the full year. The aerospace developer earned $1.71 a share, higher than an expected $1.68, while revenue of $14.9 billion topped forecasts by $200 million.
Gilead Sciences (GILD) bested profit estimates in its second quarter, while reporting in-line revenue. The biotech developer earned an adjusted $3.08 a share, 6 cents above forecasts. Sales slid 5.6% from a year earlier to $7.78 billion. Gilead also cut its full-year net product sales outlook to between $29.5 billion and $30.5 billion.
Texas Instruments (TXN) reached a 16-year high on Tuesday after Bank of America issued an upgrade following positive earnings. The chipmaker also offered strong guidance for its current quarter thanks to demand in the automotive and communications industries. Texas Instruments expects current-quarter earnings between 81 cents and 91 cents a share, above consensus of 81 cents.
Anheuser-Busch InBev (BUD) raised its offer for SABMiller (SBMRY) after calls for a sweetened offer given the sharp decline in the pound. The pound has declined by more than 10% since the June 23 U.K. Brexit referendum. AB InBev lifted its offer by 1 pound to 45 pounds a share ($59), valuing the total deal at around 79 billion pounds ($104 billion).
Source: TheStreet
