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Friday, October 26, 2012

Schacknow - Today's Primer, October 26, 2012

TODAY'S PRIMER                             
Peter Schacknow, Senior Producer, CNBC Breaking News Desk

    U.S. stocks come off modest Thursday gains which nonetheless leave the major averages a considerable distance from a winning week.  Ahead of the Friday session, the Dow is down 1.8% this week, with the S&P 500 registering a 1.4% loss.

    The week's economic reports conclude with the first reading of third quarter GDP, due out at 8:30am ET.  Economists expect a 1.8% annual growth rate for the U.S. economy in the June through September period, compared with the final second quarter rate of 1.3%.  At 9:55am ET, the University of Michigan's October consumer sentiment index should come in at 83.1, according to consensus forecasts.  That would be identical to the preliminary October reading, and an improvement from September's final 78.3.

    Dow component Merck (MRK) leads this morning's list of corporate earnings reports, with NBCUniversal parent Comcast (CMCSA) also on the docket.  Other companies releasing earnings this morning include Goodyear Tire (GT), Interpublic (IPG), Legg Mason (LM), Moody's (MCO), Newell Rubbermaid (NWL), and Weyerhaeuser (WY).

    Apple (AAPL) leads our list of stocks to watch, with the company falling eight cents short of estimates in reporting fiscal fourth quarter profit of $8.67 per share.  The bigger news in Apple's report was its first quarter forecast, calling for earnings of $11.75 per share compared to analyst estimates of $15.43.   iPad sales were a particular disappointment in the fourth quarter, falling well below analyst forecasts.

    Amazon.com (AMZN) reported its first quarterly loss in nearly a decade, losing $0.23 per share for the third quarter excluding certain items.  That was wider than the eight cent loss expected by Wall Street analysts.  The internet retailer has been spending considerable amounts on its expansion, and is also being negatively impacted by its stake in daily deals company LivingSocial.  Amazon also issued a sales and profit outlook for the current quarter that's shy of Street estimates.

    Deckers Outdoors (DECK) earned $1.18 per share for the third quarter, 14 cents above estimates, but revenues fell well short of Wall Street forecasts.  The footwear maker also lowered its current quarter guidance, as sales of its UGG shoes decline and input costs move higher.

    Expedia (EXPE) reported third quarter profit of $1.32 per share, six cents above estimates.  The operator of the Expedia, Hotwire, and Hotels.com websites has seen strong revenue growth in recent quarters, driven by hotel bookings.

    Coinstar (CSTR) reported third quarter profit of $1.14 per share, one cent below estimates, with revenue also shy of consensus.  The shortfall was largely driven by weaker demand in Coinstar's Redbox DVD rental business.
    KLA-Tencor (KLAC) earned $0.84 per share for its fiscal first quarter, five cents below estimates, with revenue also falling short of analyst forecasts  The semiconductor equipment maker saw both weaker sales and shrinking profit margins during the quarter.

    Varian Medical (VAR) reported fiscal fourth quarter profit of $1.08 per share, five cents above estimates, with revenues also beating consensus.  The medical equipment maker also gave upbeat guidance for the current quarter and the new fiscal year.

    Verisign (VRSN) earned $0.50 per share for the third quarter, one cent above estimates, with revenues essentially in line with forecast.  The internet domain name company saw revenues increase during the quarter along with profit margins.

    Eastman Chemical (EMN) reported third quarter profit of $1.57 per share, 15 cents above estimates, though revenues fell short.  It also raised its full year EPS guidance to $5.30 - $5.40 per share from the previous $5.30, citing expectations of a more stable economy.

    Toyota  ( TM) says it sold 7.4 million vehicles worldwide during the first nine months of this year, up 28% from a year earlier, when its production was affected by Japan’s earthquake and subsequent nuclear disaster.  But investors may be unnerved by a September drop in China sales to about half of last year’s levels.

    Wal-mart (WMT) is planning to open 100 more stores in China over the next three years, adding to the 370 stores already in that country.

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