Schacknow - Today's Brief, Thursday, April 25, 2013

Markets At Standstill As Earnings Season Peaks


Peter Schacknow, Senior Producer, CNBC Breaking News Desk

U.S. stocks are coming off one of their most indecisive sessions of the year ahead of one of the busiest days of earnings season. Both the S&P 500 and the Nasdaq were virtually unchanged yesterday, and virtually all of the Dow's 43 points drop was accounted for by one stock – Procter & Gamble (PG).

This morning's only economic report comes from the Labor Department at 8:30 a.m. ET, as it issues the weekly initial jobless claims report. Economists expect new claims to total 350,000 for the week ending April 20, compared to 325,000 the prior week.

The Energy Department will issue its weekly look at natural gas inventories at 10:30 a.m. ET.

The Treasury will sell $29 billion in 7-year notes, with the results of that sale available shortly after 1 p.m. ET.

This morning's seemingly endless list of earnings reports is topped by Dow components 3M (MMM) and Exxon Mobil (XOM). Also out this morning: Biogen Idec (BIIB), Bristol-Myers Squibb (BMY), Colgate-Palmolive (CL), ConocoPhillips (COP), Dow Chemical (DOW), Dunkin' Brands (DNKN), Harley-Davidson (HOG), Hershey (HSY), Southwest Airlines (LUV), Raytheon (RTN), Stanley Black & Decker (SWK), Safeway (SWY), Time Warner Cable (TWC), and UPS (UPS).

Amazon.com (AMZN) and Starbucks (SBUX) are the after-the-bell earnings headliners, joined by Altera (ALTR), Expedia (EXPE), VeriSign (VRSN), and Wynn Resorts (WYNN), among others.

Qualcomm (QCOM) is among our stocks to watch today, with the chipmaker reporting in-line fiscal second quarter earnings of $1.17 per share. Qualcomm raised its full-year revenue forecast due to escalating smartphone demand, but its full year earnings outlook is short of Street estimates.

Verizon (VZ) is reportedly preparing a $100 billion bid to buy the 45 percent of Verizon Wireless that it doesn't already own, according to Reuters. Verizon has not yet put forth a formal proposal to minority owner Vodafone (VOD).

Chevron (CVX) raised its quarterly dividend by 11.1 percent to $1.00 per share. The higher dividend is payable on June 10 to shareholders of record as of May 17.

Zynga (ZNGA) earned $0.01 per share for the first quarter, compared to analyst forecasts of a $0.03 per share loss. Revenue also exceeded estimates, but the online game maker's second quarter profit and revenue outlook is well below Street consensus. Sales of older games have slowed and its newer offerings have yet to catch on.

Intuit (INTU) has cut its current quarter and full-year outlook following what it terms a "tough" tax season for the maker of the Quicken and TurboTax software packages.

Cheesecake Factory (CAKE) earned $0.47 per share for the first quarter, five cents above estimates, with revenues also beating analyst forecasts. Its outlook for the current quarter is short of Street projections, but so far, investors appear focused on the restaurant chain's solid performance even in the face of winter storms in the Northeast.

F5 Networks (FFIV) earned $1.07 per share for its second quarter, in line with Wall Street estimates, but the network equipment maker's current quarter forecast is below consensus. F5 is seeing weaker demand from both its telecom customers and from the federal government.

Akamai Technologies (AKAM) earned $0.51 per share for the first quarter, excluding certain items, five cents above estimates, with revenues also registering a beat. The internet content delivery provider saw better than expected demand from companies like Facebook, Netflix, and Apple.

Western Digital (WDC) earned $2.10 per share for its third quarter, handily beating estimates of $1.77. The hard disk drive maker benefited from higher demand for internet storage.

Xilinx (XLNX) posted fiscal fourth quarter profit of $0.47 per share, two cents above estimates, though the chipmaker's year over year revenue continues to decline.

Cliffs Natural Resources (CLF) earned $0.60 per share for the first quarter, swamping estimates of $0.34. The mining company did post earnings that were short of expectations, but it also raised its full year sales forecast.

Newmont Mining (NEM) cut its quarterly dividend to $0.35 per share from $0.425 because of the ongoing drop in gold prices.

Regeneron Pharmaceuticals (REGN) will replace MetroPCS (PCS) in the S&P 500 following the close of trading on April 30. MetroPCS is in the process of merging with Deutsche Telekom's T-Mobile USA unit.

Skechers (SKX) has hired BDO as its auditor, replacing KPMG, which resigned after an ex-partner allegedly leaked inside information about the company. The casual shoemaker also projected current quarter net income that is short of Street estimates.