Photo: Vishal Somaiya / Flickr
Earnings season got off to an ugly start.First the scoreboard:
Dow: 13,345, -128.5, -0.9 per cent
S&P 500: 1,432, -8.9, -0.6 per cent
NASDAQ: 3,051, -13.2, -0.4 per cent
And now the top stories:
- aluminium giant Alcoa kicked off earnings season by beating analysts’ expectations for Q3 profits. But the big story was their outlook, which they cut. “Alcoa has moderated its 2012 global aluminium demand forecast to 6 per cent, down from 7 per cent, as a slowdown in China slightly impacts the second half outlook,” said the company. One notable area of weakness was China’s demand for heavy trucks & trailers, which is seeing production drop by as much as 21 per cent. Here’s Alcoa’s View Of The Slowing Global Economy In 2 Huge Slides >
- Engine maker Cummins echoed Alcoa’s concern about China’s slowing. “Demand in China has weakened in most end markets and we have also lowered our forecast for global mining revenues,” wrote CEO Tom Linebarger. Cummins will be laying off up to 1,500 employees. SEE ALSO: China Crash 2012 — Here’s Why It’s Finally Happening >
- While the industrial side of China is clearly slowing, the consumer seems to be holding up. Yum! Brands — the parent of KFC, Taco Bell, and Pizza Hut — announced better-than-expected earnings thanks to strength in China. “In China, our category-leading brands and competitive positions are stronger than ever. China system sales grew 22 per cent as we opened 192 new restaurants and delivered same-store sales growth of 6 per cent”
- The consensus continues to expect this to be the ugliest earnings season we’ve seen since the financial crisis. However, in a new note to clients, Goldman Sachs writes that analysts expect profit margins to continue growing through 2014.
- Don’t Miss: GOLDMAN: The 27 Best Stocks With Huge Dividends And Giant Buyback Plans >
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