Earnings season picked up speed, with more than a dozen major corporates reporting quarterly results before the bell. All eyes are now fixed on Apple, after the tech giant reported a blow out quarter.First, the scoreboard:
Dow: 12,675.75, -33.1, -0.3%
S&P 500: 1,314.63, -1.7, -0.1%
NASDAQ: 2,786.64, +2.5, +0.1%
And now, the top stories:
- Earnings dominated headlines before the opening, with five Dow components reporting. DuPont kicked off the day at 6:00 a.m. The company beat analyst earnings expectations, even as fourth quarter earnings dropped year-on-year to $0.35. Net revenue improved 14% to $8.4 billion as the company’s Performance Chemicals and Agriculture business lines did well.
- McDonald’s was the real winner of the day, reporting strong fourth quarter results, with revenue surging 10% to $6.8 billion. Earnings increased to $1.38 billion, or $1.33 per share. Comparable store sales increased 14% during the quarter and 14% for the full-year, with Europe up 15% and Asia Pacific, Middle East and Africa comps gaining 27% over 2011. However, shares were still off 2.5%.
- The losers: travellers and Verizon Communications. Operating income missed expectations slightly at the insurance giant, coming in at $1.48 verse estimates for $1.52 per share, while revenues grew 1% year-on-year to $6.4 billion. Meanwhile, Verizon Communications saw EPS results in line with estimates. However, the company’s margins were hampered by the increased costs to sell the iPhone. The company reported earnings per share of $0.52, when excluding one-time items, with top line results up 7% to $28.4 billion.
- After the opening bell, when earnings announcements finished for the morning, the International Monetary Fund cut its global GDP forecast for 2012 and 2013, to 3.3% and 3.9%, respectively. Earlier, 2012 and 2013 were forecast to grow 4.0% and 4.5%, respectively. Even rapidly developing countries like China and India were hit by 50 basis reductions, or more.
- However, there was some good news in the IMF growth downgrades: U.S. growth was left unchanged at 1.8%.
- At the Bloomberg Link Sovereign Debt Conference, John Chambers, Managing Director and Chairman of the Sovereign Ratings Committee at Standard & Poor’s, said that a Greek default was likelybut could go much smoother than many economists predict. 6 TOP ECONOMISTS ANSWER: Is The Euro Crisis Over? And If Not, What’s Next?
- Elsewhere in Europe, the Council of the European Union announced that it could suspend all cohesion fund payments to Hungary, as structural economic issues prevent it from meeting debt-to-GDP requirements of 3%. Fund payments for the entire region, were expected to total some €45.1 billion in 2012.
- A lawsuit between billionaire and millionaire former best friends, Donald Drapkin and Ronald Perelman, moved forward this afternoon, after a jury was chosen in the $20 million trial.
- Morgan Stanley named its next managing director class, promoting 210 employees. The news comes as the firm announced it was changing compensation practices. Click here for the full list of promotions >
- Meanwhile, Bank of America announced it would be cutting investment banker pay by as much as 25%. The news comes as it begins to dive deeper into the second phase of its New BAC, it’s plan to cut costs.
- Ticonderoga Securities, a 75-person broker-dealer, will shut down by week’s end after it failed to raise capital. Layoffs will begin at locations in New York, Virginia, and California, as the now illiquid firm closes its doors.
- President Obama invited invited Warren Buffett’s secretary to the State of the Union this evening, to make a point about the country’s tax code. Debbie Bosanek, Buffett’s secretary, will sit with the First Lady and Dr. Biden. The State of the Union begins at 9 p.m. EST.
- After the bell, Yahoo announced results, with earnings per share topping estimates at $0.25, but revenue falling short, at $1.17 billion. Business Insider is on the call and will update live with commentary.
- But what everyone was really waiting for: Apple blew out its first quarter, posting incredibly strong figures. Net revenue surged $46.3 billion against expectations for $38.8 billion, while EPS topped the $10.07 forecast, at $13.87. Apple sold 7 million more iPhones and 2 million more iPads than analysts expected, at 37.04 million units and 15.4 million units, respectively.