Weak Revenue Growth Weighs On Afternoon Trading, Continues Sluggish Earnings Season

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During three hours before the opening bell rang this morning, more than a dozen major corporates announced quarterly results, including five Dow Jones Industrial Average components.While most of the companies reporting this morning beat, revenue growth remained weak.

Higher expenses pressured results for the nation’s largest wireless operator, while McDonald’s likely benefitted as consumers traded down.

Here’s what you need to know:

AK Steel (AKS): BEAT — The beleaguered steel manufacturer reported a net loss of $0.26 per share when excluding one-time items, above expectations for a -$0.39 report. However, the company had to book $268 million in pension charges, which pushed full-year results lower. Average steel selling prices increased 5% year-on-year to $1,070 per ton, although that represents an 8% sequential decline.

Coach (COH): BEAT— The entry-luxury company, which has aggressively expanded from a blasé tote company for Stamford housewives to a billion dollar powerhouse over the past decade, saw net income and EPS surge 15% and 18% to $347 million and $1.18 per share, respectively. “We’re also excited about the results we’re achieving in our Men’s business, which is on track to double in FY12, to over $400 million globally,” Coach CEO Lew Frankfort said.

DuPont (DD): BEAT — Dow component DuPont saw fourth quarter earning drop year-on-year to $0.35, but that remained above analyst expectations. Net revenue improved 14% to $8.4 billion. The company’s  Performance Chemicals and Agriculture business lines did well, with revenue up 12% and 8%, respectively. However, sales in Electronics and Communication fell 18% to $630 million, as volume declined 33%.

EMC Corp. (EMC): BEAT — Net income grew 16% year-on-year for the fourth quarter, to $1.07 billion, or $0.49 per share. Revenue grew 26% in both Latin American and Asia Pacific markets. The fourth quarter saw impressive sales out of the company’s VNX unified storage family, which added close to 2,000 new customers.

Harley-Davidson (HOG): BEAT — Harley-Davidson sold 40,359 new motorcycles worldwide, up 10.9% from a year ago as sales in the U.S. improved almost 12%. Revenue also topped $1 billion during the quarter, as EPS beat by a penny. “At retail, we believe the solid improvement in new Harley-Davidson motorcycle sales reflects the strong appeal of our product lineup to a diverse customer base and the great efforts of our dealers, combined with results from our investments in growth opportunities across all regions and improved consumer confidence in the U.S,” CEO Keith Wandell said.

Johnson & Johnson (JNJ): BEAT — The Dow component saw top line results grow nearly 4% to $16.25 billion, in line with expectations. However, EPS offered up the beat at $1.13, four cents above estimates. Global pharmaceutical sales accounted for the gain, up 6.7% to $6.09 billion as Stelara, Zytiga, and Invega posted strong improvements.

KeyCorp (KEY): IN LINE — Results at KeyCorp declined substantially, even as its loan portfolio performed better than in the past. Last year, earnings in the quarter were $0.32 — this year, $0.21. Total underwriting jumped 24% over the year, to $36.6 billion, from $29.5 billion in 2010.

Kimberly-Clark (KMB): MISS — Organic sales rose a meager 3% during the fiscal fourth quarter, sending adjusted-earnings up 7% to $1.28 per share. However, that missed estimates by two cents. Kimberly-Clark’s largest division, personal care, saws sales increase 2%, while consumer tissue was flat. Sales growth in personal care was driven by Latin America, Asia and Africa, while sales in North America fell 5%. 

McDonald’s (MCD): BEAT — The fast food giant reported 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.

travellers (TRV): MISS — Operating income missed expectations slightly for the insurance giant and Dow component, coming in at $1.48 verse estimates for $1.52 per share. Revenues grew 1% year-on-year to $6.4 billion and travellers was able to push through higher prices to consumers across all of its divisions. The company expects underwriting margins to increase in 2012. “Since the second half of 2010, in response to what we then perceived as the potential for continued severe weather in the United States as well as the outlook for a persistent low interest rate environment, our strategy has been to selectively but actively increase prices,” travellers’ CEO Jay Fishman said. “Results this quarter continue to demonstrate success.”

Verizon Communications (VZ): IN LINE — Verizon saw earnings slide as increased costs to sell the iPhone weighed on the company’s wireless division. The company reported earnings per share of $0.52, when excluding one-time items, with top line results up 7% to $28.4 billion. Wireless churn continued to improve, and the company saw smartphones account for 70.3% of sales during the quarter. Verizon added 201,000 FiOS Internet and 194,000 FiOS Video subscribers during the quarter. The company also booked a $3.4 billion pension charge during the quarter, which pushed GAAP results negative. 

After the closing bell, another dozen major companies will report, including Apple. Click here to see what analysts are forecasting >