Stocks will likely take a breather today given the mixed
earnings picture emerging from a busy reporting day.
The market reached multi-year highs on Friday, but will likely
need confirmation from the earnings front to build further on those
gains. And the picture emerging from such blue-chip names as
DuPont ( DD ), Johnson
& Johnson ( JNJ ),
Verizon ( VZ ) and
Travelers ( TRV ) this morning may
not be clear enough to help sustain its momentum.DU PONT (EI) DE (DD): Free Stock Analysis
ReportGOOGLE INC-CL A (GOOG): Free Stock Analysis
ReportINTL BUS MACH (IBM): Free Stock Analysis ReportJOHNSON & JOHNS (JNJ): Free Stock Analysis
ReportTRAVELERS COS (TRV): Free Stock Analysis ReportVERIZON COMM (VZ): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Attention now shifts to Google ( GOOG ) and
IBM ( IBM ), which will
report after the close today. Earnings aside, we have
housing-related data on tap for release a little later, and the
Bank of Japan came through with expectations of a higher inflation
target and a new open-ended asset purchase program.
On the positive side in this morning's slew of earnings reports is
the reassuring guidance from DuPont. The chemicals and life
sciences giant suffered a 66% drop in total quarterly earnings in a
tough operating environment, but its EPS came in better than
expected though revenue came short. But even more significant than
the fourth quarter result is the company's guidance for full year
2013, which is better than current consensus expectations.
JNJ also came out with an earnings beat and revenue miss, but its
full-year outlook appears underwhelming. Verizon missed on both the
earnings and revenue sides in a 'noisy' report, with Superstorm
Sandy and pension-related charges.
The scorecard as of this morning shows fourth quarter earnings
reports from 73 S&P 500 companies or 14.6% of the index's total
membership. Total earnings for these companies are up 1% from the
same period last year, with 61.6% beating earnings expectations and
a median surprise of 2.3%. Revenues are up 5.4%, with 56.2% of the
companies coming ahead of top-line expectations with a median
revenue surprise of +0.7%. This is better performance than what
this same group of 73 companies reported in the third
The composite growth rate for the fourth quarter, where we combine
the results of the 73 companies that are out with the 427 still to
come, is for a drop of -0.8% in total earnings and an equivalent
drop on the revenue side. However, if the current pace
outperformance remains in place, the final earnings growth tally
for the quarter should be in the vicinity of +2%.
A lot will depend on how the Tech sector earnings turn out, which
are expected to be down 3.3% from the same period last year. We
will get a better sense of the sector's prospects after seeing
reports from Google and IBM after the bell today.