Much of this week��s financial buzz centered around Alcoa��s (NYSE:AA) Q3 earnings report Tuesday — the ��official�� start of earnings season — as well as the quarterly results for a couple major players in the tech and financial sectors, expected to set the pace for the next few weeks as Wall Street shakes out corporate America��s three-month winners and losers.
The aluminum-making earnings bellwether kicked things off on a sour note late Tuesday with a wide miss of expectations, reporting EPS of 15 cents to Wall Street��s 22-cent estimates that sent the stock down as much as 5.5% Wednesday. Alcoa��s report, often also cited as a gauge of numerous economic headwinds, demonstrated a few things — namely, that earnings estimates in general after the past quarter might be too high, and that while China��s economy might be better than thought, Europe��s tanking isn��t being overplayed.
However, AA stock gained back some ground by the end of the trading day and made up most of the rest by the end of the week — and Alcoa actually finished up 5.5% (at $10.26) for the week! The initial drop might have been reactionary, but numerous investors took the opportunity to get a financially sound industry leader at bargain-basement prices.
Financial Sector Blues
JPMorgan Chase (NYSE:JPM) set a poor cadence for financial institutions Thursday despite beating expectations. JPM took a 5% loss on the day and sent its banking brethren to the hurt locker, too. The negativity came not from the earnings, which were $1.02 compared to an expected 92 cents — but from numerous other pieces of unwelcome news, including losses from several fee sources, lawsuits over bad mortgages and an expected $300 million drop in debit card fees in Q4.
Still, JPMorgan remains a highly profitable company that��s a more attractive investment opportunity than some of its other peers. And a! lthough JPM took a post-earnings hit, the losses were buffered by a buildup heading into Thursday, and JPM also finished the week for the better, up almost 4% to $31.89.
Finally, Good Earnings News
However, not all earnings reports this week were frowny faces and wilted flowers. Google (NASDAQ:GOOG) — citing massive increases in paid clicks and in its mobile business, as well as 40 million users for its Google+ social network — reported EPS of $9.72 on Thursday, hurdling Wall Street��s expectations by almost 10%.
Google finished Friday at $591.68, which put it up 5.85% for the day and almost 15% for the week. And despite the enormous ramp-up in stock price, GOOG still is reasonably priced. Not to mention the company��s enormous gains came at a generally lousy time for the markets at large, making the case for Google to be considered a tech safe-haven.
BlackBerries Work For 2 Out of 5 Days
Poor Research In Motion (NASDAQ:RIMM). It’s gaining little traction with its new BlackBerry smartphones, the PlayBook has flubbed, and this week it endured another scuff to its tarnished brand when the BlackBerry service endured a three-day outage affecting 70 million users globally and causing scores to renounce their devices.
While the short-term effects on RIMM stock were minimal — it actually finished the week up 1.5% at $23.97 — the long-term damage to the company could be severe. Research In Motion already has numerous superior competitors and several self-made problems, both of which have helped RIMM stock lose more than half its value year to date. Thus, the company was in no position to suffer a massive blow to consumer loyalty.
Three Up
- Halliburton (NYSE:HAL): Up 6.88% ($2.41) to $37.43.
- Baker Hughes (NYSE:BHI): Up 6.16% ($3.29) to $56.67.
- Schlumberger (NYSE:SLB): Up $5.57 ($3.74) to $70.94.
Three Down
- China Unicom (NYSE:CHU): Down 4.16% (83 cents) to $19.12.
- US Airways (NYSE:LCC): Down 4.13% (26 cents) to $6.04.
As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks.
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