The best of the lot so far this week has been InterActiveCorp (IACI) with a nice 10% pop after reporting a huge 27% beat on EPS as well as a 5% beat on revenues for the quarter – stock performance has taken out all-time highs on this report, I’ll be doing some more work in this name. Biogen (BIIB) also fits into the category of a company that took out 52 week highs on the better than expected earnings and revenue report. JDS Uniphase (JDSU) and Green Mountain Coffee Roasters (GMCR) blew out the expectations on the EPS front – stock on the daily front is closer to the lower end of its range, so upward price action is starting from a lower base, consistent improvement and guidance will be needed to get the charts out of their downtrends. Others such as Broadcom (BRCM) and Northrop Grunman (NOC) reported decent beats and performed well.
The largest disappointment was by far Amazon (AMZN), which reported 5% below expectations on the revenue front, despite having grown year over year 34%. Because the operating margins are low for AMZN and because the stock is trading with a high P/E multiple (around 100x), any miss on the top line results in the stock getting punished (right after the report the stock was down almost 10%). A growth stock needs to live up to its reputation of growth.
The oil and gas names have trended to the downside on their reports:, especially the recent leader in market cap ExxonMobil (XOM) (which only slightly beat EPS and Revenue expectations), on the positive front it is amazing to see just a large company grow revenues 15% in the quarter versus the same quarter the previous year. One trend in this sector has been the selling of refineries by the large oil producers.
Two pharmaceutical names, Pfizer (PFE) and Eli Lilly (LLY), which have lost drugs to generic competition resulting in drops in revenues versus the previous year of -4.9% and -2.26% respectively, yet where able to beat the estimates for the quarter. Mercl (MRK) on the other hand was able to grow revenues by less than 2%, despite missing expectation slightly. This sector’s main positives continue to be the dividend yields above 4%.
Next week brings in more earnings reports from various sectors Of interest will be the report from S, a company that only recently has started to beat expectations (over the last 9 Q they have beat only 3 times). Revenues are growing year over year, but EPS are still weighted down by various write downs. The report recently from Radio Shack mentioned weakness in their numbers due to weak sales from Sprint handsets. Here is the list of the names expected to report with corresponding EPS and Revenue expectations:
*DISCLOSURES: No relevant positions
