Mixed Earnings, Steady Jobless Claims - Analyst Blog
February 02 2012 - 4:19AM
Zacks
Today, investors will be weighing favorable headlines out of
Europe following successful bond auctions in Spain and Italy,
against a mixed earnings picture on the home front as a number of
major companies came out with underwhelming results. And in the
run-up to tomorrow’s January non-farm payroll report, we got a
better-than-expected Initial Jobless Claims reading, highlighting
the steadily improving labor market trend.
Initial Jobless Claims dropped a better-than-expected 12K last week
to 367K. The four-week average, which smooths out the week-to-week
fluctuation, dropped by 2K to 375.8K, maintaining its downtrend of
recent weeks. This key data series witnessed some sharp volatility
in recent weeks, but appears to be back on its downtrend. The
favorable jobless claims reading today is welcome, but everybody’s
focus is on Friday’s government jobs report, which is expected to
show gains of about 130K in January.
This morning’s earnings reports present a mixed picture, with
numerous negative surprises from major companies offsetting the
strong reports. On the positive side,
Cummins (CMI) handily beat earnings and revenue
expectations and reaffirmed guidance. Cereal maker
Kellogg (K) also came ahead of EPS and revenue
expectations. Drug maker Merck (MRK) beat EPS
expectations, but came short on the revenue side.
We also have weaker-than-expected results from Dow
Chemicals (DOW), with the nation’s largest chemicals
company citing inventory de-stocking and weakness offsetting
continued strength in emerging markets and a rebound in the U.S.
International Paper (IP) also missed EPS and
revenue expectations on weakness in its printing paper unit.
Ambercrombie & Fitch (ANF) issued a negative
pre-announcement, citing weak sales and subsequent markdowns
weighing heavily on margins. Peer specialty retailer
Ann (ANN), previously known as Ann Taylor, also
issued a similar negative pre-announcement.
Chipotle Mexican Grill (CMG) modestly came short
of earnings expectations after the close on Wednesday as high input
costs offset better-than-expected top-line gains and double-digit
same-store growth. Qualcomm (QCOM) handily beat
expectations and raised its outlook on the back of resilient demand
for the company’s chips in the smartphone space.
ABERCROMBIE (ANF): Free Stock Analysis Report
ANN INC (ANN): Free Stock Analysis Report
CHIPOTLE MEXICN (CMG): Free Stock Analysis Report
CUMMINS INC (CMI): Free Stock Analysis Report
DOW CHEMICAL (DOW): Free Stock Analysis Report
INTL PAPER (IP): Free Stock Analysis Report
KELLOGG CO (K): Free Stock Analysis Report
MERCK & CO INC (MRK): Free Stock Analysis Report
QUALCOMM INC (QCOM): Free Stock Analysis Report
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