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The stock market today is down slightly, but two companies are soaring on great earnings and upgraded forecasts.
Along with those two stocks, check out another company that has returned to profitability – but one leading energy company that's sending warning sings.
- Starbucks Corp. (Nasdaq: SBUX) surges on confidence- The Seattle, WA-based company posted a strong fourth-quarter profit, in what its CFO called "clearly the best fourth quarter Starbucks has ever delivered." Starbucks reported net income of $359 million, or 46 cents a share, compared with $358.5 million, or 47 cents a share, in the period a year earlier. For the fiscal year ended Sept. 30 revenue grew 14% to 13.3 billion while earnings grew 10%. Starbucks has been active in promoting items besides coffee, such as tea and energy drinks, while also teaming up with Square and introducing its own single-service coffee machine. "They're really searching for life even beyond coffee," Jack Russo, a St. Louis-based analyst at Edward Jones & Co., told Bloomberg News. "They're trying to diversify the business model a little bit and those different things have all helped U.S. revenue," he said. Investors were pleased by the better-than-expected earnings, but the fact that Starbucks is now forecasting earnings of $2.06 to $2.15 a share, up from an earlier projection of $2.04 to $2.14, is what's really sending the stock higher today. As of noon today SBUX stock was up over 11%.
- Chevron Corp. (NYSE: CVX) earnings fall on lower production- Chevron's third quarter profits declined 33% from a year ago due to lower natural gas and oil production. The second-largest U.S. oil company in market value, behind Exxon Mobil Corp. (NYSE: XOM), stated that a "heavy period of planned oil field maintenance," the effects of Hurricane Isaac and the closing of a California refinery after an August fire all resulted in lower output. For the third-quarter Chevron reported that earnings dropped to $5.25 billion or $2.69 per share, from $7.83 billion or $3.92 per share, a year ago. Adjusting for certain items, Chevron posted EPS of $2.55, compared with analysts' average estimate of $2.83. CVX stock is down 2.15% as of noon.
While Chevron is disappointing investors today, here's one stock that's soaring on earnings and an upgrade:
- Priceline.com Inc. (Nasdaq: PCLN) rises as its European business stabilizes– After the markets closed Thursday, the online travel site reported a 27% increase in net income from the year-earlier quarter. For the third quarter Priceline earned $596.6 million, or $11.66 a share, on revenue of $1.71 billion. Analysts had expected earnings of $10.90 a share and the company's success was due to a pickup in European activity and the belief that the worst may be over for Europe. "Our forecast for the third quarter assumed that macroeconomic conditions will deteriorate further," Daniel Finnegan, Priceline's chief financial officer, said on a call with analysts yesterday. "We were pleasantly surprised to see conditions in Europe stabilize at least for the time being." Analyst Michael Purcell, of Stifel Nicolaus, raised his rating on Priceline from "Buy" to "Hold" and PCLN stock is up close to 11% as of noon.
And finally, don't let this company's profit confuse you about its potential:
- The Washington Post Co. (NYSE: WPO) swings to a profit- The media company, which runs the for-profit Kaplan education and is partly owned by Warren Buffett, reported a profit of $94 million versus a year-ago loss of $6 million. The company was helped by fewer restructuring costs yet its more than 5% gain today is nothing to get excited about. Even though the company beat expectations, its newspaper circulation continues to dwindle and enrollment at its Kaplan University and Kaplan higher education campuses is down 8% from a year ago.
The Dow Jones was down 42 points, or 0.32%, and the S&P 500 was down 2.64 points, or 0.18% as of noon following today's October jobs report. Click here to get the truth beyond the jobs report numbers.
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- Bloomberg News:
Starbucks Jumps as Profit Increases on U.S. Sales Gain