Stocks to watch: Apple, Netflix, Caterpillar, Ford
The iPad maker reports disappointing quarterly results, while the heavy machinery maker surprises to the upside.
Apple (AAPL), the iPhone, iPad and iPod maker, missed Wall Street's expectations on the top and bottom lines in the third quarter and issued weak guidance after the markets closed Tuesday. Apple reported third-quarter earnings of $9.32 a share on revenue of $35.02 billion for the three months ended in June. Analysts expected a profit of $10.37 a share on revenue of $37.18 billion. Apple shares were down 4.6% in pre-market trading at last check.
During the earnings conference call, Chief Financial Officer Peter Oppenheimer cited several reasons for the revenue and earnings miss, including economic weakness in Europe, Australia, Canada, and Brazil. He also said consumer speculation about new products was delaying some purchasing and that a delay with Intel's (INTC) Ivy Bridge chips hurt Mac sales in April and May.
For the fourth quarter, Oppenheimer said Apple expects revenue of about $34 billion and earnings of about $7.65 a share. That view is below the current consensus expectations for earnings of $10.23 a share on revenue of $38.03 billion in the quarter ending in September.
Netflix (NFLX) posted second-quarter earnings Tuesday that exceeded Wall Street's expectations, but the company forecast a potential loss in the third and fourth quarters. Netflix reported earnings of $6 million, or 11 cents a share, on revenue of $889.2 million for the three months ended in June. Analysts were expecting earnings of 5 cents a share on revenue of $888.9 million.
The company forecast a third-quarter loss of 10 cents a share to a profit of 14 cents a share on revenue ranging from $890 million to $911 million, but the outlook was somewhat confusing. "Q3 has begun strongly for us, and we expect to be profitable again in Q3. In Q4, we will launch our next international market, which will drive us temporarily back into the red," Netflix said. So not only could Netflix end up reporting a third-quarter loss, it could also end up doing so in the fourth quarter. Netflix stock sank 18% in pre-market trading.
Boeing (BA) reported a second-quarter net income increase of 2.8% to $967 million, or $1.27 a share, from $941 million, or $1.25, in the year-earlier period. Revenue jumped 21% $20.01 billion from $16.54 billion. The aerospace company also lifted its outlook for the year. Analysts expected Boeing to post quarterly earnings of $1.12 a share on revenue of $19.37 a share. Boeing shares climbed 3% in pre-market trading.
Caterpillar (CAT) reported a 67% jump in second-quarter profit to $1.67 billion, or $2.54 per share, compared with $1.02 billion, or $1.52 per share, a year earlier. Revenue rose 21% to $17.37 billion. Analysts expected a profit of $2.28 a share on revenue of $17.11 billion. The maker of heavy machinery also lifted its 2012 profit forecast. CAT shares rose more than 4% in pre-market trading.
Ford (F) said its second-quarter profit fell to $1.04 billion, or 26 cents a share, from $2.4 billion, or 59 cents a share, in the year-ago period. Excluding one-time items, Ford earned 30 cents per share. Revenue fell 6% to $33.3 billion from $35.5 billion in the year-ago period. Analysts expected the automaker to report a profit of 28 cents a share on sales of almost $33 billion. Ford shares traded 1.8% higher in pre-market action.
PepsiCo (PEP) reported a drop of 21% in second-quarter net income to $1.49 billion, or 94 cents a share, from $1.89 billion, or $1.17, in the year-earlier quarter. Adjusted earnings were $1.12 a share. Revenue declined 2.2% to $16.46 billion from $16.83 billion. Analysts expected the soft-drink giant to report earnings of $1.09 a share on revenue of $16.51 billion. PEP shares rose 1% in pre-market trading.
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The company is scrambling to protect its equities arm, which could face declining volume and revenue as competitors close the gap.
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