Here are five things you must know for Friday, July 27:
1. -- Stocks Rise Ahead of GDP Report
U.S. stock futures rose modestly on Friday, July 27, as Wall Street prepared for a report that could show the U.S. economy grew the most in four years during the second quarter.
Economists expect gross domestic product to top a 4% annualized rate in the second quarter compared with the first quarter's 2%. The Commerce Department will release its first official estimate of second-quarter GDP at 8:30 a.m. ET. Consumer sentiment for June at 10 a.m. will round out Friday's U.S. economic calendar.
Contracts tied to the Dow Jones Industrial Average
The Nasdaq fell more than 1% on Thursday, July 26, after social media giant Facebook Inc. (FB) dropped almost 19%, losing $120 billion in market capitalization and earning the dubious record for the worst one-day loss in market value in U.S. stock market history.
Merck & Co. (MRK) posted second-quarter adjusted earnings of $1.06 a share, 3 cents ahead of estimates. Revenue rose to $10.47 billion from $9.93 billion, and beat forecasts of $10.28 billion.
Twitter Inc. (TWTR) shares plunged 14% in premarket trading Friday after the social media company posted solid second-quarter earnings and a robust outlook, but noted that changes to its content rules meant fewer people were using the microblogging website.
Colgate-Palmolive Inc.'s (CL) second-quarter adjusted earnings of 77 cents a share met analysts' forecasts. But sales of $3.87 billion came in below analysts' forecasts. The stock fell 3.5%.
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2. -- Amazon.com's Profit Tops $2 Billion
Amazon.com Inc. rose 4.3% in premarket trading on Friday after the online retailing giant posted second-quarter earnings of $2.5 billion, or $5.07 a share, the first time Amazon topped $2 billion in quarterly profit.
Analysts were looking for earnings of $2.48 a share.
Revenue in the quarter was $52.9 billion, rising from $37.96 billion a year earlier but slightly below analysts' estimates of $53.37 billion. The company said sales growth accelerated in North America, internationally and at Amazon Web Services. AWS revenue rose 49% year over year to $6.11 billion, matching the first-quarter's growth rate and topping a consensus estimate of $5.98 billion.
Amazon said it expects third-quarter operating profit in a range of $1.4 billion to $2.4 billion vs. estimates of $1.28 billion. Revenue in the third quarter is expected at $54 billion to $57.5 billion, which is below consensus of $58.1 billion.
- Amazon Gains After Trouncing Earnings Estimates: 7 Key Takeaways
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"Overall, we think this was another really good quarter for the company," said Cramer and the AAP team. "The revenue miss and soft guidance does raise some red flags about top-line growth, but what impressed us the most is how quickly Amazon can turn up profitability thanks to an increase sales mix towards AWS, subscriptions, and advertising."
3. -- Intel Slides Despite Earnings Beat
Intel Corp. (INTC) fell 6.8% in premarket trading despite an earnings beat in the chipmaker's second quarter.
Intel reported adjusted earnings of $1.04 a share on revenue of $16.96 billion, beating analysts' expectations of 96 cents a share on revenue of $16.76 billion.
According to Intel, the nearly $17 billion in sales during the period was a company record. As a result, the company raised its full-year revenue guidance by about $2 billion to $69.5 billion, and raised adjusted guidance by 30 cents a share to $4.15 a share.
Downsides: The company said data-center revenue in the quarter jumped 27% from a year earlier to $5.5 billion but was below analysts' forecasts of $5.61 billion, and said one of its key next generation chips wouldn't be released until next year.
- Intel Reports Top- and Bottom-Line Beats but Stock Falls
- Intel Slumps After Next Generation Chip Delay Sours Solid Earnings
4. -- Sales at Starbucks Rise 11%
Starbucks Corp. (SBUX) earned 62 cents a share on an adjusted basis in its fiscal third quarter, 1 cent above Wall Street estimates. The stock fell slightly in premarket trading on Friday.
Sales at the coffee retailer rose 11% to $6.31 billion from $5.66 billion a year earlier. Analysts were looking for sales of $6.26 billion. Global comparable-store sales rose 1%, meeting estimates.
- Starbucks Earnings Reveal a Company in Transition
- Starbucks Earnings Were Like an Ice Cold Frappuccino
The company lowered its expectations for fiscal global same-store sales growth to just below 3%, from its previous estimate of 3% to 5%. Watch a quick analysis of the quarter below.
5. -- Chipotle Tops Profit Forecasts
Chipotle Mexican Grill Inc. (CMG) jumped 6.1% in premarket trading on Friday after the better burrito chain reported second-quarter earnings that topped expectations.
Revenue rose 8.3% to $1.27 billion while comparable-restaurant sales in the quarter rose 3.3%.
Meanwhile, new Chipotle CEO Brian Niccol, the former Taco Bell chief who took over in March, told TheStreet his company would soon begin piloting a "late-night" menu, serving up $2 tacos and a drink after 8 p.m.
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