Updated with earnings from McDonald's, Kimberly-Clark, Schering-Plough, and Philip Morris, and initial jobless claims data
NEW YORK (
) -- Here are the top stock market headlines for the morning of Thursday, Oct. 22, 2009.
Thursday's Earnings Roundup
- AT&T (T) - Get Report reported third-quarter net income of $3.2 billion, or 54 cents a share, unchanged from the year-ago quarter and sequentially. Analysts were looking for a profit of 50 cents a share, according to Thomson Reuters. Revenue totaled $30.9 billion, compared with $31.3 billion in the year-earlier quarter and the consensus target of $30.85 billion. AT&T said it had 3.2 million Apple (AAPL) - Get Report iPhone activations in the quarter, its best-ever total. Nearly 40% of iPhone activations were for subscribers new to AT&T, the company said.
- McDonald's (MCD) - Get Report said it had third-quarter earnings of $1.26 billion, or $1.15 a share, rising from a year ago, topping the Thomson Reuters average estimate. However, revenue slid more than 3% from a year ago to $6.05 billion, disappointing analysts who expected sales to total $6.1 billion.
- Merck (MRK) - Get Report reported third-quarter net income of $3.42 million, or $1.61 a share, more than triple year-ago results. Excluding one-time items, the company said it earned 90 cents in the quarter, topping the Thomson Reuters average estimate of 82 cents a share. Revenue climbed 1.8% from a year ago to $6.05 billion, slightly above the $6 billion consensus target. Looking ahead, Merck reaffirmed its guidance for full-year 2009 of $23.2 billion to $23.7 billion. The company also said it expects adjusted full-year earnings to fall in a range between $3.20 and $3.30 a share, in line with the consensus estimate of $3.23 a share.
- Travelers Companies (TRV) - Get Report reported third-quarter earnings of $935 million, or $1.65 a share, quadrupling earnings in the year-ago quarter. Excluding items, the company had earnings of $1.61 a share, coming in well ahead of the average analyst target of $1.31 a share. Travelers upped its full-year earnings outlook, raising the guidance range to $5.30 to $5.50 a share from the prior estimate of $4.80 to $5.05 a share. Analysts have been expecting profit of $5.28 a share, according to Thomson Reuters. Travelers also raised its quarterly dividend by 10% to 33 cents.
- 3M (MMM) - Get Report said third-quarter earnings fell slightly from a year ago to $957 million, or $1.35 a share, although the company still came in ahead of the average analyst target of $1.17 a share. Revenue also fell from a year ago to $6.19 billion, but also came in ahead of targets.
Thursday's Earnings Roundup
- UPS (UPS) - Get Report said third-quarter earnings slumped to $549 million, or 55 cents a share, from a profit of $970 million, or 96 cents a share, in the year-ago period. Still, earnings topped the Thomson Reuters average estimate of 52 cents a share. Revenue slumped nearly 15% from a year ago to $11.2 billion, in line with the consensus target of $11.17 billion.
- Delta Air Lines (DAL) - Get Report posted a third-quarter net loss of $161 million, or 19 cents a share, widening from a year ago. Excluding items, Delta earned six cents a share in the quarter, compared to consensus estimates for a loss of five cents a share. Revenue rose 32% from a year ago to $7.6 billion, matching estimates. Delta also said it will cut system capacity 3% in 2010.
- Kimberly-Clark (KMB) - Get Report reported third-quarter earnings of $582 million, or $1.40 a share, rising from the year-ago quarter to beat the Thomson Reuters average estimate of $1.13 a share. Revenue slipped 2% to $4.91 billion but that number was also better than analysts had expected.
- Philip Morris (PM) - Get Report said it recorded third-quarter earnings of $1.79 billion, or 93 cents a share, down from the year-earlier quarter but two cents above the Thomson Reuters average estimate. Excluding excises taxes, revenue slid 5.3% to $6.58 billion, but that also beat expectations. Philip Morris also raised its full-year earnings outlook to a range of $3.20 to $3.25 a share from its previous range of $3.10 to $3.20 a share.
- Schering-Plough (SGP) said it had net income of $477 million, 29 cents a share, falling from earnings in the year-ago quarter. Excluding one-time items, the company reported a profit of 40 cents a share, matching the Thomson Reuters average estimate. Revenue increased 2% from a year ago to $4.5 billion, also in line with estimates.
Thursday's Early Headlines
- Jobless Claims On the Rise -- The Labor Department said initial jobless claims rose by 11,000 last week to 531,000 from a revised 520,000, above the consensus. Ian Shepherdson, chief economist with High Frequency Economics, called the number disappointing but argued that last week's rise "does not change the core story, which is that after something of a hiatus in the summer, a clear downward trend in claims has emerged again over the past couple of months."
- Embattled Galleon Group to Close -- The Wall Street Journal reports that hedge-fund giant Galleon Group will close, collapsing amid an insider-trading case. In a letter to employees and investors Wednesday, Galleon co-founder Raj Rajaratnam said the firm will "conduct an orderly wind down" of its funds as it explores "various alternatives for our business" that could allow parts of Galleon to survive, the report said. Rajaratnam is free on $100 million bail after being arrested and hit with criminal securities-fraud charges and civil charges of insider trading.
- Google Suspends IR Firm in Galleon Case -- Google (GOOG) - Get Report has suspended the services of San Francisco-based Market Street Partners, the investor-relations firm allegedly involved in the Galleon Group insider-trading case. Market Street is believed to have tipped off hedge fund traders on Google's earnings in 2007. Google has suspended the services pending completion of an independent investigation, according to reports from Bloomberg and Reuters.
- P&G Reportedly Eyeing Sara Lee Brands -- Bloomberg reports that Procter & Gamble (PG) - Get Report is in talks to buy part of Sara Lee (SLE) international household products unit. P&G is mainly interested in the division's air-care business, which makes Ambi Pur air fresheners, the report said, citing people familiar with the talks. Sara Lee prefers to find one buyer for the entire unit, which also includes insecticide and Kiwi shoe polish, the people said.
- U.S. -- Reuters reports that Moody's Investors Service may strip the United States of its Aaa-rating if it does not reduce its record deficit in the last fiscal year to manageable levels in the next three to four years. "The Aaa rating of the U.S. is not guaranteed," said Steven Hess, Moody's lead analyst for the United States said in an interview with Reuters Television.