Markets are preparing for earnings season. Here’s your Cheat Sheet to the hottest stocks of the week.
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Alcoa Inc. (NYSE:AA) The aluminum producer reported its second quarter earnings today, with net income rising to $322 million (28 cents per share) vs. $136 million (13 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter. Revenues also rose 27% to $6.58 billion from the year earlier quarter. The company reported net income from continuing operations of 32 cents per share. This fell short of the mean estimate of 33 cents per share. It beat the average revenue estimate of $6.32 billion. Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.5 percentage points to 20.3% from the year earlier quarter.
Alcoa Chairman and CEO Klaus Kleinfeld spoke to his company’s results, “We turned in another strong quarter, with solid revenue and earnings growth…Although the economic recovery is uneven, the overall outlook for Alcoa – and for aluminum – remains positive,” Kleinfeld said. “Demand for aluminum continues to rise and so does growth in our major markets. These factors support our projection that aluminum demand will grow 12 percent this year and will double by 2020.”
Competitors to Watch: Century Aluminum Company (NASDAQ:CENX), Alumina Limited (NYSE:AWC), Kaiser Aluminum Corp. (NASDAQ:KALU), Noranda Aluminum Holding Corporation (NYSE:NOR), and Aluminum Corp. of China (NYSE:ACH).
Novellus Systems (NASDAQ:NVLS) also announced its second quarter results today. The company develops, manufactures, sells and supports equipment used in the creation of chips and semiconductors. Net income for Novellus rose to $64.7 million (79 cents per share) vs. $63.3 million (66 cents per share) in the same quarter a year earlier, with revenues also up 9% to $350.2 million from the year earlier quarter. The company topped the mean estimate of 76 cents per share. Estimates ranged from 75 cents per share to 79 cents per share. Analysts were expecting revenue of $352.3 million. Revenue has risen the past four quarters. Revenue increased 49.6% to $413.2 million in the first quarter. The figure rose 57.4% in the fourth quarter of the last fiscal year from the year earlier and climbed more than twofold in the third quarter of the last fiscal year from the year-ago quarter
Novellus’ Chairman and Chief Executive Officer Richard S. Hill, noted, “We’re extremely proud to have been voted by our customers as one of the two highest ranked semiconductor capital equipment companies among our peer group in VLSI’s 2010 customer satisfaction survey. We achieved this by focusing on the customer experience and continuously improving the technology, productivity and reliability of our tools…We intend to drive further gains and revenue growth with the emergence of 3D NAND and advanced logic applications, all of which are essential building blocks required to enable the growth in cloud computing and storage.”
Competitors to Watch: Mattson Technology, Inc. (NASDAQ:MTSN), Amtech Systems, Inc. (NASDAQ:ASYS), Applied Materials, Inc. (NASDAQ:AMAT), Axcelis Technologies, Inc. (NASDAQ:ACLS), CVD Equipment Corporation (NASDAQ:CVV), Tegal Corporation (NASDAQ:TGAL), ASM Intl. N.V. (NASDAQ:ASMI), Varian Semiconductor (NASDAQ:VSEA), Lam Research Corporation (NASDAQ:LRCX), and FSI International, Inc. (NASDAQ:FSII).
Citigroup (NYSE:C): The major lender reported its second quarter earnings today to a mixed reception on the street. Net income for the financial services company rose to $3.34 billion ($1.09 per share) vs. $2.7 billion (90 cents per share) in the same quarter a year earlier. This marks a rise of 23.9% from the year earlier quarter. Revenue dipped to $20.62 billion last quarter. The company beat the mean analyst estimate of 96 cents per share. It beat the average revenue estimate of $19.94 billion.
CEO Vikram Pandit noted, “Citi achieved another solid quarter of operating performance as we continue to execute our strategy. We produced growth in both loans and deposits in Citicorp, reduced assets in Citi Holdings, continued to invest in our core businesses, and improved our financial strength. Although the near-term macroeconomic outlook is uneven, Citi is consistently profitable and we remain focused on producing responsible growth by serving our clients.” C stock ended the day down -1.84%.
Competitors to Watch: Bank of America Corp. (NYSE:BAC), JPMorgan Chase & Co. (NYSE:JPM), Wells Fargo & Company (NYSE:WFC), Morgan Stanley (NYSE:MS), Barclays PLC (NYSE:BCS), Goldman Sachs Group, Inc. (NYSE:GS), and U.S. Bancorp (NYSE:USB).
Mattel Inc. (NASDAQ:MAT): The designer and manufacturer of a variety of toys and games for customers and consumers worldwide reported second quarter earnings today. Net income for Mattel, Inc. rose to $80.5 million (23 cents per share) vs. $51.6 million (14 cents per share) in the same quarter a year earlier. This marks a rise of 56.1% from the year earlier quarter. Revenues also rose 14.1% to $1.16 billion from the year earlier quarter. The company beat the mean analyst estimate of 16 cents per share. It beat the average revenue estimate of $1.1 billion.
CEO Robert A. Eckert added, “For the second quarter, I am very pleased with the continued global momentum across our portfolio, including core brand strength as well as the outstanding performance of the CARS 2 entertainment property. Despite the mixed economic news, I am encouraged by our strong operating results and continue to believe we are well-positioned for the all-important second half of the year.” MAT stock closed up 1.87% today.
Genuine Parts Company (NYSE:GPC): The distributor of automotive replacement parts, industrial replacement parts, office products and electrical/electronic materials reported its second quarter earnings today. Net income for the company rose to $151.8 million (96 cents per share) vs. $124.5 million (78 cents per share) in the same quarter a year earlier. This marks a rise of 22% from the year earlier quarter. Revenues also rose 11.9% to $3.18 billion from the year earlier. GPC beat the mean analyst estimate of 89 cents per share. It also beat the average revenue estimate of $3.11 billion. The stock was up 3.59% at closing time today.
CEO added, “We are especially pleased to report record sales and earnings for the second quarter. The Automotive Group produced another period of solid growth, with sales up 9% for the third consecutive quarter. We remain encouraged by the ongoing positive impact of our sales initiatives and the sound fundamentals of the aftermarket. Our Industrial and Electrical businesses continue to produce the strongest growth among our four business segments.”
YUM! Brands Inc. (NYSE:YUM): Stock up over 3.25% after hours as the company reported its results for the second quarter today. Net income for YUM rose to $316 million (65 cents per share) vs. $286 million (59 cents per share) in the same quarter a year earlier, a rise of 10.5% from last year. Revenues for the fast food operator rose 9.4% to $2.82 billion from the year earlier quarter. The company reported adjusted net income of 66 cents per share. By that measure, the company beat the mean estimate of 61 cents per share. Estimates ranged from 58 cents per share to 63 cents per share. It beat the average revenue estimate of $2.7 billion.
CEO David Novak commented, “I’m pleased to report we are raising our full year EPS growth forecast to at least 12% based on the continued strength of our international businesses. We delivered EPS growth of 13% in the second quarter as strong performance in China and other emerging markets, combined with the benefit of a lower tax rate, offset a very disappointing quarter in the U.S..”
Competitors to Watch: McDonald’s Corporation (NYSE:MCD), Wendy’s Arby’s Group Inc. (NYSE:WEN), Papa John’s Int’l, Inc. (NASDAQ:PZZA), Domino’s Pizza, Inc. (NYSE:DPZ), Chipotle Mexican Grill, Inc. (NYSE:CMG), Starbucks Corporation (NASDAQ:SBUX), and Sonic Corporation (NASDAQ:SONC).
Capital One Financial (NYSE:COF): The financial services company, which markets a variety of financial products and services through its banking and non-banking subsidiaries, reported its second quarter earnings today. Net income for Capital One Financial Corporation rose to $911 million ($1.97 per share) vs. $608 million ($1.33 per share) in the same quarter a year earlier. This marks a rise of 49.8% from the year earlier quarter. Revenues for COF in non-interest income rose to $857 million. The company beat the mean analyst estimate of $1.54 per share. Estimates ranged from $1.29 per share to $1.96 per share. COF stock is down -.02% in after hours trades.
CEO Richard D. Fairbank noted, “Our second quarter performance demonstrates that Capital One remains well positioned to continue to deliver attractive and sustainable results, including loan growth, deposit growth, strong returns and robust capital generation. Recently we announced our definitive agreement to acquire ING Direct. This is a game-changing transaction that generates attractive financial results immediately, as well as compelling value creation over time. ING Direct has built a very special franchise – bringing great value and exceptional service to its customers – and we’re committed to continuing that.”
Competitors to Watch: American Express Company (NYSE:AXP), Discover Financial Services (NYSE:DFS), Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp. (NYSE:BAC), Northern Trust Corporation (NASDAQ:NTRS), Wells Fargo & Company (NYSE:WFC), and HSBC Holdings plc (NYSE:HBC).
Marriot International Inc. (NYSE:MAR): The company, which operates and franchises hotels and related lodging facilities throughout the world, reported net income for the second quarter that rose to $135 million (37 cents per share) vs. $119 million (31 cents per share) in the same quarter a year earlier. This marks a rise of 13.4% from the year earlier quarter. Revenues also rose 7% to $2.97 billion from the year earlier quarter. MAR reported in line with the mean analyst estimate of 37 cents per share. It fell short of the average revenue estimate of $3.02 billion.
CEO J.W. Marriott, Jr. commented, “Around the world, we’ve never been more excited about our opportunities. Now in 71 countries, the Marriott International brand portfolio, already the broadest in the industry, is growing rapidly. We expect to add over 200 hotels to our system in 2011, leveraging the hospitality and local one know-how of our associates with our global size, systems, and guest loyalty programs. Emerging markets provide especially attractive opportunities. In the past five years, we have increased our hotel distribution in Brazil, Russia, India and China at a 12 percent compound annual growth rate while tripling our development pipeline in those markets.”
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