Few Places to Hide as Many Sectors Slide (NVDA, SPWRA, DIS, JCP, CCO, FNSR)
There were few places to hide today, as stocks, commodities, and precious metals all tumbled on the day. European debt woes, concerns that China would raise rates to fight inflation, and a continued Cisco (CCO) hangover were all contributing factors to today’s poor action. We still think the market will have a solid run into year-end, although after a strong two months, a bit of a near-term pullback is not surprising.
Stocks dropped on the day, led lower by the Nasdaq, which fell -37 points, or -1.5%, to 2,518. The Dow lost -91 points to 11,193, while the S&P slipped -14 points to 1,199. Oil tumbled -$2.93 to $84.88 a barrel, while gold dipped -$37.80 to $1,365.50 an ounce.
On the economic front, the Thompson Reuters/University of Michigan preliminary November consumer confidence reading came in at 69.3 — its highest since June. The reading was up from 67.7 in October, and was slightly better than economists’ expectations for a reading of 69.
In earnings news, NVIDIA (NVDA), a maker of computer graphics cards, earned $84.9 million, or 15 cents per share, in the three months ended October 31st, compared to $107.6 million, or 19 cents per share, in the same period last year. Revenue fell by -7% to $843.9 million. Analysts were looking for 14 cents in EPS on $844 million in revenue. Nvidia expects revenue to rise by 3% to 5% sequentially in the fourth quarter, which in dollar terms would equate to a range of $869.2-$886.2 million. Analysts were looking for $866.1 in fourth-quarter revenue. The stock rose 5.2%. Four Pros held NVIDIA among their top-15 U.S.-listed equity positions from the end of the second quarter, and 699 tickerspy members hold the stock in their portfolios.
Solar panel maker SunPower (SPWRA) slipped by -1.0% after announcing its third-quarter results. The company posted net income of $20.1 million, or 21 cents per share, in the three months ended October 3rd, compared to $19.5 million, or 20 cents per share, in the year-ago period. Excluding certain items, adjusted EPS came to 26 cents per share, which was double the consensus estimate. Revenue grew by 18% to $550.6 million, also topping Wall Street’s $471.7 million expectations. SunPower expects full-year EPS in the range of $1.45-$1.65 on revenue of between $2.15-$2.25 billion. Analysts were looking for $2.15 billion in 2010 revenue.
Walt Disney (DIS) gained 5.1% after offering an upbeat outlook for fiscal 2011. In the company’s fourth quarter ended October 2nd, Disney earned $835 million, or 43 cents per share, compared with $895 million, or 47 cents per share, last year. Excluding certain items, adjusted EPS came to 45 cents — a penny below Wall Street’s expectations. Revenue fell by -1% to $9.7 billion, which was also below the $9.95 billion analyst consensus. Despite the missed expectations, investors focused on remarks from Disney CFO Jay Rasulo, who said current trends are “encouraging,” and “we believe we are positioned to deliver strong results in 2011,” in a conference call with analysts. At the end of Q2, 81 Pros counted Disney in their top-15 U.S.-listed equity holdings, and 831 tickerspy members hold the stock in their portfolios.
J.C. Penney (JCP) saw its shares fall by -3.4% after the department store operator posted results from the three months ended October 30th. For the quarter, Penney earned $44 million, or 19 cents per share, compared to $27 million, or 11 cents per share, a year ago. Revenue grew by less than 1% to $4.19 billion, while same-store sales rose 1.9%. Analysts were looking for 17 cents in EPS on $4.25 billion in revenue. The company expects to earn between 90 cents and $1 per share in the fourth quarter, compared to the 94-cent analyst consensus.
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