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CNBC ON DIGG

Still Tough On The Topline

Published: Wednesday, 21 Oct 2009 | 9:28 AM ET

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By: Bob Pisani
CNBC Reporter

Great earnings from three big banks, but futures haven't moved. What's up? Traders note that good earnings are being sold because stocks have rallied so much going into earnings season (the S&P 500 is up almost 4 percent this month alone).

Google [GOOG Loading... () ] and Apple [AAPL Loading... () ] are two of the only stocks that have moved up since their earnings announcements.

Still tough on topline: while there are occasional sides of the elusive topline growth, disappointments are still very glaring. Boeing and Altria reported topline below consensus.

Plan Your Earnings Season Here

Bears note that much of the meager topline growth is inventory replenishment, not an increase in demand. Bulls insist topline growth is a 2010 story.

Elsewhere:

1) Wells Fargo [WFC Loading... () ] trading flat on high volume pre-open, reported excellent numbers: $0.56 earnings versus a consensus of $0.37, $22.47 billion in revenues versus a consensus of $21.6 billion, Tier 1 capital 10.6 percent, and Tier 1 common ratio of 5.2 percent.

Analyst Dick Bove said it proves they can grow revenues despite decreasing loan volumes.

The one criticism is a notable increase in non-performing assets: they jumped from 2.28 percent to 3.22 percent quarter over quarter. Net chargeoffs (loans unlikely to be recovered) were $5.1 billion, up from $4.4 billion in the prior quarter.

2) Morgan Stanley [MS Loading... () ] up 2 percent pre-open, also reported good numbers: $0.38 versus a consenus of $0.27, revenues of $8.68 billion versus $7.00 billion consensus, on a turnaround in investment banking.

3) US Bancorp [USB Loading... () ], revs. above expectations, $0.30 versus consensus of $0.27, revenues of $4.25 billion versus consensus of $4.2 billion

4) After yesterday's disappointing September Housing Starts number, the push to extend the first time home buyer tax credit is getting serious.

The National Association of Home Builders (NAHB) and the National Association of Realtors (NAR) took out a full page ad in the WSJ today urging an extension AND expansion of the home buyer tax credit, claiming it will create 350,000 new jobs, inject more than $28 billion into the economy, and generate $12 billion in tax revenue.

CNBC Real Estate Blog - Realty Check
They're getting more ammunition with the crummy mortage application numbers. The Mortgage Bankers Association said applications to purchase homes fell by 7.6 percent, now down 3 weeks in a row and a 10-week low. 30-year mortgage rates are at 5.07 percent, a 4-week high but still

5) Boeing [BA Loading... () ] down 2 percent after its Q3 earnings and revenues missed estimates weighed down by a large $3.5 billion charge related to the delay of its 747-8 Freighter and 787 Dreamliner planes. These expected charged also caused the Dow component to slash its full-year guidance again to $1.35-$1.55 from $4.70-$5.00 vs. $1.53 est.

6) Freeport-McMoran [FCX Loading... () ] earnings topped estimates ($2.07 vs. $1.34 est.) as improved margins helped. Higher gold production (up 130%) and prices (up 14%) offset flat copper production and a 12 percent decline in prices. The miner also reinstated a $0.15 quarterly dividend, which will be paid in February.

7) Altria [MO Loading... () ] is down 1 percent despite topping estimates by a penny on a 20 percent rise in sales. The cigarette maker narrowed its 2009 earnings forecast to $1.74-$1.77 vs. $1.76 est.

8) Brinker [EAT Loading... () ] is down 3 percent after being downgraded to "neutral" at Goldman Sachs. Goldman cites management's reluctance to provide monthly same-store sales commentary" as the reason for the downgrade, as the current uncertainty has "the market thinking the worst."