Trader Talk

Apple, AmEx, UPS Come Through For Market


As suspected the market cares more about Apple's earnings than anything else this morning. However, a number of other important companies came through, with a couple exceptions.

At American Express , investor concerns about a slowdown in card spending and an increase in charge offs did not materialize. One analyst called the results "Shelter in the Storm." AmEx beat on the bottom line, noted a 16% increase increase in spending by cardholders, and said "careful management of loan and investment portfolios alllowed us to maintain strong credit quality that compares favorably to the industry." Provisions for losses were unchanged from a year ago.

UPS was also a relief. Domestic volume increased nearly 1% despite a "lackluster U.S. economy." Asia and Europe both saw double-digit gains in export volume; U.S. was far weaker, up only mid-single digits, but it was still positive. Guidance for the full year remains within the range they had provided earlier in the year and within analyst estimates.

The international strong/U.S. weak mantra was quite evident this morning:
--Whirlpool beat, but noted that the strength was in international and the costs savings generated by the Maytag acquisition. Record raw material and oil-related costs also hurt. North American revenue was down 8% due to weak demand. Europe was up 12%, Latin America up 23%, Asia up 18%. Reaffirmed full year guidance.
--DuPont   beat and noted that strong revenue growth in all segments outside the U.S. "more than offset lower U.S. demand." Sales outside the U.S. were up 11%. DuPont raised its guidance for the full year slightly.

On the negative side:
--Texas Instrumentsgave revenue guidance for the current quarterbelow expectations.
--Target lowered their October comparable store sale guidance from 3-5% to 2-4%., citing "disappointing sales results for the first two weeks of October."
--Coach beat earnings but lowered guidance, saying they are "concerned with recent traffic trends in our North American retail sales reflecting the retail environment..."

You can argue that on the whole this is a mixed morning for earnings, but most on the Street are relieved.

Questions?  Comments?