Microsoft Helps Lift The Morning

Futures up slightly as Microsoft reported earnings a bit better than expected.


1) Dole Food (DOLE) priced its IPO, 35.7 million shares at $12.50, below the expected price talk of $13-$15 but not bad considering there was a separate announcement of a $300 million convertible offering as well. That deal was also priced at 7 percent.

2) Disappointing Q3 GDP numbers from the U.K. (down 0.4 percent quarter over quarter, worse than the 0.2 percent decline expected) did not curtail stock trading there; the FTSE is up 1.5 percent in the middle of their trading session this morning.

3) Whirlpool up 5 percent as they beat on both top and bottom line. While they did raise their full year guidance (to $4.25 vs prior guidance of $3.50-4.00) and also raised free cash flow guidance (to $500-600 million vs prior $300-400 million), pay attention to the fine print: "Our improved outlook reflects our success in restructuring our business to aggressively align our capacity and resources to lower demand levels." $1.15 vs. $0.77.

4) Credit card companies Capital One and American Express both reported earnings above expectations.

Capital One up 9 percent pre-open, says it expects to see the peak of loan losses "in the next couple of quarters."

AmEx said "overall billings have stabilized" and they see "indications that spending by corporate cardmembers is beginning to pick up."

5) Disk drive maker Western Digital up 3 percent pre-open as they beat on top and bottom line by a wide margin on "unexpectedly robust" demand for its drives; they also guided higher for the current quarter. Inventories remained lean.

6) Honeywell shares are up 2 percent pre-open after the diversified manufacturer saw its Q3 earnings top estimates ($0.80 vs. $0.72 est.). Topline results fell short of expectations, however, with total revenues falling 17 percent. Hefty double-digit declines were seen across each of its segments due to weaker volumes.

For the year, Honeywell reaffirms its previously-lowered guidance of $2.85 vs. $2.78 est.

7) Schlumberger beat estimates ($0.65 vs. $0.63 est.) as continued cost cuts helped. Revenues slid a bit more than expected (down 25 percent) in the quarter. Oil field services revenues plunged 22 percent.

Looking ahead, the oil services giant sees "no significant improvement" in pricing and expects weak natural gas activity through the end of next year. CEO Andrew Gould: "World gas markets are oversupplied and will remain so for some time absent any strong recovery in industrial demand."

8) Agrium is down 5 percent after cutting its Q3 outlook. The fertilizer producer sees earnings falling 90-95 percent from last year's levels of $2.31 per share as potash prices remain weak. The Street is currently expecting EPS of $0.79. Additionally, the company has seen a "slower than expected recovery" in retail crop nutrient margins.



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