The most important earnings comment: GE left guidance unchanged; that is important in what looks like a decelerating global economy. The industrial division had 10 percent organic growth-— very good. GE Capital did well, led by a large profit in real estate (!).
And it was upbeat: "Our industrial outlook remains positive. Margins have stabilized and energy, oil and gas, and transportation performed very well with double-digit profit increases. We are confident in our double-digit (earnings per share) growth expectations for 2012."
That slow or negative revenue growth is one reason the earnings beats are not being greeted with more enthusiasm.
Look at Ingersoll-Rand: It beat, but revenues were light; the stock is trading down even though they raised guidance for the rest of the year (much of it due to a better tax situation and lower shares outstanding). Order growth slowed.
1) Has Palo Alto Networks reinvented the firewall? My colleagues and I from “Squawk on the Street” will be interviewing CEO Mark McLaughlin this morning. Palo Alto Networks (which will trade under symbol "PANW") priced 6.2 million shares at $42, above the revised price talk of $38 to $40 a share, well above the earlier price talk of $34 to $37 a share.
That's a big price move, and it's happening because the company said that it has developed a "game-changing technology for network security" and that it has "completely reinventing the firewall."
That's a very big claim. The company makes a plausible statement: "The enterprise network is under siege." That's true. It used to be that email and web browsing were the only applications. Now there are many more, particularly social networking, not to mention the presence of far more sophisticated criminal gangs.
The company notes that "old" firewalls can only allow or deny an application, but not safely enable the use of an application. Palo Alto Networks claims that its firewall will allow certain portions of the applications to be used, and block other portions.
Here's an example it has used: Say you're a financial firm that is using Facebook to prospect for clients. You might want to allow a financial advisor working for your firm to post something to a prospect's Facebook page, but you would not want the advisor to be chatting with the prospect as it may be construed as financial advice and you would not want the advisor to click on an infected link. With the Palo Alto technology, you can enable a portion of the application (posting), and disable other parts (chatting).
Does it do what it claims? Watch our interview.
2) Diamonds! I just returned from Botswana, and will be showing excerpts today from my upcoming special on the diamond business. Botswana is the world's biggest producer of diamonds, with about 25 percent of global production. At 11:50 a.m. ET, watch as I visit the Jwaneng mine, the world's richest diamond mine, which produces about 10 percent of all the diamonds in the world.
It's hard to imagine how big this mine is ... one of the biggest open holes in the world. It's two miles across, and more than a quarter mile deep ... and getting deeper every day!
By the way, not even the diamond business is exempt from slower global demand. Diamond giant DeBeers today reported diamond sales declined 11 percent in the first half of 2012, from $3.5 billion in the first half of 2011 to $3.1 billion in the first half of 2012.
3) Mixed week for global markets:
S&P 500 +1.5%
—By CNBC’s Bob Pisani
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