Stocks Gain Before the Close
DuPont (DD) posted fourth-quarter earnings of 11 cents a share on sales of $7.3 billion, topping the average analyst estimate of earnings of 7 cents a share on revenue of $7.26 billion. The company said its 2013 outlook for operating earnings is $3.85 to $4.05 a share, an increase of 2% to 7% over the prior year. First half 2013 operating earnings are expected to decline modestly on a year-over-year basis. Shares rose 1.8%.
"DuPont stands stronger today than it did a year ago. Our segments delivered innovation, productivity and integration cost synergies. This, coupled with a record year in new product introductions, has strengthened our market position," said Ellen Kullman, CEO of DuPont. "However, weakness in markets served by Performance Chemicals and Electronics & Communications provided significant challenges in 2012. We've adjusted our plans to meet the changing market environment and grow our businesses in a slow-growth world economy."
Sectors were trading mixed in the broader market. The only decliner was consumer cyclicals. The biggest advancers included basic materials, utilities and transportation.
Volumes totaled 3.54 billion shares on the New York Stock Exchange and 1.78 billion shares on the Nasdaq. Advancers were outpacing decliners by a ratio of 2.3-to-1 on the Big Board and 1.7-to-1 on the Nasdaq.
Google reported income of $2.89 billion, or $8.62 a share on revenue in its core internet business at $12.91 billion. Shares of the search giant were rising more than 4% in the after-hours session. Google lost 0.23% during Tuesday's regular session. Analysts expected the search giant to post fourth-quarter earnings of $10.50 a share on revenue of $12.4 billion.
Kevin Pleines, an equity market analyst at Birinyi Associates, said in a note that Google's comparable headline number will likely be lower than estimates given the sale of the Motorola home division; Pleines referred to the recent comment by Google's treasurer and chief accountant Brent Callinicos that a majority of Wall Street analysts who cover the company have not reflected the business as discontinued operations in their estimates.
Pleines also noted that in looking at historical patterns, Google after a beat has traded higher following the report and continued in that direction into the open. When Google misses the stock tends to gain back ground after-hours following the initial negative reaction.
The next day, from the open to the close, the stock is down 62% of the time regardless of whether Google beats or misses on earnings per share expectations.
Stephen Guilfoyle, chief economist at sarge986.com, said in a morning note that while a there are a bevy of important earnings releases Tuesday morning and afternoon and money can be made in any number of those names, "we all know that the real bets are being placed on Google and IBM(IBM) ," which release their earnings after the close and can be volatile.