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3M’s Major Miss; UPS, Southwest Report; Cosmic Concern for Galaxy S4

Dan Berman
Hot Stock Minute

There has been another flurry of earnings reports out this morning. 3M (MMM) marked the quarter with a major miss. Both Exxon Mobile (XOM) and United Parcel Service (UPS) managed to beat on earnings even with disappointing revenues.

Weekly jobless claims have taken another nice drop. The Labor Department says there were 339,000 seasonally adjusted new claims last week, down from 352,000 in the prior week.

A cosmic event is now late in coming: the release of the Samsung Galaxy S4. T-Mobile was supposed to start selling the phone online yesterday, but there have been shipping delays, perhaps due to overwhelming demand. At this point, T-Mobile hopes to have the phones available on Tuesday. AT&T (T) stlll plans to start selling the device on Saturday. Sprint Nextel (S) will also begin selling the S4 that day online, but says the devices may not be available in stores. Verizon (VZ) wasn't planning to roll out the S4 until May 30th, so it's unaffected by the delays.

As for Verizon, reports are resurfacing that the company may try to buy out Vodaphone's stake in Verizon Wireless. This time the reporting comes from Reuters, which says Verizon may be readying a bid. A Verizon spokesman is referring back to a statement issued earlier in the month. At the time the company said it would be interested in buying out Vodaphone's half of the business, but that it has no interest in acquiring Vodaphone itself.


Southwest Airlines (LUV) is poised to open higher after reporting earnings this morning. The airline posted profits of 8-cents a share, beating estimates for 2-cents, but down from 13-cents a year ago. Revenue also exceeded the consensus. The company is warning a shortage of air traffic controllers could hurt it in the coming quarter with the sequester cutbacks. Still, it says bookings for May and June have been solid. Southwest closed at a 52-week high yesterday and is up more than 2% in the premarket.

Zynga (ZNGA) has been down 9% in premarket trading. Shares first dove when the company reported earnings after yesterday's closing bell. Zynga surprised, by swinging to a profit of a penny per share, but revenues slipped nearly 18% missing estimates. The company says it's struggling as older games lose popularity and newer ones fail to find a following the way Farmville did. This has been a wild week for Zynga which had actually been up more than 5% during the regular trading day yesterday. Shares also spiked on Monday amid false reports that the company was being bought out.

While we're talking about videogames, let's look at Microsoft (MSFT) which is about to unveil its next X-box. Shares rose nearly 4% yesterday when the company announced a May 21st event. The climb puts the stock within striking distance of its 52-week high which was set exactly 1-year ago. Shares have been surging since last week when the company reported earnings. Both profits and revenue were up despite lackluster sales of Windows 8.

Last but not least there's The Cheesecake Factory (CAKE), which has been up as much as 9% since reporting earnings after yesterday's closing bell. The restaurant logged earnings of 47-cents a share. That's up 22% from a year ago and beat estimates of 42-cents. Revenue was also higher than expected at $463-million. The company also announced licensing agreements to open three restaurants overseas. It got upgrades from Jeffries, RBC and Susquehanna after the report was released.