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Costco and Yum! Miss on Earnings; Alcoa Beats; FB, LNKD, YELP, NFLX Take Beating

Dan Berman
Hot Stock Minute
Costco and Yum! Miss on Earnings; Alcoa Beats; FB, LNKD, YELP, NFLX Take Beating

Costco (COST) is trading lower after reporting earnings this morning. The discount chain missed estimates on both the top and bottom lines. Costco says it made $1.40 a share when expectations were for $1.46. Revenues were also more than $1-billion short of consensus at $31.77-billion. On the positive side, same-store sales rose 3%, and earnings were up a penny a share from a year ago. Costco shares have risen 11% so far this year.

Yum Brands (YUM) has been down more than 6.5%, also on its earnings. Like Costco, Yum missed estimates, with adjusted earnings of 85-cents a share when expectations were for 93-cents. As for sales, they disappointed, falling on the south side of $3.5-billion. Ongoing weakness in China gets the blame. Yum now says a recovery from a chicken scandal at its KFC restaurants will take longer than previously predicted. Prior to this morning's losses, Yum shares were up 7% year-to-date, meaning at this point shareholders would have seen similar returns if they put their cash in a CD.

Alcoa (AA) is bucking the trend and is up more than 3.5% on its earnings. Alcoa did in fact beat with adjusted earnings of 11-cents a share, when analysts were calling for just 5-cents. Revenue was also above consensus at $5.77-billion. Not only was Alcoa recently booted from the Dow. It has been a market laggard this year, down 12% as of yesterday's closing bell.

Finally, we want to focus on a number of stocks in the tech sector which were hit yesterday. Facebook (FB) fell 6.7%, back down below the $50 mark; business networking site LinkedIn (LNKD) fell almost as much, dropping 6.1%; and restaurant review site Yelp (YELP) looked unappetizing, plunging 7.6%. Two other big losers were Netflix (NFLX) which fell almost 5% and Priceline (PCLN) which dropped back below $1,000 a share when it shed 4%.