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Dow Edges Higher, Sets New Record Highs After Mixed Earnings Results

Dan Berman
Hot Stock Minute

Stocks were mixed today on a barrage of earnings reports from blue chip companies. But that didn't stop the Dow from hitting a record intraday high of 15,604 and setting a new closing high of 15,569.

Three Dow components came out with their quarterly results this morning, and all three told a similar story: a beat on earnings but a miss on revenue. The pattern was most pronounced with Travelers (TRV) which wound up falling over 3.5%. Excluding items, Travelers posted earnings of $2.13 when estimates were for $1.60. But revenue was about $150 million below projections at $5.824 billion versus $5.971 billion. Dupont (DD) also missed on revenue, which came in at $9.84 billion when it was expected to pass the $10 billion mark. The company beat on earnings by a penny posting profits of $1.28 a share. Meanwhile, United Technologies (UTX) posted earnings of $1.70 a share compared with estimates of $1.57. In this case, revenue was $16 billion even, when consensus had been for another $369 million behind the decimal point.

Wendy's (WEN) rose 8% on its quarterly earnings. The nation's second-largest burger chain posted a higher-than-expected quarterly profit of 3-cents a share. It also raised its dividend by a penny to 5-cents a share and forecast strong earnings growth beginning next year. The company plans to sell some of its restaurants to franchise operators which will then generate higher profit margins. Revenue for the quarter rose to $650.5 million which was below estimates of nearly $656 million but up from $645.9 million a year ago.

Lockheed Martin (LMT) rose almost 2% today following a nice beat on both the top and bottom lines with earnings 20% above estimates. Altria (MO) dipped over 2% with a miss on both the top and bottom, but not by much with earnings of 62-cents on $4.5 billion. UPS (UPS), which warned last week, matched on earnings estimates with $1.13 a share, but it missed slightly on revenue. Its shares were down fractionally.

Netflix (NFLX) shares were down 4.5% on the heels of the company's quarterly earnings report. The company matched on revenue of $1.07 billion and reported earnings of 49-cents a share, more than 20% above expectations which were for 40-cents a share. The main problem: original programming like House of Cards and Arrested Development failed to lift subscriptions as much as predicted. The company has also been losing content as deal with partners like Viacom expire. One analyst with Wedbush Securities warns that without a pickup in subscriptions, Netflix shares could lose half their value.

Texas Instruments (TXN) rose 4% today on its earnings which were also released after yesterday's closing bell. The company managed a slight beat on earnings posting 42-cents a share, a penny better than expected. It did however miss on revenue, which was down 9% from a year ago. Most important perhaps was that profit was up 48% both on cost-cutting and rising demand for computer chips from automakers and industrial companies.