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GE & MCD Report; Dell Developments; SeaWorld Makes Waves

Dan Berman
Hot Stock Minute

A trifecta of tech companies reported after the closing bell yesterday, and you say, "two out of three ain't bad." Google (GOOG) beat estimates posting earnings of $11.58 per share. That was a 16% rise, though the average price that advertisers are paying for clicks on ads fell 4% Microsoft (MSFT) also beat, with earnings of 72-cents a share. That was a hefty 19% rise driven by sales of software for servers, as opposed to Windows 8. Finally the loser in the bunch was IBM (IBM). Big Blue missed for the first time since 2005. Profits per share came in at $3, falling short by a nickel. In a related item, China's Lenovo group is said to be in talks with IBM to buy part of its server business. Lenovo bought the company's PC unit nearly a decade ago.

There has been a surprise twist in the pursuit to sell Dell (DELL). Blackstone Group has withdrawn its bid to buy the PC maker. The private equity firm had been trying to top a $24.4 billion bid by company founder Michael Dell and Silver Lake. But now it has lost interest, citing the decline in PC sales. Activist investor Carl Icahn remains in talks with Dell, hoping to spearhead a better offer. Earlier this week he agreed to cap his stake in the company in exchange for the right to talk with other shareholders.

Back to Blackstone, the group hopes to make a splash today here on the NASDAQ with an IPO. The private equity firm is taking SeaWorld public once again. 26-million shares of SeaWorld are being offered at $27 apiece. Blackstone acquired SeaWorld from Anheuser Busch InBev for $2.3 billion.


Under Armour (UA) has just reported earnings this morning. Here are the highlights: Revenue increased 23% to $472 million. Income decreased 47%, though largely because of planned marketing expenses. The company has also raised its outlook for the entire year. Under Armour says it is placing renewed focus on creating innovative clothing products. It also cited strength in its footwear business. The stock hit its 52-week high back in September. It has gained about 15% year to date.

Up next we have Chipotle (CMG), which has been up more than 5% in early trading. Chiptole beat the street when it reported earnings after the bell yesterday. It posted profits of $2.45 a share compared with estimates of $2.13. You may recall, fund manager Jeffrey Gundlach sent shares tumbling more than 3% last week when he joked that a gourmet burrito is an oxymoron. Shares of Chipotle are now at about $345 a share, about midway between their 52-week high and low. The high of $440 was exactly 1-year ago.

Now Restoration Hardware (RH), which has also been on a tear in the wake of its earnings. The home products chain reported a loss for the fourth quarter, but its adjusted results beat expectations. In addition, the company improved its outlook. Restoration Hardware is chalking its losses up to costs stemming from its IPO which it held back in November. Adding in this morning's gains, the stock is up about 10% since then.

Finally, we look at Vertex Pharmaceuticals (VRTX) which is up an astounding 60% in premarket trading. Vertex says its experimental drug for cystic fibrosis improved lung function in adults in a mid-stage trial. The new drug was tested in combination with an existing one also made by the company. The advance puts the stock at its highest price since October of 2000.