U.S. Markets close in 5 hrs 41 mins

Google and Microsoft Weigh on World Markets; Detroit’s New Blues; TWC Takeover?

Dan Berman
Hot Stock Minute
Google and Microsoft Weigh on World Markets; Detroit’s New Blues; TWC Takeover?

Two tech titans are tumbling and taking world markets with them. They're Microsoft(MSFT) and Google (GOOG) which both missed their earnings estimates. Microsoft has been down as much as 7%, and Google has shed well over 3% the companies reported after yesterday's closing bell. Microsoft made 66-cents a share when estimates were for 75-cents. Revenue was $19.9 billion short of the consensus for $20.73 billion. Google made $9.56 a share versus estimates of $10.78. Revenue was $300 million short at $14.1 billion.

Now we look at some of the biggest companies to come out with earnings this morning. First is Schlumberger (SLB) which absolutely blew away estimates making $1.57 a share when consensus was for $1.10. That stock is currently up about 4%. Also out this morning is GE (GE) which beat on the bottom line, posting 36-cents a share, a penny above estimates. It did however, miss on revenue. And it's a similar story with Honeywell (HON). That company also beat on earnings with $1.28 a share versus estimates for $1.21 though it missed ever so slightly on revenue.

Motown's latest record is about the blues. The motor city has become the largest U-S municipality ever to file for Chapter 9 bankruptcy protection. While the big three automakers have been enjoying a bit of a revival, Detroit itself has fallen into crippling debt. There's no exact tally yet on the shortfall, but it's said to be at least 18-billion dollars. Part of the problem: the city spent $100 million dollars more than it took in every year since 2008. It has reached an agreement with some creditors to pay 75-cents on the dollar, but other negotiations have stalled. By the way, in a related story, Moody's has raised its outlook on the U-S to stable from negative, and is affirming the nation's triple-A rating.

There's new talk of a cable hookup. Bloomberg reports that Charter Communications(CHTR) is readying another bid for its bigger rival Time Warner Cable(TWC) Bloomberg says Charter has been working with Goldman Sachs to put together a proposal. Charter previously approached TWC about a takeover two months ago, but was rebuffed. Time Warner Cable leapt more than 5% in after-hours trading on the report, adding to a yearly gain of 33%.


Whirlpool (WHR) has climbed nearly 4% in early trading after releasing quarterly earnings. The company missed estimates posting $2.37 a share excluding items. Expectations had been for $2.42. The appliance maker did however beat on revenue with $4.7 billion versus $4.67 billion. The story beyond the numbers here: Profits were up 75% from a year ago and Whirlpool is raising its full-year outlook, citing a rebound in sales worldwide. Shares of Whirlpool have underperformed the market in 2013 up 11%. But they're up about 75% since this time last year.

AMD (AMD) has been down more than 5% in early trading. The company actually beat estimates when it reported earnings after the bell. But it lost 9-cents a share when expectations were for a loss of 12-cents. Revenue was also better than expected at $1.16 billion. Like its larger competitor Intel, the company is suffering from a slump in PC sales. Nevertheless AMD is projecting revenue will rise 22% in the period now underway. Not counting the losses we're seeing this morning, shares of AMD are actually up 83% so far this year.

Chipotle (CMG) has been trading 5% higher on its quarterly report. Chipotle matched on earnings with $2.82 a share. But revenue was stronger than expected at $816.8 million. Perhaps of more importance was the improvement over last year when sales had yet to hit $700 million. The chain credits the increase to both an addition of locations and a boost in same-store sales. The move up puts Chipotle back in reach of $400-dollars a share where it was a year ago. The stock is also closing-in on its all-time high, set back in April of 2012.

Intuitive Surgical (ISRG) has been down 13% in the premarket. We highlighted this company earlier in the month when it warned of weak sales for its Da Vinci surgical robots. Now Intuitive also says it has gotten a warning letter from the FDA relating to inspection problems with the equipment. The news came as the company released earnings after yesterday's closing bell. It posted $3.90 a share when consensus was for $4.04. Revenue was also well under $600 million when it was supposed to be substantially above that. Even prior to this morning's losses shares were down 17% in the past month.