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Home Depot Nails Earnings; Saks Soars on Site Plans; Medtronic Picks Up Pace

Dan Berman
Hot Stock Minute

Stocks drifted out of and then back into positive territory today as traders waited for testimony tomorrow from Fed Chairman Ben Bernanke and watched two of the nation's top CEOs put to the test. Apple's Tim Cook appeared before a Senate panel answering questions about his company's tax avoidance practices, while JPMorgan's Jamie Dimon won a non-binding vote that allows him to maintain dual titles as both CEO and Chairman. There were no major economic reports today to move the markets, though a number of companies made sharp moves on their earnings.

Home Depot (HD) is raising the roof on strong earnings. Shares moved higher-- at one point up 4%-- after the release of the company's quarterly report. The home improvement giant says sales are rising steadily as the housing recovery kicks-in. It posted earnings of 83-cents a share, up from 68-cents a year ago and beating estimates by 6-cents. Revenues were also considerably higher than forecasts. The company is also increasing its outlook for the rest of the year. Shares of Home Depot have been up 21% year-to-date, and more than 61% in the past year.

Best Buy (BBY) is up 47% over the past year, but fell more than 4% today after reporting quarterly results. Excluding items, the company beat on earnings, posting 32-cents a share when consensus was for 25-cents. But when you include one-time charges Best Buy actually swung to a loss of 24-cents a share. Looking ahead, Best Buy is hoping to increase store traffic with Samsung boutique stores. It has also laid out plans to reduce the amount of floor space to sell low-margin CDs and DVDs. Even with today's drop, shares of Best Buy are up 127% year-to-date.

Saks (SKS) soared more than 11% on its earnings report. Excluding items, the luxury department store chain matched earnings estimates of 19-cents a share. But it beat on revenues, posting $793.2 million when the forecast was for $776.8 million. The luxury department store chain says sales for the rest of the year should be up between 4% and 6%. It also announced plans to pick up the pace of an online site for its outlet chain Saks Off Fifth. Its primary competitors already have e-commerce sites for their outlet stores.

Medtronic (MDT) also rose on its earnings, climbing  5% for part of the trading day. The medical device maker posted earnings of 96-cents a share, up from 94-cents a year ago. Adjusted earnings were actually $1.10 a share when consensus was for $1.03. Sales also beat expectations coming in at $4.46 billion compared to last year’s figure of $4.3 billion. The company is now predicting revenue growth of 3% or 4% in its next fiscal year.

So much for a rising tide lifting all ships. Carnival Corporation (CCL) drifted down more than 4% today. The cruise company has lowered its full-year forecast to somewhere between $1.45 and $1.65 a share. The previous forecast was between $1.80 and $2.10. Carnival says it has been forced to lower prices in the wake of several disasters and mishaps, most notably an engine-room fire on the Triumph in February. That incident left 3,100 passengers with limited food and toilet service for several days. Prior to today's losses, Carnival was down about 6% this year.