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JCPenney Reports; JPMorgan’s Newest Mess; Buffett Company’s Recall

Dan Berman
Hot Stock Minute
JCPenney Reports; JPMorgan’s Newest Mess; Buffett Company’s Recall

U.S. markets are slightly positive despite a sea of red in Asia. Japan's Nikkei (^N225) fell 2.5 percent and markets in Europe are also moving lower. Here at home futures have been flat, following losses in the last four trading sessions. Today it's all about retail earnings dominating the early headlines.

JC Penney (JCP)

stock is jumping over 5-percent, but the reason a bit of a mystery. The beleaguered retailer reported losses of $2.16 a share, more than twice expectations for a loss of $1.06 a share. Revenue was also about $100 million dollars below estimates at $2.66 billion. Still the stock is trading higher.

The line of investigators knocking on J-P Morgan's (JPM) door just keeps growing. Now the Wall Street Journal reports the Justice Department is looking at whether the bank manipulated energy markets. Word of the investigation comes just a month after JPM settled a similar case with energy regulators. Meanwhile, there are at least six other investigations into the company's activities, including the London Whale case. The stock took a hit yesterday, closing down nearly 3-percent, though it's still up 39-percent over the past year.

Warren Buffett is going to have a lot of bonbons on his hands. See's Candies, which is owned by Buffett's Berkshire Hathaway (BRK-A)(BRK-B) is recalling all its dark chocolate blueberries. The problem: the treats contain milk, though it's not listed as an ingredient. Buffett has owned the California-based company for 40 years.


Home Depot (HD) is up 3% in early trading after beating on both the top and bottom lines, with profits of $1.24 a share when expectations were for $1.21. That came on $22.5 billion dollars in sales. Home Depot says it is in fact benefiting from a rebound in the housing market. It is raising its outlook for both same-store sales and yearly earnings. Prior to this morning, Home Depot stock is up about 18-percent year-to-date.

Best Buy (BBY) is up over 10-percent in early trading after posting adjusted earnings of 32-cents a share when expectations were for 12-cents. Revenues also beat at $9.3 billion. Sales are in fact down drastically over last year largely because the chain closed dozens of underperforming stores. Meanwhile, remaining ones have been redesigned with Samsung and Microsoft sections. Even before this morning's 16-percent spike, Best Buy stock has been up 160-percent year-to-date.

Barnes & Noble (BKS) shares are off 13% . The bookseller reported after wider than expected fiscal first-quarter loss of $1.56 a share versus an expected loss of 89-cents a share. Revenue fell about 10-percent to $1.33 billion versus an expected $1.31 billion. Further clouding the future of this struggling company, Chairman Leonard Riggio announced he suspended his bid to buy the B&N retail business. The stock dropped almost 5-percent yesterday ahead of this morning's report.

Finally, Urban Outfitters (URBN) is up 9% this morning coming off of its earnings report yesterday after the closing bell. The clothing chain missed revenue projections with sales of $759 million versus estimates of $768 million. However, it beat on the bottom line, posting profits of 51-cents a share, 3-cents above estimates. The company says it was successful in its attempts to run fewer discounts during the period. Sales were particularly strong at Anthropology stores which have been revamped to offer more feminine and bohemian styles. Prior to the gains we've been seeing this morning, the stock has been down about 3-percent this year.