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Q1 GDP Disappoints; Soros Picks Up Penney’s; Latest Round of Earnings

Dan Berman
Hot Stock Minute
Q1 GDP Disappoints; Soros Picks Up Penney’s; Latest Round of Earnings

First quarter GDP looks like a disappointment. The first estimate of growth for Q1 was 2.5% below predictions of 3.2%. It looks like stocks are headed lower on the news.

We're awaiting quarterly earnings from Chevron. Meanwhile, Tyco (TYC) has released its earnings, beating the street on both earnings a revenue-- a rarity this quarter. It made 42-cents a share on $2.6-billion. Burger King (BKW) is also out with earnings. It matched estimates for 17-cents a share when you exclude items. Revenue beat at $327-million.

George Soros is in for a Penney, as in JC Penney (JCP). The financier has revealed he holds close to an 8% stake in the beleaguered retail chain. It could be another vote of confidence for returning Chief Executive Mike Ullman who's been back on the job since April 8th. The day his return was announced, shares of Penney tanked 12%. They've climbed more than 9% since then, and have been logging another 6% rise this morning in premarket trading.


Amazon (AMZN) has been down more than 3% here in early trading on the NASDAQ. The company came out with its earnings after the closing bell yesterday. It posted 18-cents a share, easily beating estimates of 8-cents. Revenue was up 22% from a year ago, but fell a little short of expectations. Bottom line: the company is growing rapidly, but spending money almost as fast as it comes in. Moving forward, Amazon is forecasting a bit of a slowdown. The stock is currently off its highs which it hit back in January, but it's still up about 40% since this time last year.

Next is Starbucks (SBUX) which is currently down following the release of its earnings after yesterday's closing bell. The company says it made 48-cents a share, right in line with expectations Revenue came in shy of estimates at $3.56-billion even though it rose 11% to a new record. Here's the problem, sales at the coffee giant appear to be cooling. The company also gave disappointing guidance for the coming quarter. At yesterday's close, shares were up exactly 10% for the year and trading at their 52-week high.

Coinstar (CSTR) has been up more than 8% in early trading on the heels of its earnings. The company impressed investors logging earnings of 93-cents a share when consensus was for 86-cents, though like so many other companies it missed slightly on revenue. The company known for its Redbox movie and game rentals faces increasing competition from streaming services. It plans to change its name to Outerwall in June. The stock hit its 52-week high last summer, and prior to the climb we're seeing this morning had been down 18% in the past year.

Expedia (EXPE) has been traveling lower this morning following its quarterly report. This is a bit of surprise because the company beat on both the top and bottom lines, posting 25-cents a share in profits. Expedia is forecasting weakness at its Hotwire brand. The company is blaming increased competition in the discount travel sector, as well as rising rates for car rentals. You can't accuse this company of going nowhere. As of yesterday's close, shares had more than doubled in the past year.