Here’s a look a look at some of the stocks the Yahoo Finance team will be watching for you today.
Dow component McDonald's (MCD) reported earnings that missed Wall Street estimates. Earnings came in at $1.21, $0.03 shy of estimates. Revenue was up 1.4% percent year over year to $6.7 billion. After disappointing sales last quarter, that was just short of the $6.73 billion analysts were expecting. McDonald's has been facing rising competition, notably from Taco Bell and its new breakfast campaign that takes direct aim at McDonald's.
Gilead Sciences (GILD) is expected to report earnings after the close today. Yesterday, the company announced the Food and Drug Administration accepted two new drug applications for HIV treatments. Also yesterday, Citigroup (C) said Gilead topped its list of best "buy"-rated stocks with a market cap of at least $3 billion. Citi said it believes Gilead will generate significant cash. The company is expected to report a jump in revenue to $3.9 billion in the first quarter.
We're also watching shares of Comcast (CMCSA), after the company this morning posted earnings per share of $0.68 which beat Wall Street estimates of $0.64 a share. They also beat on revenue, earning $17.41 billion versus Wall Street expectations of $17.04 billion. The company added 24,000 video subscribers in the first quarter and highlighted strength in its high-speed Internet business. The upbeat results come as Comcast seeks approval for its $45 billion acquisition of Time Warner Cable (TWC). Netflix (NFLX) came out against the deal, saying the combined company would have "anti-competitive leverage" with 60% of the country's broadband Internet homes.
Meanwhile, Netflix reported strong earnings after the close yesterday. Netflix earned $0.86 a share, beating analysts' estimates of $0.83 a share. Revenue rose 24% to $1.27 billion and met estimates. Netflix, which now has 34 million paid subscribers in the U.S. and more than 48 million worldwide, said it will increase the price of its streaming service by a dollar or two for new customers later this quarter.
In the corresponding video, Yahoo Finance Senior Columnist Mike Santoli spoke with Lauren Lyster about Netflix’s price increase and its war of words with Comcast. Santoli said the price increase is a logical step and makes sense in terms of business strategy. “A lot of people on Wall Street have said there’s a ton of room to raise prices to close the gap between what Netflix charges and what the standard cable package charges,” he said.
Santoli said the price increase makes it clear to consumers that it is becoming marginally more expensive to get media content and Netflix has a lot of costs behind it. “Netflix is not like some magical frictionless company that has no cost for new business,” he said. “They actually have to buy enormous libraries of business; they have to now pay Comcast for privileged access to their lines.” He said it’s interesting that they’re trading blows. “Clearly both sides want to say, ‘The other guy is making you pay more. Not us.’”
Lyster and Santoli also discussed the case involving Aereo and television broadcasters going before the Supreme Court today. Aereo provides a technology that allows viewers to watch and record broadcast television on computers or smartphones. Broadcasters argue that Aereo is infringing on copyrights. Aereo argues they’re accessing public airwaves. Santoli said it’s very complicated and a close call, but it does show there are going to be new ways to get media content. He added, “I also don’t think it’s a genie you can’t put back in the bottle for very long.“