Earnings Surprises That Will Give You Trade Setups Tomorrow

January 22, 2004
Brice Wightman

The Dow and
SPX were slightly lower Thursday while the Nasdaq took a larger hit on some poor
earnings reports. Kodak
(
EK |
Quote |
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PowerRating)
said it will lay off up to 150,000 jobs and take a $1.7 billion charge over the
three years to move from the sluggish film market toward digital products. This
decision is expected to save the company up to $1 billion by 2007. EK’s net
fourth-quarter income fell by 83% to $19 million. Auto-maker Ford Motor
(
F |
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PowerRating)
reported a larger-than-expected net loss of $793 million for the quarter on
sales of $164.2 billion. eBay
(
EBAY |
Quote |
Chart |
News |
PowerRating) reported much stronger holiday
season sales, up 57% with international revenue almost doubling. Income rose to
$157 million on $648.4 million revenue.

Airlines were strong, as
Southwest Airlines
(
LUV |
Quote |
Chart |
News |
PowerRating) posted profits and AMR was upgraded after
posting smaller losses yesterday.

Today, the US Justice
Department indicted Former Enron accounting chief Richard Causey on five counts
of securities fraud and one count of conspiracy to commit fraud. After
the close, Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating) and KLA Tencor
(
KLAC |
Quote |
Chart |
News |
PowerRating) will
report their earnings, with the Street looking for 30 cents on MSFT and 19 cents
on KLAC.

US equity inflows for the first
11 days in January were $10.5B; the prior 11-day record was February 2000, with
$6.6B.

Dow	-0.44	10623.18
S&P 500	-3.68	1143.94
Nasdaq	-1.09	2119.01

Economic news releases today
included Initial claims dropping to 341,000, and leading indicators that rose by
0.2%.

10-year Notes were +135
at 114 195

The dollar
was -0.55 at 85.81

Gold was flat at 409.64

Crude Oil was +.40 at
34.98

Volume was
1,693,529,000 on
the NYSE, and 2,322,949,000 on the Nasdaq.

Market breadth is mixed.

NYSE	Issues
Advancing	1671	Up Vol 644
Declining	1618	Down Vol 959
Ratio	1.03	1.48
Nasdaq
Advancing	1193	Up Vol 673
Declining	2020	Down Vol 1579
Ratio	1.69	1.48

Stocks in the news:

Pfizer [PFE|PFE],
reported earnings of $602 million with revenue growing by 52% to $14.17 billion,
well ahead of analysts’ consensus. For fiscal year 2004, the company expects to
earn $2.13 a share on revenue of $54 billion.

Automatic Data Processing
(
ADP |
Quote |
Chart |
News |
PowerRating)
reported net income of $228.6 million, on revenue of $1.83 billion. The company
said that growth in brokerage, employer and dealer services business was strong
while its claims division was weak.

F5 Networks
(
FFIV |
Quote |
Chart |
News |
PowerRating) rose 20% after
posting better-than-expected quarter results. Net income rose to $3.8 million
with revenue at $36.1 million. For the next quarter, the company expects to earn
14 cents per share on revenue of $38 million.

Starbucks
(
SBUX |
Quote |
Chart |
News |
PowerRating) rose after reporting
a strong holiday season sales with earning jumping 41% to 110.8 million.
Overall sales rose 28% by $1.28 billion from $1.01 billion a year ago, with
same-store sales rising 11%.

bricew@tradingmarkets.com

Earnings Surprises That Will Give You Trade Setups Tomorrow

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