Is A Google IPO Announcement Imminent?
Stocks rose Friday, capping off the busiest week of
the reporting season. Economic
reports showed that durable goods orders leaped 3.4%, much higher than the 0.7%
economists had estimated; demand was strong for a broad array of products.
For the week, the Dow gained
0.2%, the Nasdaq rose 2.7% and the S&P added 0.67%.
Of the companies reporting so
far, 78% have beaten estimates, 11% have met estimates, and 11% have missed
estimates, with technology, basic materials and consumer cyclicals showing the
strongest gains and utilities the weakest.
Fed Governor
Bernanke said that
GDP rose between 4.5% – 5% in Q1.
Analysts are beginning to focus on the projected deceleration of future
earnings. For Q4, earnings increased 28.3%, but are expected to decline
as follows: Q1, 23.7%; Q2, 16.1%; Q3, 12.1%. The question being asked is:
how do P/Es expand in a rising interest rate environment with declining
earnings?
Xerox
(
XRX |
Quote |
Chart |
News |
PowerRating) fell sharply despite reporting a strong profit of $248
million. The company had strong sales of color systems and office digital
products with revenue at $3.8 billion.
Microsoft
(
MSFT |
Quote |
Chart |
News |
PowerRating)
posted earnings that beat expectation, with sales of $9.18 billion and earnings
fell to $1.32 billion from $2.14 billion a year ago. Xbox sales rose 30% and its
deferred revenue balance was lower to $7.5 billion. The company has a $56.4
billion cash — or $5.17/share — balance and said would pay out a larger
dividend or increase stock buybacks before its July analyst meeting. For the
next quarter, the company expects earnings to reach 28 cents with sales expected
to exceed $8.9 billion. For 2005, the company guided lower, expecting $1.17 a
share with 4% revenue growth rate.
Google is expected to
announce its IPO by the end of April. The deal could be as large as $25 billion
with $100 million in fees to Wall Street. Yahoo and AOL are rumored to be owners
of Google private shares.
New York Attorney General
Eliot Spitzer is now investigating fees charged by insurance brokers;
specifically whether there is a conflict of interest involved in paying
commissions to sell particular insurer’s products.
| Dow | +11.64 |
10472.84 |
| S&P 500 |
+0.67 | 1140.60 |
| Nasdaq | +16.86 |
2049.77 |
The day’s leading sectors were Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating) +1.56%,
Retail
(
RLX.X |
Quote |
Chart |
News |
PowerRating) + 0.20%, Hardware
(
HWI.X |
Quote |
Chart |
News |
PowerRating) +0.20%.
Weak today were Airlines
(
XAL.X |
Quote |
Chart |
News |
PowerRating) -2.05%, Gold & Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating) +1.58%; Homebuilders
(
HGX.X |
Quote |
Chart |
News |
PowerRating) -1.46%; Internet
(
GIN.X |
Quote |
Chart |
News |
PowerRating) -1.16%.
The dollar
was +0.21 at 91.08
Gold was +1.32 at 394.80
Crude Oil was -0.31 at
36.46
Volume was
1,392,537,000 on
the NYSE, and 1,951,405,000 on the Nasdaq.
Market breadth was mixed.
| NYSE | Issues | |
| Advancing | 1145 | Up Vol 544 |
| Declining | 2163 | Down Vol 817 |
| Ratio | 1.89 | 1.50 |
| Nasdaq |
||
| Advancing |
1454 | Up Vol 1226 |
| Declining |
1688 | Down Vol 677 |
| Ratio | 1.16 | 1.81 |
Stocks in the news:
Broadcom
(
BRCM |
Quote |
Chart |
News |
PowerRating) reported
earnings of $39.9 with revenue up 20% to $573.4 million.
Scientific-Atlanta’s
(
SFA |
Quote |
Chart |
News |
PowerRating) profit
more than doubled to $54 million on much strong DVR set-top box sales with
revenue up 14% to $437 million.
Amazon
(
AMZN |
Quote |
Chart |
News |
PowerRating) reported earnings
of $111 million with sales up 41%, well ahead of analysts’ consensus. Sales grew
to $1.53 billion and is expected to reach $1.40 billion for the next quarter.
Schlumberger
(
SLB |
Quote |
Chart |
News |
PowerRating) was lower
after posting income of $220.3 million on revenue of $3.02 million as it
reported strength in its oilfields around the globe.
Brice Wightman
bricew@tradingmarkets.com