Earnings Drag Major Stocks Down: MCD, GE, MSFT, GOOG

PUBLISHED: Oct 19 2012 @ 12:09 | Comments (0) | More info about Ed Liston

Earning season is in full swing. However, the markets got a big jolt yesterday as tech giant Google’s disappointing earnings got leaked ahead of the schedule. The leak promptly sent the company’s stock into a tailspin and the markets felt the tremors too.

However, Google is not the only company to suffer from such fate. Many other major companies including Microsoft and GE are in the same boat. So, here is a look at the top companies which delivered disappointing results and shook the market:

McDonald’s Corp. (NYSE:MCD): The fast food chain delivered disappointing results and missed its profit forecast. The company reported its income for the third quarter of the year at $1.46 billion, down from $1.51 billion it had earned for the corresponding quarter of the last year. On per share basis, its income fell from $1.45 per share to $1.43 per share. The company was expected to deliver $1.47 per share in income. Its total sales stood at $7.15 billion, down 0.2 percent. As a result of the weak numbers, McDonald’s is currently trading at $89.56, down 3.55 percent from its previous close of $92.86. The stock is trading at the Price Earnings ratio of 16.77. It has traded in the range of $85.92 and $102.22 in the past 52 weeks. However, the stock is trading above its 20 days moving average price of $89.5 but below 50 days moving average price of $89.78. The fast food company reported weak metrics in APMEA and US region while its business in Europe performed better than expected.

General Electrical Company (NYSE:GE): While the company managed to increase its earnings per share by 8.3 percent, it failed to meet analysts’ expectations. General Electrical also reported 2.8 percent increase in its revenue to $36.35 billion, falling below the analysts’ expectation of $36.94 billion. The stock is currently trading 2.69 percent down at $22.20. In this current trading session, it has traded in the range of $22.07 and $22.53 while its 52 weeks range is between $14.68 and $23.18. However, the stock is trading above its 20 days moving average price and 50 days moving average price of $22.19. The company has market capitalization of $233.98 billion and its stock is trading at the Price Earnings ratio of 17.86. Despite the weak quarterly results, the company is still likely to meet its annual targets.

Microsoft Corporation (NASDAQ:MSFT): The stock is currently trading at $28.64, down 2.93 percent from its previous close of $29.50. The stock is trading at the Price Earnings ratio of 14.35. It has traded in the range of $24.30 and $32.95 in the past 52 weeks. However, the stock is trading below its 20 days moving average price of $28.71 and 50 days moving average price of $28.74. The company first quarter’s net profit stood at $4.47 billion, down 22 percent while its sales declined 8 percent to $16.01 billion. Microsoft failed to meet consensus estimates and the result is evident through its stock price. The stock also had its price target cut by Barclays Capital. Its new target stands at $34, down from the previous target of $36. However, it retained its Neutral rating.

Google Inc. (NASDAQ:GOOG): While all the above companies declared their results below expectations, Google stole the show with added drama. It was scheduled to report its earnings after the market close yesterday. However, the papers were released prematurely during the trading session and the stock fell steeply, prompting the halt of the trading. The stock resumed its trading at 3.20PM EST. Today, it is trading at $673.36, down 3.11 percent from its previous close of $695. The stock had opened at $705.92 and has traded in the range of $672 and $706.70 in the current trading session. Google stock is down at high volumes as it has already traded 7.245 million, in comparison to its usual daily volume of 2.769 million. The company commands the market capitalization of $221.43 billion and its stock is currently trading at the Price Earnings ratio of 20.08. Google missed its earnings expectations and reported its third quarter earnings at $9.03, excluding items. The company had earned $9.72 per share for the corresponding quarter of the last year. Though, it reported 51 percent increase in its revenue to $11.33 billion, it fell short of consensus estimate of $11.86 billion in revenue.

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