Sunday, November 24, 2013

Earnings roundup: Coke fizzy, Schwab soars

Charles Schwab stock soared in Tuesday afternoon trading after announcing that its third-quarter net income climbed 19%.

Trading and interest revenue also rose, beating analysts' forecasts.

Schwab's active broker accounts grew 3% from a year ago, to nine million. Revenue rose 14% to $1.37 billion from $1.2 billion. Wall Street was looking for $1.34 billion in revenue.

Shares climbed 5% on the news, with the stock at its highest level in more than five years.

TUESDAY STOCKS: How markets performed

Also up, by lesser amounts, were Dow Jones industrial average members Coca Cola and Johnson & Johnson.

Banking giant Citigroup missed analysts estimates, notching earnings of $1.02 a share, under the $1.04 estimate, on revenue of $17.9 billion.

Profit was up at Coke as the world's biggest beverage maker managed to sell more of its drinks despite choppy economic conditions.

The maker of Sprite, Powerade and Vitaminwater in addition to its namesake brand, said global sales volume edged up 2%, helped by its performance in countries such as China, India and Russia.

Still, the Atlanta company conceded that it was facing an economic slowdown in many parts of the world including Mexico, where the government is also considering a tax on sugary soft drinks.

In a conference call with analysts, CEO Muhtar Kent pushed back at the suggestion that the company's days of growth were coming to an end. He noted that the company is emphasizing affordability and smaller packages to "keep the drinkers base growing" in developing markets.

The company said its namesake brand saw volume growth of 22% in India. In China, soft drink volume rose 8%.

Johnson & Johnson benefited from a big jump in prescription drug sales and continued recovery of its consumer health business. Those successes helped the health care giant overcome a new problem, slumping sales of its medical devices.

That was mainly due to pricing pressure in the U.S. that forced J&J to ! cut prices for devices including diabetes testing products and spine and hip replacement parts, and trouble integrating part of the product line and sales force of orthopedic products maker Synthes, bought last year for $20 billion in J&J's biggest acquisition ever.

Stock of the New Brunswick, N.J.-based company is near its 52-week high of $94.42.

J&J said Tuesday that net income was $2.98 billion. Excluding one-time charges, it earned $1.36 per share, 4 cents better than analysts expected.

"We are still seeing (health care) utilization rates that are essentially flat year over year," Chief Financial Officer Dominic Caruso told analysts on a conference call.

Contributing: The Associated Press

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