Earnings Roundup: Alcoa (AA), Google (GOOG), And Wells Fargo (WFC)

| April 18, 2012 | 0 Comments

Earnings season is in full swing… It’s time for companies to put up or shut up.

Last week, Alcoa (AA), Google (GOOG), and Wells Fargo (WFC) all reported solid quarterly earnings.  Let’s take a closer look…

Alcoa reported earnings of 10 cents per share.  Far better than the 4 cent per share loss analysts had been expecting.  Simply put, they hit it out of the park.

It was a nice surprise from a company that struggled to a 3 cent per share loss last quarter.

How did they get things turned around?

The aluminum maker cut costs and sold more aluminum to companies in the automobile and aerospace industries.

However, management was cautious with their earnings guidance because there’s a glut of aluminum and prices are depressed.

That could be a blessing for investors.  AA should have little trouble beating estimates next quarter.

Google reported earnings of $10.08 per share.  And they announced an unusual stock split.

The tech giant led off with a better than expected 14.5% first quarter earnings growth.  However, revenue growth of 22% came up just short.

It’s a solid start for a highly anticipated tech earnings season.  Now, other tech companies need to follow Google’s lead if the sector is going to hold onto it impressive gains so far this year.

On the other hand, Google’s stock split is a bit confusing.

They’re splitting the stock 2-for-1.  Investors will receive one share of the new Class C stock for every share of Class A or Class B stock they own.

I don’t understand why they need an entirely new class of stock.  One thing’s for sure, the split is going to play havoc with the stock options on GOOG.

Wells Fargo reported earnings $0.75 per share.  A 13% jump from the first quarter of last year.

Their results were fueled by rebound in mortgage lending and a fewer delinquent loans.

At this point, Wells is the largest mortgage lender and servicer in the US.  So it’s not surprising to see the bank turn in solid quarter.

Remember, we had record low mortgage interest rates last quarter.  And home buying activity accelerated as bargain hunters bought homes at depressed prices.

The fact is WFC is one the strongest banks around.  And they’re leveraged to a rebound in housing.  They could end up being the big winner in the aftermath of 2008 financial crisis.

Clearly, first quarter earnings season got off to a fast start.  And it continued this week with strong reports from Coca Cola (KO) IBM (IBM), Intel (INTC), and Goldman Sachs (GS).

Keep an eye on YUM! Brands (YUM), Microsoft (MSFT), Verizon (VZ), and McDonald’s (MCD) when they report earnings later this week.  The performance of these bellwethers will likely determine the fate the markets this week.

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Category: Stocks

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Corey Williams is the editor of Sector ETF Trader, an investment advisory service focused on profiting from ETFs and the economic cycle. Under Corey’s leadership, the Sector ETF Trader has become one of the most popular and successful ETF advisories around. In addition to his groundbreaking service, Corey is the lead contributor to ETF Trading Research, where he shares his insights about ETFs and financial markets on a daily basis. He’s also a regular contributor to the Dynamic Wealth Report and the editor of one the hottest option trading services around – Elite Option Trader.

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