Sunday, April 17, 2011

Earnings Season - Week One Provides a Bumpy Ride

First quarter earnings season had a rough start this past week. Weekly stock performance for several firms that reported earnings included Alcoa Inc. (US: AA) down 7.8%, Bank of America Corp. (US: BAC) down 4.9%, Charles Schwab Corp. (US: SCHW) up 1.2%, Google Inc. (US: GOOG) down 8.2%, Infosys Technologies Ltd. (India: INFO) down 8.7% and JP Morgan Chase & Co (US: JPM) down 4.2%. This week, firms reporting quarterly results include Apple (US: AAPL), China Mobil Ltd. (Hong Kong: 941), Freeport-McMoRan Copper & Gold, Inc. (US: FCX), General Electric Co. (US: GE), Goldman Sacks Group Inc. (US: GS), Intel Corp. (US: INTC), IBM Corp. (US: IBM), McDonalds’s Corp. (US: MCD), Morgan Stanley (US: MS) and Yum! Brands Inc. (US: YUM).

MY TAKE
Earnings season is a volatile time for the markets. While several firms had disappointing results, it is a small sample of the hundreds of companies that will share their financial performance during the next few weeks. Positive results and outlooks from companies, along with investor confidence about the future, are critical components for supporting positive market momentum.

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