The Great Blue Chip Rush

While January 8 marked the official start to earnings season and last week brought a handful of surprisingly strong earnings announcements, particularly from the financial sector, the real push began today. Starting this week, earnings season will kick off in earnest as the world’s largest public companies reveal what they accomplished in the fourth quarter. So now that Wall Street is back in business after yesterday’s holiday, let’s start the week on the right foot by getting caught up on today’s earnings.

Johnson & Johnson (JNJ) kicked things off first thing this morning with a fourth-quarter earnings announcement that topped estimates. Last quarter, the company incurred significantly lower settlement charges compared with Q4 2011. So net earnings spiked 1,079% year-over-year to $2.57 billion, or $0.91 per share. Excluding the effect of these special items, adjusted earnings came in at $1.19 per share, just topping the consensus estimate of $1.17 per share.

Meanwhile, the company also reported robust sales growth both domestically and abroad—total sales advanced 8% year-over-year to $17.56 billion. This barely missed analyst estimates of $17.67 billion. While consumer product sales remained largely flat, Johnson & Johnson saw stronger growth in its pharmaceuticals and medical devices divisions. Despite the sales miss, shares of JNJ remained flat during trading today.

Verizon Communications Inc. (VZ), on the other hand, announced a higher-than-expected loss for the fourth quarter due to the lingering effect of Superstorm Sandy as well as higher pension and benefits charges. This quarter’s net loss widened to $4.23 billion, compared with a loss of $2.02 billion in Q4 2011. Adjusted earnings weighed in at $0.38 per share, which missed the $0.50 consensus estimate by 24%.

However, investors took this news in good stride, partially because Verizon did beat analyst sales estimates. Compared with the same quarter last year, operating revenues advanced nearly 6% to $30.05 billion; this topped the $29.83 billion consensus estimate. Last quarter, Verizon’s Wireless business did particularly well with 2.2 million retail net additions and 8.5% service revenue growth. Shares of VZ also held their ground following the mixed earnings announcement.

That wraps up this morning’s big earnings announcements, but there’s plenty more to come. In just a few hours we’ll be hearing from tech giants Advanced Micro Devices Inc. (AMD), International Business Machines Corp. (IBM) and Google Inc. (GOOG). And tomorrow we get earnings results from the big Apple Inc. (AAPL). Here’s what analysts are calling for:

Ticker Sales Growth Estimate Earnings Growth Estimate
AAPL 18% -3%
AMD -32% -205%
IBM -1% 12%
GOOG 52% 11%

So right now these announcements look like they’ll range from outright disappointments (AMD) to stunning (GOOG). If any of these reports end up moving the market, you can hear about it first in my daily blog.

Sincerely,

Louis Navellier

Louis Navellier

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