U.S. Indexes Sideways, PepsiCo Net Falls 21%

Arthi Gupta
25 Jul, 2012
New York City

U.S. indexes traded sideways after Apple Inc missed earnings forecast. Ford and PepsiCo reported quarterly declines in earnings but Boeing net rose 3% in the quarter.

[R]10:00 AM New York – U.S. indexes traded sideways after Apple Inc missed earnings forecast. Ford and PepsiCo reported quarterly declines in earnings but Boeing net rose 3% in the quarter.[/R]

U.S. indexes traded sideways after a batch of stronger than estimated earnings and weaker than expected earnings from Apple Inc.

PepsiCo reported a decline in second quarter net revenue, hurt by structural changes and foreign exchange translation.

European markets edged higher but economic crisis deepened and investors awaited report from the troika about the Greek government progress.

Germany sold debt at a record-low yield at an auction today. However, the business confidence index for Germany fell to 103.3 in July from 105.2 in June, the third straight month of decline.

The UK economy contracted 0.7% sequentially in the second quarter, the steepest decline since the first quarter of 2009.

Germany raised €2.322 billion from the sale of its 2.50 percent July 2044 Federal Bonds at an average yield of 2.17% from 2.41% in the previous sale on April 25. The bid-to-cover ratio rose to 1.5 from 1.1 in April.

Germany also sold €752 million of 0.10 percent April 2023 inflation-linked bonds today. The yield was a negative 0.39% and the bid-to-cover ratio was 1.9.

Asian markets ended lower on euro-zone debt concerns as Spanish yields hover near unsustainable levels and Greece has drifted from its austerity path and traders are awaiting the report from troika on government’s progress in cutting deficit.

Japan recorded a trade surplus of 61.7 billion yen in June, according to a report released by Japan''s Ministry of Finance.

Separately, China’s growth rate is set to moderate to around 8% as the government takes measures to cool the economy and on the global economic slowdown, according to a report from the IMF.

Earnings Review

Apple Inc. ((AAPL)), the electronic gadget maker reported third quarter revenues rose 23% to $35.02 billion. Net income fell 21% to $8.82 billion or $9.32 per share compared to $7.31 billion or $7.79 per share for the year-ago quarter.

The company sold 26.0 million iPhones in the quarter, an increase of 28% from a year ago quarterly sales and sold 17 million iPads, an 84% unit increase. The company sold 4 million Macs during the quarter, a 2% unit increase.

Eli Lilly and Co. ((LLY)), the drug maker reported second quarter revenues fell 10% to $5.6 billion. Net income declined 23% to $923.6 million or 83 cents per diluted share from $1.20 billion or $1.07 per share the prior year.

Ford Motor Company ((F)), the automaker reported second quarter revenues declined 6.2% to $33.3 billion from $35.5 billion in the prior year quarter. Net income for the quarter decreased 56.6% to $1.040 billion or 26 cents per diluted share from $2.398 billion or 59 cents last year.

PepsiCo, Inc. ((PEP)), the food and beverage company reported second quarter net revenue declined 2.2% to $16.46 billion. Net income in the quarter fell 21.2% to $1.49 billion or 94 cents per share from $1.89 billion or $1.17 per share a year earlier.

The Boeing Company ((BA)), the aerospace company reported second quarter revenues rose 21% to $20 billion. Net income increased 3% to $967 million or $1.27 per share from $941 million or $1.25 per share in the prior-year quarter.