U.S. Movers: Capital One, GE, Intel, Morgan Stanley, State Street, SunTrust

Mukesh Buch
18 Jan, 2013
New York City

Capital One plunged after it reported a sharp jump in loan loss provisions and revenues and earnings trailed expectations. Morgan Stanley stock gained after the company swung to a quarterly profit. General Electric reported stronger than expected sales in emerging markets.

[R]10:55 AM New York – Capital One plunged after it reported a sharp jump in loan loss provisions and revenues and earnings trailed expectations. Morgan Stanley stock gained after the company swung to a quarterly profit. General Electric reported stronger than expected sales in emerging markets.[/R]

Capital One Financial ((COF)) dropped 7.7% to $56.81 after the credit card company reported December quarter net profit increased to $843 million from $407 million a year ago and earnings per share rose to $1.41 from 88 cents.

The loans in its U.S. credit card business increased 47% from a year ago on the acquisition of loan and card portfolio from HSBC and rose 3.1% from the previous quarter to $83.1 billion.

Provisions for loan losses soared 33.7% to $1.2 billion from a year ago after the acquisition of HSBC’s U.S. credit card business with $30 billion in loans.

General Electric Company ((GE)) increased 43 cents to $21.73 and said fourth quarter operating earnings increased 13% to $4.7 billion or 33 cents a share from a year ago quarter. Revenues in the quarter rose 4% to $39.3 billion and $147.4 billion for the year.

Industrial segment profit rose 12% in the quarter to $4.9 billion and book-to-bill ratio was a record high of $210 billion. GE Capital earnings increased 9%.

Cash generated from the operating activities increased 48% to $17.8 billion and the company ended the quarter with $77 billion of cash and cash equivalent.

Intel Corp ((INTC)) declined 6% or $1.42 to $21.23 after the chip maker reported fourth quarter revenues declined 3% to $13.5 billion and net income dropped 31% to $2.5 billion. Earnings per share in the quarter plunged 25% to 48 cents from 64 cents a year ago quarter.

Gross margin dropped 6.5 percentage points to 58% in the quarter.

For the year 2012, revenues declined 1.2% to $53.3 billion and gross margin edged down 0.4 percentage point to 62.1%. Net income declined 15% to $11 billion and earnings per share dropped 11% to $2.13.

Johnson Controls, Inc ((JCI)) declined 4.5% or $1.46 to $30.50 after the maker of industrial products said December quarter sales were flat at $10.4 billion and net income declined to $354 million from $424 million a year ago. Earnings per share declined to 52 cents from 62 cents a year ago quarter.

The company said demand in Europe began to soften in the quarter and the company has begun restructuring initiatives and expects to “realize benefits in the second half of the year.”

Morgan Stanley ((MS)) increased $1.34 or 6.6% to $22.09 after the company reported net revenues for the quarter to December increased 23% to $7 billion from $5.7 billion. Income from continuing operations swung to $573 million or 28 cents a share from a loss of $1.7 billion or 58 cents a share.

For the quarter, net income including discontinued operations was 25 cents a share compared to a net loss of 15 cents a share. Compensation expense in the quarter declined to $3.6 billion from $3.8 billion a year ago.

The stocks scaled higher after the earnings release and the company said wealth management unit’s margin expanded to 17%.

For the full year 2012, Morgan Stanley reported net revenues of $26.1 billion and loss from continuing operation of 3 cents a share.

Earlier in the week, Morgan Stanley said it set aside $15.62 billion for compensation, considerably higher share of revenue 60% compared to 51% in 2011.

State Street Corp ((STT)) increased 6.2% or $3.10 to $53.49 after the fund administration services provider said fourth quarter revenues increased 6% from a year ago to $2.45 billion and net income fell to $468 million from $371 million.

Earnings per share in the quarter declined to $1 from $1.36 a year ago.

For the full year 2012, earnings per share increased 10.8% to $4.80 from a year ago and revenues rose 0.6% to $9.65 billion.

SunTrust Banks, Inc ((STI)) declined 1.2% to $29.21 after the bank reported total revenues rose 12% to $2.29 billion from a year ago quarter. Net income surged to $350 million from $71 million and earnings per share soared to 65 cents from 13 cents.

Tier-1 capital ratio increased to 11.1% from 10.9% in the quarter a year ago. The overall risk profile of the balance sheet continued to improve. Nonperforming loans declined$184 million, or 11%, sequentially and were 1.27% of total loans as of year-end, compared to 1.42% last quarter and 2.37% a year ago. Provisions for credit losses and net charge-offs were flat compared to a year ago period.