Cisco Roars Past Its Fellow Dow Stocks
Earnings season has come and gone for most Dow stocks, but that doesn't mean it's over. The Dow Jones Industrial Average has received a big boost from earnings today to stave off potential losses. As of 2:20 p.m. EDT, the Dow has gained just 15 points, but Cisco's dramatic rise has helped keep the blue-chip index afloat. Cisco wasn't the only Dow stock to report earnings today, but it's certainly making the most noise.
Earnings hits and misses
Cisco recorded $2.5 billion in earnings for the past quarter for an adjusted EPS of $0.51 per share, with revenue coming in at $12.2 billion. That's an earnings gain of more than 25% year over year and a revenue jump of more than 5%. Revenue met analyst projections, but earnings topped Wall Street's expectations by $0.02 per share. The beat helped Cisco easily outpace its fellow Dow stocks: Shares of the tech giant have grown by an eye-popping 13% so far today.
It wasn't much of a beat, but investors loved what Cisco reported. The firm reported double-digit emerging-market revenue growth, even as European sales continued to lag. Orders in the Americas shot up by 7%, so between that and its worldwide gains, Cisco may not need to worry about Europe's continued recessionary fallout. Cisco is doing well in Brazil and China, among other developing nations, setting itself up to soar once the global economy picks back up.
Wal-Mart also reported earnings today, but the company's results weren't nearly as favorable as Cisco's. The retailer's shares have led the Dow lower today by losing 2.2% after the company's revenue rose 1%, missing analyst projections. Earnings rose 1.1%, but that wasn't enough to outweigh the company's 1.1% same-store sales loss in the U.S. While Wal-Mart said it had increased its market share in select nations -- and it did see revenue growth of nearly 3% abroad -- the company's second-quarter earnings projections also fell below analyst projections, worsening investor sentiment. Wal-Mart will need to pick sales back up in the U.S. if it wants to satisfy investors next quarter.
Finally, tech's also having a good day, with IBM shares up 1.1% and Hewlett-Packard's stock up 2.3% to rank among the top Dow leaders. IBM got a boost today after Warren Buffet's Berkshire-Hathaway reported that it had bought 6.5 million shares of the computing giant. IBM's steady performance has been enough to win over the world's most renowned investor, and shareholders should like the company's growth-oriented moves to increase its cloud-computing and data-analysis businesses. IBM has recently pushed into China's computing business, hoping to take advantage of the second-leading economy's growing tech sector.
HP is not such an optimistic story today. While the company pleased investors with its recent revealing of the SlateBook x2 -- an Android-run laptop-tablet hybrid that HP plans to make available this summer -- the company's still facing heat over its ill-fated Autonomy writedown. Shareholders have launched a $1 billion suit against the company over the Autonomy buy, and that fight is one more headache this company doesn't need as it tries to turn around its struggling business.
The article Cisco Roars Past Its Fellow Dow Stocks originally appeared on Fool.com.Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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