April 21, 2012
The Dow Jones Industrials (INDEX: ^DJI ) jumped a full 1.2% this week, after several big-name companies reported strong earnings. Three in particular stood out.
Weekly Price Change
|Travelers (NYSE: TRV )
|Microsoft (Nasdaq: MSFT )
|Wal-Mart (NYSE: WMT )
Last quarter, Travelers fell 4% after it reported weak underwriting and investment results. But this time, the insurance giant soared on indications by management that underwriting rates may finally be increasing after a long period of soft pricing. Combine this better pricing with (hopefully) fewer natural disasters that plagued the company last year, and we could see much better underwriting performance. Earnings per share also rose from $1.92 to $2.02, though that was due to a smaller share count; net income actually declined because of investment losses and a big tax gain last year.
On Thursday night, Microsoft reported that it earned $0.60 per share -- $0.02 higher than analysts had forecasted. Although its small but-growing entertainment unit had a weak quarter, its larger divisions -- Business, Windows, and Servers and Tools -- all saw sales growth. That's a good sign for the company, particularly with Windows 8 set to premiere later this year.
The discount retailer doesn't report earnings until May, but there are several possible reasons it might have popped on Tuesday. The IMF raised its estimate for global GDP growth to 3.5% from 3.3%. The company also announced that it will be beefing up its India e-commerce team. Finally, Coca-Cola (NYSE: KO ) reported strong earnings on 5% global volume growth, while Goldman Sachs raised its valuation estimate for Kraft -- signs, albeit oblique, that investors could have taken as evidence for a good retail quarter.
With earnings season upon us, we can expect to see even more big moves and major opportunities for long-term investors. So check out "5 Stocks Investors Need to Watch This Earnings Season." Our chief investment officer and top analysts all agree these are the ones you don't want to miss. Get free access to this special report.