Stock Markets Stuck in Neutral After Earnings Send Mixed Messages

We're in the midst of earnings season, and investors don't quite know what to take from the reports out today. Boeing's (NYSE: BA  ) stock is up 2.6% on strong results, AT&T (NYSE: T  ) met expectations and the stock dropped 5.2%, and Procter & Gamble's (NYSE: PG  ) weak guidance sent the stock 5% lower. Add it all up and you have a lot of movement among individual stocks, but broader markets have gone almost nowhere. The Dow Jones Industrial Average (DJINDICES: ^DJI  ) has fallen just 0.16% near the end of trading, and the S&P 500 (SNPINDEX: ^GSPC  ) is up 0.14%.

Boeing's big move was driven by an earnings beat on both the top and bottom lines. Revenue fell 2.5% in the first quarter to $18.89 billion, but that was still ahead of the $18.8 billion estimate from Wall Street. When you pull out one-time items like pension fluctuations, the company made a profit of $1.73 per share, well ahead of the $1.49 estimate. Lower government spending is hurting the company's revenue, but it Boeing has done a good job controlling costs, especially when you consider the challenges the 787 Dreamliner has gone through recently. 

The challenge going forward is emerging competitors, and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool's best industrial-sector minds have collaborated to provide investors with the must-know info on Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

AT&T is selling off on more evidence that the company is falling behind Verizon Wireless. Mobile-phone sales rose 3.4% to $16.7 billion in the quarter, whereas analysts expected 5.4% growth, and the company lost share to Verizon Wireless. The challenge for AT&T is that Verizon's network is larger, attracting more customers who are willing to pay for better service. To catch up, AT&T will have to spend billions of dollars upgrading its network, which would have negative near-term implications. AT&T isn't a bad company right now; it's just that Verizon Wireless is better. 

Procter & Gamble's move was the most concerning for those looking at the overall economy. Organic growth was just 3% during the quarter, and net sales rose just 2% to $20.6 billion. This fell just short of estimates, and a cautious outlook has investors running for the hills today. Let's put the company's results into perspective, though. P&G makes consumer staples that may not be growing rapidly, but they aren't in decline either. The stock trades at 18 times earnings and pays a 3% dividend yield, so investors are getting a stable company and a payout 50% higher than Treasuries. It wasn't a good quarter for P&G, but it's not a quarter long-term investors should panic over, either. 


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Related Tickers

9/22/2014 2:16 PM
^DJI $17196.32 Down -83.42 -0.48%
DOW JONES INDUSTRI… CAPS Rating: No stars
^GSPC $1994.11 Down -16.29 -0.81%
S&P 500 INDEX CAPS Rating: No stars
BA $128.86 Down -0.49 -0.38%
The Boeing Company CAPS Rating: ****
PG $84.80 Up +0.33 +0.39%
Procter & Gamble CAPS Rating: ****
T $35.47 Down +0.00 +0.00%
AT&T CAPS Rating: ***

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