Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.

Strong Earnings Fail to Lure Buyers on Wall Street

Pessimism has set in on Wall Street, and it seems like no matter how good earnings reports are, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) will find a way to fall. Today, both Boeing (NYSE: BA  ) and DuPont (NYSE: DD  ) reported stronger-than-expected earnings, yet Boeing's stock crumbled, and the Dow fell 1%, as well.

It didn't help that midday, the Federal Reserve announced that it would further trim its asset-buying program by $10 billion, to $65 billion per month. Chairman Ben Bernanke led his final policy meeting, leaving way for Janet Yellen next month.

Boeing sees clouds in the forecast
Boeing reported that core earnings, which pull out one-time impacts like pension costs, rose 29%, to $1.84 billion, or $1.88 per share in the fourth quarter. That easily topped the earnings estimates of $1.57 per share, but couldn't keep the stock from falling 5.4% today.

The reason is that management is being cautious about 2014, primarily because of uncertain defense spending. CEO Jim McNerney said they were "very concerned about longer-term U.S. budget uncertainty" in a conference call with investors. The cautious tone played out in guidance, which was for just $7.00 to $7.20 per share in core earnings this year versus $7.07 in 2013.  

Boeing is known for sandbagging guidance early in the year, and McNerney is likely just being cautious with production and defense spending uncertainty ahead. I don't think this fundamentally changes the company. or signals a sell sign for investors.

DuPont sees profits double
The other big earnings report on the Dow came from DuPont, which impressed investors with net income that doubled to $185 million, or $0.20 per share, in the fourth quarter. Operating profit was $0.59 per share compared to the $0.55 estimate from analysts, and management said the company will earn $4.20 to $4.45 per share. 

After a rough 2013, DuPont looks like it's performing well, and agriculture spending is leading the way. The ag business saw revenue rise 18%, as high-yielding seeds and improved insecticides remain in high demand.

Shares are trading at just 13.7 times the high end of this year's estimates, and the company is paying an incredibly consistent dividend that yields 3%. Right now, I think that DuPont is set up for a great year.

Dividend stocks pay to hold long term
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks, as a group, handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks, in particular, are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2815385, ~/Articles/ArticleHandler.aspx, 4/1/2015 5:27:49 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...