Nike Beats Estimates and Projections for Auto Industry Sales Remain Positive

Here are two of the big headlines in the markets today.

Jun 27, 2014 at 1:30PM
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The Dow Jones Industrial Average (DJINDICES:^DJI) at 1:30 p.m. EDT was trading 65 points lower, or 0.38%, as investors remained passive while economic data continues to send mixed signals, yet no other options seem to offer investors any upside to equities.

"The market is listless with earnings and data coming in mixed, but stocks in general continue to look attractive relative to bonds, and we're fairly priced from a historical perspective," said David Katz, chief investment officer at Matrix Asset Advisor, according to Reuters. "That should be enough to continue driving buyers, even with disappointing news." 

With that in mind, here are some companies making headlines in the markets today.

Kicking things off, Nike (NYSE:NKE) was trading 1.3% higher to stand as the Dow's best-performing component so far today. The athletic-apparel and footwear maker reported quarterly results that topped estimates as demand for its products rose amid heavy marketing ahead of the World Cup.

Nike's revenue in North America jumped 10% higher to $3.29 billion in the company's fourth quarter, which ended May 31. Even better, Western Europe's year-over-year result checked in 18% higher, excluding the impact of currency headwinds.

The sporting-goods maker posted net income of $698 million, a 5.4% increase over last year's fourth quarter. Nike's gross margin improved 170 basis points to 45.6% of sales, which emphasizes that the company's powerful brand and pricing power remain healthy.

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Ford's F-Series trucks will remain the best-selling vehicle in the U.S. Source: Ford.

Outside of the sports world, projections are coming in for next week's release of June new-car sales data from automakers in the United States. Overall industry sales are expected to decline by roughly 3%, according to Edmunds.com, though that doesn't tell the whole story. 

Because this month has two fewer selling days than June 2013, and three fewer than this year's May, the sales results face tough comparisons. When adjusted for the number of selling days, June's sales are expected to be 5%-6% higher than last year's result, according to J.D. Power.

Even better for investors trying to gauge the health of the automotive industry, J.D. Power projects that retail sales will reach 1.1 million in June, which is 6% higher than last year's June, when adjusted for selling days. Retail sales are the most important factor when assessing the end consumer demand for new vehicles.

"The U.S. auto market is arguably in the best position and health it has been in since well before the great recession," said Jeff Schuster, senior vice president of forecasting at LMC Automotive, in a press release. "Sales are robust and stabilizing above a 16-million-unit pace and are back in balance with production levels, keeping inventory in check. While GDP growth remains below ideal levels, the auto market continues to be instrumental in helping drive the economy."

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Daniel Miller has no position in any stocks mentioned. The Motley Fool recommends Nike. The Motley Fool owns shares of Nike. 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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