The stock market finally got some reprieve from its recent downward volatility, as investors seemed to take some comfort from some favorable news from the tech sector on the earnings front. As of 11:30 a.m. ET, the Dow Jones Industrial Average (^DJI 0.06%) was up 346 points to 34,644. The S&P 500 (^GSPC -0.22%) had gained 65 points to 4,422, and the Nasdaq Composite (^IXIC -0.52%) had jumped 292 points to 13,831.
Yet when you look at some of the most prominent blue chip stocks announcing earnings on Wednesday, the results were far from universally good. Both Boeing (BA 0.01%) and AT&T (T 1.30%) saw their stocks decline after their latest financial reports. Find out what happened with these two companies and what shareholders found lacking.
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Boeing loses some altitude
Shares of Boeing were down between 2% and 3% late Wednesday morning. The aerospace giant has seen huge challenges over the past two years, and even as conditions in the travel industry have improved, the aircraft manufacturer is still far from seeing things return to their pre-pandemic normal.
Boeing's fourth-quarter numbers were disappointing in many respects. Revenue of $14.79 billion for the quarter was down 3% from year-ago levels. Core losses per share amounted to $7.69, and while that was only about half its per-share loss from the previous year, it signaled the massive challenges Boeing still faces. Full-year results showed similar obstacles, with sales climbing 7% but substantial net losses persisting throughout 2021.
There were some bright spots in the report, though. Boeing delivered 99 commercial aircraft, up from 59 in the year-earlier period. Global services revenue was up double-digit percentages, helping to offset severe declines in revenue at its defense, space, and security segment. Overall, Boeing posted positive free cash flow, eliminating concerns that liquidity could be a problem for the company's long-term survival.
Boeing continues to focus on rebounding, characterizing 2021 as a rebuilding year and celebrating the return to service of the 737 MAX aircraft model in most markets around the world. Lingering issues with the pandemic and the uneven response from countries across the globe in fighting it could lead to ongoing travel restrictions that could hurt airlines and therefore weigh on demand, though, and that seems to be what's bothering shareholders despite Boeing's optimistic views.
AT&T drops the call
Elsewhere, shares of AT&T were down almost 3%. The telecommunications giant posted mixed results in its fourth-quarter report, and investors are still trying to assess how to balance the opportunities from 5G upgrades with the strong competition in the wireless telecom industry.
From a financial standpoint, AT&T held its own. Revenue of $41 billion was down from year-ago levels due largely to divestitures. Adjusted earnings of $0.78 per share were up 4% year over year.
Key metrics also showed slow but notable growth. AT&T added 884,000 net postpaid phone subscriptions during the quarter, bringing its annual count to 3.2 million. New postpaid additions overall came in at 1.3 million for the quarter and 4.5 million for the year. Phone churn rates came in at 0.85% and 0.76% for the quarter and year respectively, with mobility revenue rising 5%.
AT&T also announced 73.8 million subscribers globally to its HBO and HBO Max services, up 13.1 million from 12 months ago. That helped boost segment revenue for the quarter by 15% to nearly $10 billion.
Yet investors seemed discontent with AT&T's guidance. For the full 2022 year, AT&T projected low single-digit percentage gains in revenue. Adjusted earnings should come in between $3.10 and $3.15 per share.
AT&T has become exposed to the media industry through its WarnerMedia holdings, and that niche has gotten hit hard recently. Yet with strong cash flow supporting a dividend yield of nearly 8%, it'll be interesting to see whether income investors see the stock as a good value or a potential trap to avoid.
