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LinkedIn Earnings, Disney's Earnings Magic, and Coca-Cola/Green Mountain Love

By Jack Kramer and Nick Martell – Feb 7, 2014 at 6:00AM

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Good morning, good lookin'... The four things you need to know on February 7th are:

Go ahead... pour yourself a well deserved pre-weekend brew, because after two disappointing performances this week, the Dow (^DJI 2.18%) (finally) surged 188 points Thursday in eager anticipation of Friday's big monthly jobs report.
 
1. LinkedIn earnings "fired" by Wall Street
Endorse these earnings. LinkedIn released an analyst-beating earnings report Thursday after the market closed, with revenues rising to an impressive $447 million last quarter -- that's mostly thanks to a healthy 48% jump in premium subscriptions, even though you only care who's been checking out your profile.
 
So why'd the stock fall? Shares of LinkedIn (LNKD.DL) dropped more than 8% in after-hours trading because Wall Street wasn't excited about the company's outlook for 2014, which was relatively uninspiring. Like your parents, Wall Street cares about your future if you're a public company.
 
The takeaway is that LinkedIn is thinking longer term than 2014 -- it also announced it's spending $120 million on employer-candidate matching technology start-up Bright as it tries to revolutionize the recruiting world. But to many, it's still just a social network for unemployed college seniors trying to network with alums.

2. Coca-Cola and Green Mountain Coffee strike big deal
Coca-Cola is spinning on caffeine and it wants to get involved in the Green Mountain magic. The most recognizable brand in the world, Coca-Cola (KO 2.53%) is buying $1.25 billion worth of fresh new Green Mountain Coffee Roasters (GMCR.DL) shares. Wall Street rated this beautiful Vermont-inspired civil union with two thumbs up.
 
The two companies announced a 10-year partnership that will probably include putting Coca-Cola's products in Green Mountain's famous "K-Cup" form -- but instead of hot coffee, it will be for cold drinks. GMCR's Keurig single-cup coffee machines are dominating office caffeine seekers, and Coca-Cola wants in. Coke also hopes to get in on GMCR's ridiculous stock growth (up 400% since 2009), so it now owns 10% of the company.
 
It's a win-win for the two very different companies (tiny Vermont-based coffee and Globo-megasoda corp). Coke gets a new platform to sell its products, and Green Mountain has a major new investor that will solidify its strategic future (and defend it from intimidating giants like Starbucks). GMCR soared 25% on the news, and Coke was up a happy 1%. 

3. Disney earnings are magical
Thanks to some grade-A pixie dust, shares of Disney (DIS 3.36%) jumped 5.3% Thursday thanks to an earnings report that would make Walt proud. Disney enjoyed a 33% rise in quarterly profit, thanks to a 9% rise in revenues, to $12.3 billion.
 
The hotness behind the numbers is Frozen. That's the company's box office dominating Frozen, a film that cost a hefty $300 million, but brought in more than $1 billion worldwide in the last couple of months. It may be animated, but it's also got more Oscar nods than you.
 
The takeaway is that it's not just one cartoon character feeding Disney's success: Florida, Tokyo, and Hong Kong theme parks had record attendance; sales of Star Wars products pumped up toy sales by 24%; and ESPN (owned by Mickey) enjoyed a 10% gain in advertising.
 
4. Weekly jobless claims surprise economists
The number of the day is 331,000. That's how many Americans applied for first time unemployment benefits during the last week -- and that represents a surprise drop of 20,000 claims over the last week. Boom.
 
The takeaway is that, even though the weekly figure tasted good, investors are hungry for the big serving of monthly jobs data. Friday morning, the legendary Labor Department is serving up its January employment report (chock-full of job gains and unemployment rates).
 
Today:
  • January Nonfarm Payrolls Report (check out last month's job gains and the national unemployment rate)
  • Fourth-Quarter Earnings Reports: Moody's
 
 
As originally published on MarketSnacks.com
 

Nick Martell has no position in any stocks mentioned. Jack Kramer has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola, Green Mountain Coffee Roasters, LinkedIn, and Walt Disney. The Motley Fool owns shares of Coca-Cola, LinkedIn, and Walt Disney. 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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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$34,589.77 (2.18%) $737.24
Walt Disney Stock Quote
Walt Disney
DIS
$97.87 (3.36%) $3.18
Coca-Cola Stock Quote
Coca-Cola
KO
$63.61 (2.53%) $1.57
LinkedIn Corporation Stock Quote
LinkedIn Corporation
LNKD.DL
Keurig Green Mountain, Inc. Stock Quote
Keurig Green Mountain, Inc.
GMCR.DL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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