The S&P 500 inched up to a fresh record Wednesday, while the Dow (DJINDICES:^DJI) dipped 27 points on some major mixed earnings reports.
1. Facebook hits all-time high after earnings
Step aside if you've been doubting Facebook (NASDAQ:FB) founder Mark Zuckerberg lately. Facebook's second-quarter revenue rose 61% from last year to $2.91 billion, sending the stock to an all-time high above $71 per share in after-hours trading.
Why are investors giddy like high-schoolers whose parents just gave them permission to join Facebook? Because of mobile. Facebook's mobile users have grown by 40% from last year, resulting in mobile ad revenue rising 67% over that period. That makes Facebook second behind Google for mobile ad dollars, with 22% of the market share.
The takeaway is that even your mom knows the world is going to smartphones over desktops -- and although Facebook stock struggled after its failed IPO on worries it wouldn't figure out mobile ads, investors now like what they're seeing. Next, Wall Street thinks Facebook's move will be a "Buy" button that lets you buy your buddy's cheap sunglasses directly from your newsfeed.
2. Boeing profits soar, but stock doesn't
We promise you we won't use any more cliché take-off/landing analogies to describe the second-quarter performance of aircraft-maker Boeing (NYSE:BA). The good news is that Boeing profits popped 52% from last year as revenue rose 1% to just over $22 billion last quarter thanks to big demand for commercial jets.
So why'd the stock fall 2.4% Wednesday? One big military contract problem. Boeing's earnings report surprised investors with news that wiring problems on some KC-460 tankers (aka "Pegasus") that it's building for the Air Force cost the company $425 million. Too bad they can't just send in Bob Villa or your impressively handy roommate "Dave."
The takeaway is that Boeing stock has been turbulent recently. Boeing shareholders are hoping that the 7% jump in commercial airline orders can compensate for the 5% decline in defense revenues.
3. PepsiCo's poor soda sales saved by snacks
Pepsi's got munchies, and Coke doesn't. Westchester N.Y.-based PepsiCo (NASDAQ:PEP) reported second-quarter earnings that beat estimates thanks to Fritos, Tostitos, and Ruffles (the good stuff). North American soda sales were down (same for Coca-Cola), but the company's snack foods were a hit, especially in Latin America.
The takeaway is that Americans are reducing soda consumption. This could have been a game-ender for Britney Spears' former top endorsement giver, but its diverse non-soda offerings like Gatorade and chips are growing and rescuing the company.