Yum! Brands Shares Down Despite Meeting Forecasts
Yum! Brands Shares Down Despite Meeting Forecasts
Strong Dollar Hits General Motors, P&G, 3M; Stocks Slide
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Yum! Brands shares moved lower after the company reported second quarter results after the closing bell on Wednesday despite reiterating guidance for the full year. Of particular concern were 2% sales declines in the U.S. for both Pizza Hut and KFC. Taco Bell U.S. sales rose a modest 2%. Despite the mixed picture on the sales front, the executive team at Yum! Brands has been on a new product innovation roll. On July 25, 2014, at 40 Taco Bell stores in Dayton, Ohio, the company will begin testing its Cantina Power protein menu. The goal here is to get more healthy protein into the mouths of consumers. The test follows the company’s full-fledged entry a few months ago into the breakfast category that McDonald’s has long dominated. Even though Yum! Brands operates some 15,400 U.S. locations via its KFC, Taco Bell, and Pizza Hut concepts, and has been innovating, there are three major developing industry trends that should concern executives at the company in addition to the latest earnings results. TheStreet's Retail Contributor Brian Sozzi breaks them all down.
Another earnings bonanza was highlighting the effect of a stronger dollar on Thursday. General Motors (GM) saw revenue fall nearly 5% as sales in South America, Europe and Russia took a hit on currency exchange. The carmaker said revenue was reduced by nearly $2 billion due to the dollar. Procter & Gamble (PG) saw similar issues with revenue down just under 8%. The owner of brands Tide and Bounty said it expects full-year sales to decline 5% to 6% on currency headwinds. Multinational company 3M (MMM) reported a sales decline of more than 3% and cut 2015 earnings guidance as management expects currency challenges to persist.
TheStreet's Jim Cramer pre-ordered his Apple (AAPL) Watch and says he can't wait to charge it up and start downloading all the apps which will do much more than just tell time. Cramer says he went for a 'James Bond look' because that's who he tries to emulate with his style. The watch comes in Apple's iconic white box but the box is initially a bit of a challenge to open. Cramer says, 'Are you ready Skee-Daddy?' and says, 'I've got one, you don't.' Cramer slipped off his Breitling and replaced it with the new watch on the floor of the New York Stock Exchange. Apple customers who pre-ordered the watch will begin receiving it in the mail on Friday April 24th.
The S&P 500 and Nasdaq closed at new all-time highs on Friday as an earnings-driven rally in shares of Amazon (AMZN), Google (GOOGL) and Microsoft (MSFT) pushed markets higher. Amazon was the best performer on the S&P 500. Wall Street was pleased after the tech giant reported a double-digit increase in quarterly revenue. Xerox (XRX) was the worst performer on the S&P 500, tripping more than 8% after cutting its profit outlook on a stronger dollar. Microsoft led the Dow, reporting strong growth in hardware and cloud computing and beating both earnings and sales estimates in its first quarter. Exxon Mobil (XOM) was among the worst performers on the Dow.
The Nasdaq was the clear winner on markets Friday. The tech-heavy index spiked into record territory as Amazon (AMZN), Microsoft (MSFT) and Google (GOOGL) rallied after reporting earnings. Starbucks (SBUX) was also helping to boost the Nasdaq. The coffee chain generated sales nearly 20% higher than a year earlier as store traffic increased worldwide. Juniper Networks (JNPR) was the second-best performer on the S&P 500, trailing Amazon. Shares rose as the company beat estimates in its first quarter and provided an upbeat outlook for its current quarter. Xerox (XRX) was the worst performer on the S&P 500.
The Nasdaq hit new intraday records as Amazon (AMZN) rocketed higher. The company reported a 15% surge in sales and, for the first time, broke out numbers for its cloud computing business. Investors were excited about the division's performance after revenue jumped 49%. Microsoft (MSFT) also benefited from its cloud computing division as overall profit and sales beat estimates. Microsoft said sales climbed nearly 7% over the quarter. Google (GOOGL) was higher despite missing earnings and sales estimates. The search giant said sales were hurt by a strong dollar with growth of 12% in actual dollars and 17% in constant currency.
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