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Pence Wealth Management Financial Markets Report


  • Wall Street opens flat on mixed earnings as underwhelming results from tech giants Google and IBM were offset by upbeat quarterly numbers from the likes of Morgan Stanley, Goldman Sachs and GE.
    • Twenty-five companies in the S&P 500 report earnings today.
  • GE industrial profits rise 12 % that beat analysts’ estimates. First-quarter net earnings fell to $3 billion from $3.53 billion a year ago, when the company’s results were boosted by its sale of NBCUniversal. Revenue fell 2 % $34.18 billion. Analysts were looking for $34.36 billion.
    • Revenue in its two largest industrial segments, aviation and power and water, each rose 14 %, while its oil and gas division posted a 27 % increase to $4.3 billion. The aviation unit posted a revenue of $5.78 billion. GE Capital’s revenue was down 8 % to $10.5 billion.
    • Infrastructure orders were unchanged at $23.7 billion, while the order backlog grew to $245 billion on increases in every business line.
    • GE’s profit margins for its industrials businesses, a closely watched measure, improved to 13.4 % from 12.9 % a year earlier.
  • Google first-quarter revenue misses Wall Street targets as the price of its ads continued to decline. Google’s revenue climbed 19 % to $15.42 billion in the first quarter from $12.95 billion in the year-ago period. Analysts had estimated $15.54 billion. It posted $3.45 billion in net income compared to $3.35 billion in the year-ago period.
    • The number of “paid clicks” by consumers on Google’s ads increased by 26 % in the first quarter, disappointing some analysts that had hoped for stronger volume growth.
    • The average “cost per click” declined 9 %, extending a downward trend as mobile advertising, typically cheaper than traditional online ads, make up a bigger slice of its business.
    • Google still top pick for Wall Street, despite mobile ad challenges. Most analysts kept their “buy” rating on the stock. Of the 46 analysts covering Google, 35 have a “buy” or equivalent rating on the stock. Nobody has a “sell”.
  • IBM’s quarterly revenue sinks to 5-year low as hardware sales fall. IBM’s sales declined for the eighth straight quarter, making it harder to meet CEO’s profit goal for the year. Total revenue fell 4 % to $22.5 billion in the first quarter, below analysts’ average estimate of $22.91 billion.
    • Hardware revenue plunged 23 % to $2.4 billion, while systems storage revenue also fell 23 %. Only software business showed some growth, with revenue rising 1.6 % to $5.66 billion.
    • Revenue in the Americas fell 4 %, while revenue from Asia Pacific countries dropped 12 % and declined 11 % in emerging markets such as Brazil, Russia, India and China.
    • Net profit fell to $2.38 billion from $3.03 billion a year earlier.
  • Severe winter weather dampens DuPont’s farm sales. Sales in the agriculture business, DuPont’s biggest, fell 6 %, the first decline in ten quarters, due to lower demand for seeds and herbicides in North America.
    • Operating earnings fell 5 % to $1.44 billion in the agriculture business. DuPont, however, backed its full-year 2014 operating earnings. Revenue fell nearly 3 % to $10.13 billion, missing market estimates of $10.45 billion.
  • PPG Industries’ quarterly revenue rose 17 % to $3.6 billion. Net income rose 40 % to $277 million from the same quarter last year. Sales volume grew 5 %, more than double recent quarters.
    • PPG board of directors also authorizes $2 billion share repurchase program today.
  • Kansas City Southern revenue rises on higher grain shipments. Railroad operator Kansas City Southern reported a 10 % rise in first-quarter revenue, helped by higher shipments in its agriculture business.
    • Revenue rose to $607.4 million from $552.8 million, while revenue at the company’s agriculture business jumped 40 %. Net income fell to $94 million for the quarter from $104.2 million a year earlier.
  • Agricultural product shipments boost Union Pacific profit. Union Pacific, the largest publicly traded U.S. railroad, reported a 14 % rise in quarterly profit as it increased prices and shipped more agricultural products.
    • Revenue at the company’s agricultural business, which ships a range of products such as frozen food, beer, oils and whole grains, rose 16 %. Total revenue rose 6.6 % to $5.64 billion. Analysts had expected revenue of $5.70 billion.
    • Net income rose to $1.09 billion from $957 million a year earlier.
  • Kinder Morgan Energy Partners reported a strong first quarter and increased the distribution for the 51st time since current management took over in February of 1997. It raised its dividend 6 % to $1.38.
    • First quarter net income before certain items was $788 million compared to $655 million for the same period in 2013.
  • American Express profit rises 12 % as its credit-card customers spent more in a recovering U.S. economy. Leash on expenses helps AmEx counter muted user spending.
    • The world’s biggest credit card issuer’s net income rose to $1.43 billion for the first quarter from $1.28 billion a year earlier. Total revenue, net of interest expense, rose 4 % to $8.20 billion.
    • American Express, which issues its own cards unlike rivals such as Visa and MasterCard, benefits from its largely affluent customers’ consistent spending and low default rates.
  • Morgan Stanley profit soars on wealth management and trading. Net income rose 49 % to $1.45 billion compared with $936 million a year earlier. Revenue climbed 4 % to $8.8 billion, making Morgan Stanley the only U.S. bank among the six biggest to post a first-quarter increase from a year earlier.
  • Goldman Sachs profit falls 11 % but beats estimates. Net income fell to $1.95 billion in the first three months from $2.19 billion in the same period of 2013. Total net revenue fell 8 % to $9.33 billion, but beat the average estimate of $8.70 billion.
  • Philip Morris profit tops estimates on higher prices. Net income fell 12 % to $1.88 billion from $2.13 billion a year earlier. Revenue excluding excise taxes fell 8.8 % to $6.92 billion, trailing analysts’ $7 billion average estimate. Cigarette shipment volume fell 4.4 % to 196.0 billion units in the quarter.
  • UnitedHealth says first-quarter profit fell on reform costs. UnitedHealth Group, the largest U.S. health insurer, said net profit was $1.1 billion compared with $1.2 billion a year earlier. That beat estimates. It had 44.67 million medical members at the end of the quarter, down from 45.45 million at the end of 2013, due to declines in the commercial business. UnitedHealth stuck by its previous forecast for 2014 earnings and said it sees revenue growth of about 5 % to $128 billion to $129 billion.
  • Snack sales help PepsiCo beat profit estimates. Overall revenue was $12.62 billion, above the $12.43 billion Wall Street was expecting. Net income was $1.22 billion, up from $1.08 billion a year earlier.
  • Wal-Mart Stores is launching a new domestic money transfer service called “Walmart-2-Walmart” in partnership with Euronet Worldwide subsidiary Ria Money Transfer, competing directly with Western Union. Western Union shares were down 7.1 %.
  • Home Depot puts a lid on new-store openings and focusing its expansion efforts on e-commerce.


  • U.S. jobless claims hover near pre-recession levels. Initial claims for state unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000 for the week ended April 12. They stayed close to a 6-1/2 year low touched the prior week. Economists had forecast first-time applications for jobless benefits rising to 315,000.
    • The claims report showed the number of people still receiving benefits after an initial week of aid dropped 11,000 to 2.74 million in the week ended April 5. That was the lowest level since December 2007.
  • Fed’s Yellen says rates will need to rise as recovery takes hold. Yellen said on Wednesday the U.S. economy was making “very meaningful progress” toward full employment but had some way to go yet.


  • Europe’s car sales upturn fails to halt price war. Registrations rose 10.4 % in March.
  • Mexican mobile phone operator sues IBM for $2.5 billion, accusing the U.S. technology giant of making fraudulent representations that caused it to lose $2.5 billion in profits. The lawsuit was filed in federal district court in New York.


  • Benjamin Franklin, U.S. patriot, diplomat, and a signer of the Declaration of Independence, died in Philadelphia (1790)
  • Geraldine Mock became the first woman to fly solo around the world (1964)
  • The Apollo 13 astronauts safely splashed down after their near-disastrous flight (1970)

Sources: Reuters, Bloomberg.

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. 

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