Jim Cramer Blog

All three major market averages fell on the day driven by several lackluster earnings reports and a continued fear of further erosion in the subprime sector. The Dow, Nasdaq, and the S&P all closed down more than -1% on the session. Meanwhile, treasury prices rose sharply on the day as credit market woes sent the yield on the benchmark 10-year note to 4.95%. Prices in the energy complex, which includes crude, reformulated gasoline, and natural gas all fell modestly on the day.

Earnings from some of the biggest firms poured in last night and today. Among them were Citigroup (NYSE: C - News), the world's largest financial services firm, which reported an 18% rise in earnings fueled by a 34% rise in revenues in international markets. Its Q2 earnings, which topped Wall Street estimates by 11 cents, climbed to $6.23 billion, or $1.24 a share, compared to year-ago earnings of $5.26 billion, or $1.05 a share. Revenue rose 20% to $26.63 billion. Shares fell -0.8% on the day in a tough market. Subscribers can read our analysis of Citigroup in today's issue.
Shares of Caterpillar (NYSE: CAT - News) plunged 4.4% after the worlds largest maker of earth-moving equipment reported a -21% drop in earnings driven down by rising costs and falling truck sales in North America. Net income declined to $823 million, or $1.24 a share, compared to year-ago earnings of $1.05 billion, or $1.52 a share. Revenues rose 7.1% to $11.4 billion.
Internet titan Google (Nasdaq: GOOG - News) shocked the street after it reported earnings that missed analyst estimates by -3 cents a share. Its net income, which includes costs such as stock based compensation, rose to $925.1 million, or $2.93 a share. Total revenues rose 58% to $3.87 billion. The 28% rise in quarterly earnings was the smallest since the company went public in 2004. Investors weren't enthused or sympathetic, sending the shares down -5.2%.
Finally after the bell last night, Microsoft (Nasdaq: MSFT - News) reported net income of $3.04 billion, or 31 cents a share. Excluding an 8-cent a share charge related to its Xbox repairs, EPS would have been 39 cents a share, meeting consensus estimates. Revenues rose 13% to $13.37 billion, ahead of the street's estimates of $13.27 billion. The quarter's earnings growth was fueled by sales of its Vista operating system.

By the BullMarket.com Staff

Labels: C, CAT, GOOG, MSFT