Costco and Yum! Miss on Earnings; Alcoa Beats; FB, LNKD, YELP, NFLX Take Beating

Dan Berman
Hot Stock Minute

Costco (COST) is trading lower after reporting earnings this morning. The discount chain missed estimates on both the top and bottom lines. Costco says it made $1.40 a share when expectations were for $1.46. Revenues were also more than $1-billion short of consensus at $31.77-billion. On the positive side, same-store sales rose 3%, and earnings were up a penny a share from a year ago. Costco shares have risen 11% so far this year.

Yum Brands (YUM) has been down more than 6.5%, also on its earnings. Like Costco, Yum missed estimates, with adjusted earnings of 85-cents a share when expectations were for 93-cents. As for sales, they disappointed, falling on the south side of $3.5-billion. Ongoing weakness in China gets the blame. Yum now says a recovery from a chicken scandal at its KFC restaurants will take longer than previously predicted. Prior to this morning's losses, Yum shares were up 7% year-to-date, meaning at this point shareholders would have seen similar returns if they put their cash in a CD.

Alcoa (AA) is bucking the trend and is up more than 3.5% on its earnings. Alcoa did in fact beat with adjusted earnings of 11-cents a share, when analysts were calling for just 5-cents. Revenue was also above consensus at $5.77-billion. Not only was Alcoa recently booted from the Dow. It has been a market laggard this year, down 12% as of yesterday's closing bell.

Finally, we want to focus on a number of stocks in the tech sector which were hit yesterday. Facebook (FB) fell 6.7%, back down below the $50 mark; business networking site LinkedIn (LNKD) fell almost as much, dropping 6.1%; and restaurant review site Yelp (YELP) looked unappetizing, plunging 7.6%. Two other big losers were Netflix (NFLX) which fell almost 5% and Priceline (PCLN) which dropped back below $1,000 a share when it shed 4%.