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Profits Beat From MasterCard to Exxon as Economy Picks Up

MasterCard Inc. (MA), Cigna Corp. and Exxon Mobil Corp. (XOM) all posted profits that topped analysts’ estimates today, as consumer spending surged and the labor market improved in an otherwise anemic quarter for the U.S. economy.

Beating predictions wasn’t enough for professional-networking service LinkedIn Corp. (LNKD), whose stock sank in late trading after its second-quarter sales forecast disappointed. Expedia Inc. (EXPE) and Wynn Resorts Ltd. also came in higher than anticipated, leaving the pace at which Standard & Poor’s 500 Index first-quarter earnings exceeded estimates at 75 percent for the season so far, according to data compiled by Bloomberg.

Consumer spending rose in March by the most in almost five years as warmer weather brought shoppers back to auto-dealer lots and malls, a sign the U.S. economy is snapping back after growth stalled during a harsh winter. Job data released yesterday also point to a recovery, while manufacturing expanded in April by the most this year.

“Our tone has been fairly optimistic about the labor market in the U.S.,” said Jan Siegmund, chief financial officer at Automatic Data Processing Inc., the private payroll-processing company known as ADP. Job creation is “solid and broad-based.”

Figures from the Roseland, New Jersey-based ADP Research Institute yesterday showed that companies added more workers in April than at any time in the previous five months. Among the bright spots were the South and the oil industry, Siegmund said in an interview yesterday.

LinkedIn, Avon

Technology stocks like LinkedIn, which are valued based on their growth potential, have taken a hit as investors question whether the companies can keep up their revenue expansion. Twitter Inc., among the most expensive Internet stocks, has declined 39 percent this year and this week reported a slowdown in user growth.

About two-thirds of S&P 500 companies have now reported. Viacom Inc. (VIAB), ConocoPhillips (COP) and Yelp (YELP) Inc. topped predictions today, while Avon Products Inc. (AVP) fell short.

Exxon Mobil, the Irving, Texas-based oil company, posted profit that fell less than analysts anticipated as international sanctions against Russian interests clouded efforts to tap some of the world’s largest crude reserves. Meanwhile MasterCard, the second-biggest payments network, benefited from an increase in customer spending and New York-based Viacom gained from channels including Comedy Central.

Yelp Inc.’s quarterly loss was smaller than analysts anticipated and the service for online restaurant and local business reviews boosted its full-year revenue forecast. The shares surged 9.8 percent today.

Companies downgraded expectations coming into the season and two weeks ago analysts predicted that S&P 500 earnings gained just 0.7 percent last quarter while sales rose 2.6 percent, according to data compiled by Bloomberg. As the reporting season progressed, they raised their estimates back to 3.4 percent and 2.8 percent, respectively, as of April 25.

Tomorrow’s main earnings include Berkshire Hathaway Inc., Chevron Corp., CVS Caremark Corp. (CVS) and Estee Lauder Cos.

To contact the reporter on this story: Cecile Daurat in Wilmington at cdaurat@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net Ben Livesey, Cecile Daurat

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