Mattel Joins Amazon in Earnings Shortfalls as 79% of S&PCécile Daurat
Amazon.com Inc., Mattel Inc. and MasterCard Inc. posted fourth-quarter earnings that missed analysts’ estimates, trimming the ratio of Standard & Poor’s 500 Index earnings that have exceeded projections this reporting season to 79 percent.
With about half of the index already having announced results, the fourth quarter is still on pace to exceed the 75 percent rate achieved in the third quarter, according to data compiled by Bloomberg. While Amazon and MasterCard were hurt by rising costs, Google Inc. topped estimates as retailers spent more on advertising during the holidays.
The results capped a week marked by higher-than-expected earnings from Pfizer Inc., Ford Motor Co. and Facebook Inc. amid signs of improvements in the U.S. economy. Still, disappointing forecasts from planemaker Boeing Co. and EMC Corp. earlier in the week, combined with a slump in emerging-market currencies, rattled investors looking for reassurance that profit growth will continue to accelerate.
Economic data released yesterday showed that consumer spending in the U.S. climbed more than forecast in December even as incomes stagnated, a sign that the economy needs to generate bigger gains in employment to boost the expansion.
The increase in consumer spending “is a good sign for sustaining economic growth,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “Job creation will have to accelerate to sustain the current level of spending.”
Wal-Mart Stores Inc.’s fourth-quarter earnings were probably lower than estimated. The world’s largest retailer, which reports on Feb. 20, said yesterday that profit will be at or below the low end of its forecast range of $1.60 to $1.70 a share. Analysts anticipated $1.65, data compiled by Bloomberg show. The Bentonville, Arkansas-based company was hurt by extra costs in Brazil and lower food-stamp benefits in the U.S.
Amazon, the world’s largest Web retailer, reported Jan. 30 after the markets closed that operating costs rose 20 percent, while sales for the holiday quarter rose the slowest since 2008. Mattel was hit by a drop in Barbie sales, and MasterCard, the Purchase, New York-based payments network, increased spending on rebates and incentives tied to signing deals with card issuers.
Profit growth at S&P companies probably accelerated for a third straight period last quarter to 6.6 percent from a year earlier, estimates compiled by Bloomberg show. The gains helped push the index to a record last year.
Companies scheduled to report next week include Walt Disney Co., Twitter Inc, Time Warner Inc. and Merck & Co. on Feb. 5, followed by Aetna Inc. and Expedia Inc. on Feb. 6.