GM Joins Aetna in Shortfalls as 76% of S&P Earnings BeatCécile Daurat
General Motors Co. and Aetna Inc. posted earnings that fell short of analysts’ estimates today, reducing the ratio of Standard & Poor’s 500 Index profits that beat predictions this reporting season to 76 percent.
With two-thirds of the results out for last quarter, the pace remains higher than the third quarter’s 75 percent rate, data compiled by Bloomberg show. GM, the Detroit-based carmaker, lost money in Asia outside of China and further restructured in Europe, while insurer Aetna was hurt by rising Medicare costs.
Today’s earnings followed mixed results yesterday after the close, with Walt Disney Co. trumping estimates with its hit film “Frozen” and Twitter Inc. showing a drop in usage in its first report as a publicly traded company. S&P profit growth still probably accelerated to 8.3 percent last quarter, the data show, and is predicted to expand to 8.5 percent in 2014 as the labor market and consumer spending continue to improve.
“We see a very healthy job market out there,” said Jan Siegmund, chief financial officer at Automatic Data Processing Inc., the payroll-processing company known as ADP that releases national employment numbers for the private sector. “Our assessment of the economy is solid.”
ADP pays about one in six workers in the U.S. and administers health-care benefits for 15 million Americans. The Roseland, New Jersey-based company reported earnings and sales that exceeded estimates yesterday, driven by new clients and additional services.
“It’s a very good signal for us,” Siegmund said in a telephone interview. “We’re adding new business to our recurring stream of revenue.”
New York Times Co. and 21st Century Fox Inc., the film and TV company controlled by billionaire Rupert Murdoch, both saw stock gains after posting results today. Fox, whose earnings were in line with predictions, benefited from rising programming fees. Times Co.’s advertising sales declines abated, helping the New York-based newspaper publisher top estimates.
Materials stocks also jumped -- as much as 3.5 percent for the Bloomberg Americas Building Materials Index -- following higher-than-anticipated results from Vulcan Materials Co., the largest U.S. producer of sand and crushed stone, and USG Corp., a maker of wallboard.
Companies that have topped earnings predictions this season ranged from Facebook Inc. to Ford Motor Co., Visa Inc. and Goldman Sachs Group Inc. For some industries, beating estimates didn’t translate into a daily stock gain, according to data compiled by Bloomberg. While industrials members had an aggregate earnings surprise gain of 3.1 percent, the stock movement was a drop of 0.3 percent, the data show.
Among the about 23 percent that missed were Amazon.com Inc., Merck & Co. and Altria Group Inc., the maker of Marlboro cigarettes.
Cigna Corp. and Moody’s Corp. are scheduled to report tomorrow, followed next week by Loews Corp., CVS Caremark Corp., Cisco Systems Inc., Kraft Foods Group Inc. and Whole Foods Market Inc.