Earnings reports are coming fast a furious. Microsoft and Facebook reported great earnings sending share up while other companies did not do so well. One thing is for sure which is that traditional value stocks are losing ground to a growing tide of innovative tech companies. This was illustrated in the mixed trading as the Dow finished off 134 points, while the Nasteq had about a quarter percent gain.
The markets today were whacked because of a weak earnings report from 3M. 3M reported weak earnings due to industrial sales slowdowns in China, electronics and automotive sales. The company also lowered forward guidance and a big dollar set aside for environmental litigation. To address the slowing end markets CEO Mike “3M” Roman announced a restructuring effort that will eliminate 2,000 jobs. All the gurus except JP Morgan’s Stephen “the Genius” Tusa were surprised at the results and bolted for the exits sending shares down on heavy volume.
Tesla reported a big earnings miss yesterday as it continues to figure out how to deliver cars on three continents while at the same time building out new plants, developing autonomous driving, wrestling with battery production and now apparently starting up an insurance company since traditional insurance companies are scratching their heads over how to properly underwrite Tesla drivers. Tesla reported a 33% increase in revenues but a per share loss of $2.90 versus a loss of $3.35 in March of last year. Going forward the company said they expected better deliveries in Q2 but face a mountain of challenges. Shares were lower on the day hitting long term support levels. The gurus called the report a “debacle” and see rough sailing ahead.