By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It's Friday so "It's Only Money," a review of the big and not-so-big stories of the week. I'm Maxine Shapiro with KERA Marketplace Midday.
Boy, were we set up going into earning season. It all started the last day of September, when the Dow hit its current low of 9,200. And pre-earning warnings were not warning at all. They were joyful announcements that profits and revenues would be better than previously forecasted. As the season opened, a lot of earnings were better than predicted. By the middle of last week, the Dow hit 9,900. But from then on, the daily influx of earnings reports was good and even great, but not great enough by Wall Street standards. It's that whole "we expect companies to beat the high expectations" and if they only come in a little better, well, it's already in the market and the stock price sells off.
And then comes news from a company like Microsoft. Earnings beat expectations but watch out, corporate technology spending is not picking up. Current quarter orders have slowed. So, as one analysts stressed, if Microsoft isn't seeing resurgence in business, you can't expect the other companies to do any better. Oops.
Locally, Tuesday Morning announced a 60 percent increase in net income. 7-Eleven beat earning estimates, Texas Instruments third-quarter profits more than doubled (big demand for its semiconductor products), Radio Shack and Blockbuster both enjoyed higher profits but the video rental giant projected a bleaker future. Brinker International blamed higher food costs for its disappointing quarter and forecast. Brinker owns Chili's, Macaroni Grill, On the Border, Maggiano's Little Italy and The Corner Bakery. And I suggest they return The Corner Bakery to its original concept, where you see what you're ordering - like the corner bakeries in Italy. Menu prices at all its restaurants will go up 1 percent.
And, you gotta love it: Pizza Hut is out with a new low-fat pie. Test markets have been successful and should be nationwide soon. And it'll cost the same as its gooey, greasy version. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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