Diamonds and Dogs

11/25/15

Guess who the diamond of the day is? Guess jeans (GES). Guess is trading up 8% this morning after beating earnings estimates last night. The earnings were not spectacular, but the CEO was pleased with third quarter results better than his expectations. Revenue declined by 11.7% year-over-year to $520.96 million, missing estimates of $521.03 million due in part to unfavorable foreign exchange rates. Same store sales decreased 7.7%, excluding the impact of e-commerce sales, at locations in the U.S. and Canada, but the company did raise guidance increasing 2015 fiscal year earnings guidance to 93 cents to $1.02 per share, from the previous outlook of 89 cents to $1.02 per share. Let's hope consumers keep buying new jeans.

Hewlett Packard is a mess. The tech giant recently split into two publicly traded companies, HP Inc. (HPQ) which manages PCs and printers reported consolidated fourth-quarter earnings of 93 cents per share and revenue of $25.7 billion well off the Street view of 96 cents and revenue of $26.4 billion. The unexpected weakness sent HP shares down 13% this morning to new lows. This is the fifth quarter Hewlett-Packard's revenue fell year-over-year, this quarter by 9%. The good news is the other half of HP, Hewlett Packard Enterprises (HPE) run by Meg Whitman which focuses on commercial product systems and software is trading up 3% on better than expected earnings. Looks like Meg picked the right spin off to go with.