Earnings, schmearnings. The stock market simply doesn’t care.
After the close yesterday, May 18, Hewlett Packard (HPQ) reported earnings for its fiscal second quarter of 2010 of $1.09 a share. That was 4 cents a share better than Wall Street had projected. Revenue climbed 12.4% from the second quarter of fiscal 2009 to $30.8 billion. That too was above the Wall Street consensus (at $29.82 billion.) And the company raised its guidance for fiscal 2010 to $4.45 to $4.50 a share. That is slightly above the $4.45 Wall Street consensus and well above the $4.37 to $4.44 a share that the company had projected earlier.
The stock market didn’t care.
Shares rose 2.2% in after-hours trading, but gave most of that back once the market actually opened. At 3:30 ET today the shares were up just 26 cents or 0.56%.
Before the stock market opened today, May 19, Deere (DE) reported fiscal third quarter earnings of $1.58 a share. That crushed the Wall Street estimate of $1.09. The company did miss slightly on revenue, reporting $6.55 billion (up 5.8% year-to-year) rather than the $6.62 that Wall Street was looking for. But the company did raise its guidance for all of fiscal 2010 for revenue (to $23.04 to $23.45 billion versus the consensus of $22.46 billion) and net income (to $1.6 billion versus the consensus of $1.38 billion.)
The stock market cared a little more—shares are up 2.33% today as of 3:30 ET. I leave it to you to figure out if a gain of that size is commensurate with Deere’s earnings beat.
Even if the stock market doesn’t care much today, I think these are important earnings results. They show that the U.S. economy is still growing strongly—or at least that it was over the last three months. That bodes well for the economy’s ability to survive the euro crisis and to continue to slowly add jobs.