Positive Earnings Show From All 5 DJIA Components (T, MCD, MRK, MMM, TRV)

We have seen earnings from five of the thirty DJIA components this morning alone.  All were above expectations, even if some of the year over year comparisons do not look that great at some.  We had AT&T Inc. (NYSE: T), McDonald’s Corp. (NYSE: MCD), Merck & Co. (NYSE: MRK), 3M Co. (NYSE: MMM), and The Travelers Companies, Inc. (NYSE: TRV) all on deck.  We included estimates from Thomson Reuters for comparison, as well as performance and relative color where applicable.

AT&T Inc. (NYSE: T) beat its expectations.  Earnings were $0.54 EPS vs. $0.55 EPS a  year ago and estimates were $0.50 EPS.  Revenues are down about 2% from a year ago to $30.86 billion vs. $30.86 billion estimates.  Wireless subscriber additions were 2 million to 81.6 million, including some 3.2 million iPhone activations.  It added 240,000 uVerse customers.  Shares are trading up by 3% at $26.75.

McDonald’s Corp. (NYSE: MCD) posted third quarter earnings of $1.26 billion, or $1.15 EPS, up from $1.19 billion and $1.05 EPS in the same period a year ago.  Revenue fell by 4% to $6.05 billion.  The golden arches said that U.S. same store sales rose by 2.5% and global same store sales rose by 3.8% as Europe was up 5.8%.  The company also sees positive same store sales in Q4 and said it is starting from a position of strength.  It is still hard to not notice the company’s comments about a slowdown in global casual dining, particularly as Mickey-D’s is the face of that sector and should be perhaps the last give-up and is arguably even the trade-down destination.  Shares are trading up by 2% at $59.70.

Merck & Co. (NYSE: MRK) posted $0.90 EPS vs. $0.82 estimates and sales were $6.05 billion (up from $5.944 billion a year ago) versus estimates of $6.0 billion.  Merck now sees 2009 earnings in a range of $3.69 to $3.89, but non-GAAP range is $3.20 to $3.30.  Estimates for 2009 are $3.23 EPS.  Shares are trading up by almost 1% at $33.00.

3M Co. (NYSE: MMM) posted earnings a 4.3% decline to $1.35 EPS on a 5.5% drop in revenues of $6.2 billion versus estimates of $1.17 EPS and $5.77 billion in revenues. 3M is also raising guidance to $4.50 to $4.55 EPS for 2009, up from a prior range of $4.10 to $4.30 EPS. Shares are indicated up about 1%.  Shares are trading up by 2.2% at $78.01 (new 52-week high).

The Travelers Companies, Inc. (NYSE: TRV) beat earnings and raised its dividend 10% to $0.33 per quarter and approved a $6 billion buyback in additional shares on top of its prior buybacks.  The financial giant posted non GAAP earnings of $1.61 EPS and $1.65 headline EPS on revenues of $6.327 billion versus estimates of $1.31 EPS and $6 billion in revenues.  Travelers is also hiking guidance for 2009 to $5.30 to $5.50 EPS vs. a prior range of $4.80 to $5.05.  Net income here was $935 million vs. $214 million a year ago.  Shares are trading up by 4% at $49.97.

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JON C. OGG
OCTOBER 22, 2009