U.S. investors are still using the oil market as a guide for their trading activities, so it’s little wonder that the main indices plunged together with oil prices today. Mixed earnings results did not help, as the Dow fell by more than 250 points during the first hours of trading. In this article we’ll take a look at the earnings reports of Alphabet Inc (NASDAQ:GOOGL), Dow Chemical Co (NYSE:DOW), Mallinckrodt PLC (NYSE:MNK), Pfizer Inc. (NYSE:PFE), and Ally Financial Inc (NYSE:ALLY) and how investors have reacted to the numbers.
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Alphabet Inc (NASDAQ:GOOGL) shares are up this morning after the company’s latest quarterly report beat analyst estimates. The parent company of Google released its fourth quarter results yesterday after the closing bell, reporting revenue of $21.33 billion and a profit of $8.67 per Class A share. Analysts, meanwhile, had predicted $8.10 per Class A share on the back of $20.77 billion in revenue. Sales rose by 18% year-over-year, spurred by Google’s core businesses: web search, YouTube and its Android mobile operating system. Alphabet also announced that it will increase its share buyback program by another 514,000 shares. The stock jumped in after-hours trading by nearly 9% within minutes of the earnings report, making Alphabet the most valuable U.S company. Shares are currently up today by 5%.
Hedge funds from our database love Alphabet Inc (NASDAQ:GOOGL), as 129 of them reported ownership of its Class A shares as of September 30, while 119 of them reported holding Class C shares (NASDAQ:GOOG) (there is some overlap of investors among the two classes of shares). Tiger cub Andreas Halvorsen is one of Google’s biggest fans, with his fund Viking Global holding 2.53 million Class A shares and 1.12 million Class C shares at the end of the third quarter.
Shares of Dow Chemical Co (NYSE:DOW) are up by a little over 1% following better-than-expected fourth quarter results. The company posted a profit of $0.93 per share, easily beating Wall Street’s estimate of $0.70 per share. Revenue came in at $11.46 billion, topping analysts’ expectations of $11.24 billion. One key factor for such a good performance was the weakness in the energy market, which allowed Dow Chemical to save a lot on the oil it acquired as raw material.
Among the funds we follow, Dan Loeb‘s Third Point stands out as a result of its activist efforts to convince the management of Dow Chemical Co (NYSE:DOW) that breaking the company up would enhance shareholder value. Dow is currently in the midst of a merger process with E I Du Pont De Nemours And Co (NYSE:DD), after which the newly created entity will break up into three separate companies. In general, hedge funds tended to distance themselves from Dow Chemical during the third quarter, with the total number of long positions dropping to 56 from 65 during the quarter.
The shares of Irish pharmaceutical giant Mallinckrodt PLC (NYSE:MNK) are also surging this morning as investors gained confidence following the company’s latest quarterly report. After yesterday’s closing bell, the stock was down by more than 15% since the start of the year. Today the stock has regained some of the lost ground, advancing by as much as 9.6%. Back to the earnings report: Mallinckrodt registered $914.8 million in revenue and a profit of $2.09 per share for the first-quarter of fiscal year 2016. Analysts, on the other hand, were expecting just $1.81 in earnings per share and revenue of $905.7 million. Mallinckrodt’s management used the opportunity to update their fiscal year 2016 guidance, with them now expecting earnings in the range of $7.85 to $8.30 per share, having previously projected $7.70-to-$8.20 per share.
At the end of September, roughly 21% of Mallinckrodt PLC (NYSE:MNK)’s common stock was held by 40 top hedge funds in our database, down from 43 a quarter earlier. Billionaire John Paulson holds a significant position in this company, with his fund, Paulson & Co, having reported ownership of 6.59 million shares in its latest 13F filing.
Head over to the next page to see how investors reacted to the latest numbers reported by Pfizer and Ally Finance.
Pfizer Inc. (NYSE:PFE) is trending slightly lower today, mainly due to a disappointing 2016 outlook. The latest quarterly report topped analysts’ estimates, despite profit falling by half year-over-year. Fourth quarter revenue rose by 7% to $14.05 billion, above estimates of $13.61 billion. Adjusted for non-recurring costs, earnings stood at $0.53 per share, just above expectations of $0.52 per share. Pfizer was severely affected by the strong dollar, having registered in one instance an $806 million charge for currency devaluation. What put investors off today was the weak forward guidance, with the company looking for earnings between $2.20 and $2.30 per share, whereas Wall Street analysts were hoping for $2.36 per share. Pfizer’s revenue estimates of $49 billion-to-$51 billion were also below analysts projections of $52.49 billion in revenue.
Pfizer Inc. (NYSE:PFE) is also among the darlings of the hedge fund world, with 97 of the funds followed by Insider Monkey owning its shares. Ken Fisher is betting big on Pfizer, and increased his position by 1% over the third quarter. His fund, Fisher Asset Management, held 31.9 million shares at the end of September, then valued at more than $1 billion.
Solid growth in auto sales helped Ally Financial Inc (NYSE:ALLY)‘s profit soar during the fourth quarter. One of the largest U.S auto lenders, Ally Financial reported an increase in consumer auto originations to $9.3 billion from $9.0 billion a year before. Net income rose by 49% year-over-year to $263 million or $0.52 per share, surpassing analysts’ estimates of $0.51 per share. Forward guidance, however, fell below Wall Street’s expectations, as Ally Financial anticipates a 15% increase in profits to $2.30, while analysts were projecting $2.37 per share. The stock has dipped into the red this morning, currently down by roughly 1%, having already slumped by 12.5% since the start of the year.
Within our database, 57 elite hedge funds held 36% of Ally Financial Inc (NYSE:ALLY)’s outstanding stock at the end of the third quarter. Stephen Feinberg made a huge bet on this stock, having pledged nearly 70% of his public equity portfolio’s capital to this one investment. According to its latest 13F filing, Cerberus Capital Management held 41.5 million shares of Ally Financial, unchanged over the third quarter.