Nike Beats Earnings Expectations
On Thursday, in after-hours trading, the shares of Nike Inc. (NYSE:NKE) increased 4.05%, or 3.98, to trade at 102.30. In fact, the company closed the trading session as the 2nd biggest gainer on the Dow Jones Industrial Average, (DJIA). This increase came after Nike reported earnings which beat Wall Street estimates. For the fiscal third quarter, Nike reported earnings of 89 cents per share on $7.46 billion in revenue. This beat forecasts for earnings of 84 cents per shares on sales of $7.62 billion. Also, net income climbed 16% to $791 million. Despite the positive earnings, the sports apparel retailer reported sales figures that came in lower than expected. This came as a result of a stronger U.S. dollar (USD) which negatively impacted Nike’s sales figures. The reason for this is that in the previous quarter, Nike generated more than half of its revenue outside North America. During the December earnings call, Nike President and CEO Mark Parker stated that a strengthening greenback relative to key global currencies will pose a challenge for the sportswear maker. So far this year, the U.S. dollar (USD) has already advanced 10% against other major currencies. In the last year, Nike shares have climbed 24%. .
With all the hype surrounding the policy statement of the U.S. Federal Reserve on Wednesday which pushed the S&P 500 index (SPX) to its highest close in 2 weeks, U.S. stocks declined on Thursday. At the close of trading, with energy stocks and oil prices declining, the SPX fell 0.5%, or 10.23 points, to settle at 2,089.27. Also on the downside was the Dow Jones Industrial Average (DJIA) which declined 0.7%, or 117.16 points, to 17,959.03. During the trading session on Thursday, this blue chip index was down by as much as 142 points. Also, Apple Inc. (AAPL, -0.10%) took the spotlight on Thursday as the tech giant made its debut on the DJIA, closing 0.8 percent lower on the day. Breaking the downward trend was the Nasdaq Composite index (COMP) which advanced 0.2%, or 9.55 points, to close at 4,992.38. This tech-heavy index has advanced for 4 straight sessions so far this week. In economic news, the weekly jobless claims report for the week ended 14 March missed expectations of 290,000 and came in at 291,000. Philadelphia Fed’s manufacturing index also came in weaker than anticipated yet this seemed to have very little impact on the markets.
It seems that there is not much that can keep the U.S. dollar (USD) down and on Thursday, the greenback traded higher. This came despite poor data which showed that the Philadelphia manufacturing activity in March had expanded at the slowest pace in thirteen months. According to their report, the Federal Reserve Bank of Philadelphia reported that its manufacturing index declined from a reading of 5.2 in February to a ready of 5.0 in March. Despite the negative economic news, the dollar traded higher against the euro (EUR) with EUR/USD down 2.26% and trading at 1.0622. The euro weakened ahead of talks to discuss Greece’s bailout by the European Union after Martin Schulz, the European Parliament President, already warned that the financial situation in Greece is ‘dangerous’ especially with the looming debt payments. In other currency trading, the USD traded higher against the British pound and the yen with GBP/USD down 1.68 percent to 1.4730 and with USD/JPY up 0.65 percent at 120.89. Also, the U.S. dollar index was at 99.58, up 2.25 percent.
The oil price rollercoaster is clearly not over yet and on Friday in Asian trading, crude oil prices rebounded slightly. This comes as investors are now waiting for Friday's Weekly Rig Count report from Baker Hughes (NYSE:BHI), an industry group, regarding the number of active oil rigs in the U.S. Meanwhile on Thursday, crude oil futures declined sharply and this came after investors shifted their focus from the monetary policy statement from the U.S. Federal Reserve to the global oil supply glut. In the Globex electronic session on the NYMEX, light sweet crude futures for April delivery, which will expire on Friday, traded down 0.7%, or 31 cents, at $43.65 a barrel. Meanwhile, Brent crude oil for delivery in May declined 1.49 percent, to trade at $54.42 a barrel on Thursday on the Intercontinental Exchange (ICE).