Daily Update: Microsoft Reaches A New All-Time High

STOCK NEWS

Microsoft (MSFT) : reported Q1 EPS of 76 cents which beat estimates 8 cents. Revenues were $22.3 billion which was an increase of 3.0% and beat estimates by $590 million. Productivity and Business Processes revenue increased 6%. Intelligent cloud revenues increased 8%. Within that segment, Azure grew revenues by 116%. Revenues in more personal computing declined 2%. CEO Satya Nadella stated “We are helping to lead a profound digital transformation for customers, infusing intelligence across all of our platforms and experiences. We continue to innovate, grow engagement, and build our total addressable market."

Honeywell (HON) : reported Q3 adjusted EPS of $1.67 which missed estimates by 1 cent. GAAP EPS of $1.60 was in-line with estimates. Revenues of $9.8 billion were up 2% and beat estimates by $20 million. The business was hurt by weakness in aerospace in September. Q3 organic aerospace revenue fell 6% to $3.6 billion because of the impact of sales incentives, weakness in business jets and commercial helicopters, and the competition of space and defense programs. It expects Q4 sales to fall 7%-9% due to weakness in business jets, defense and space areas.

Time Warner/AT&T (TWX) : Time Warner stock is at a 15 year high because AT&T is in advanced talks to take the company over. The deal will be a mix of cash and stock. The mix of cash and stock will be important to whether the deal goes through.

Reynolds (RAI ): British American Tobacco offered to buy the 58% in Reynolds American it doesn’t own for $47 billion cash and shares. British American Tobacco’s proposal is worth $56.50 or 20% above Reynolds’ closing price. British American Tobacco will pay $20 billion in cash and the rest in stock.  
 

ECONOMIC NEWS

There was no economic news today. There also haven’t been any new polls that can tell us if the initial 3 tracking polls which show the election tied are correct. The big news is the AT&T purchase of Time Warner which is probably a bad move. Time Warner’s business is lumpy which adds risk to AT&T’s consistent business. It’s tough to say how this vertical integration provides many synergies. These bizarre deals are what tend to happen at market peaks.