Diamonds and Dogs
With the market volatility, we're all dreaming of a better market with today's diamond, DreamWorks Animation (DWA). DreamWorks rose 4% today on an upgrade to outperform from market perform by FBR & Co. analyst. The upgrade comes on the heels of its deal with Netflix which gives the streaming giant global rights to DreamWorks TV content and full access to its film library. Thanks to the Netflix deal, the FBR analyst raised his earnings estimates going forward. The analyst also raised his price target on DreamWorks to $29 from $22. Shares of DreamWorks rose 15.4% over the course of last year, outperforming the S&P which fell 0.7%.
If Alcoa is any indication, earnings won't be so hot. Alcoa (AA) is kicking off earnings season with less than stellar numbers. The stock is down 9% to a new 52 week even though the New York City-based aluminum producer reported adjusted earnings of 4 cents per share, ahead of analysts' estimates for 2 cents a share. The big problem was revenue down 18% to $5.25 billion for the quarter as aluminum prices plunged more than 25% during the past year. Revenue missed analysts' expectations for $5.29 billion. Last week, the company announced that it would shutter one of its largest U.S. aluminum smelters and idle production at a Texas-based alumina refining plant. Additionally, Alcoa will split into two publicly-traded companies during the second half of this year to create one commodities producer and one aluminum technology company with an aerospace focus. Management seems to be trying to create more shareholder value, but so far it hasn't worked.