Diamonds and Dogs
General Motors (GM) revving its engines. GM is jumping 7% on track for the biggest one-day post earnings gain in six years. GM easily beat expectations as revenue rose 6.4% year over year to $35.79 billion, a billion dollars above expectations thanks to strong truck sales. GM is also raising guidance to the high end of the fourth quarter range with potential for upside guidance. GM has offered voluntary buyout packages to about 18,000 salaried workers in North America in an effort to cut costs amid mounting pressures on the global auto business.
Kelloggs (K) serving up some sour milk. Known for their brands like Keebler, Cheez-It, and Pringles in addition to its trademark Kellogg cereals is down 7% after missing earnings estimates and cutting its full-year profit outlook to make new investments in branding and single-serve pack formats in order to counter general consumer trends against packaged foods. Gross margin slipped 220 basis points to 33.9% and adjusted operating profit fell 4% to $471 million due to increased investments in advertising and higher distribution costs.