Hot Stocks To Watch: Netflix, eBay, McDonald’s, Hershey, Baxter

Among the companies whose shares are actively trading in the session are Netflix Inc. (NFLX), eBay Inc. (EBAY) and McDonald’s Corp. (MCD).

Netflix’s ($172.61, +$19.46, +12.71%) third-quarter earnings improved 26%, topping its expectations as revenue and margins grew and subscriber-acquisition costs fell. Subscriber-acquisition costs, a metric closely watched by investors in the online movie rental company, declined 26%. The churn rate–a measure of customer cancellations and free subscribers–decreased to 3.8% from 4.4%.

EBay’s ($27.75, +$2.09, +8.14%) evolution toward becoming a PayPal-focused company continued in the latest quarter as it reported better-than-expected results because of strength in its online payment business. According to eBay, PayPal ended the quarter with 90 million active accounts worldwide, adding more than a million new accounts each month during the quarter. EBay also announced a $2 billion stock buyback as well as plans to issue up to $1.5 billion in term debt financing under the company’s existing shelf registration statement.

McDonald’s ($79.10, +$1.69, +2.18%) third-quarter earnings rose 10% as the world’s largest hamburger chain’s U.S. sales got a boost from its blended-ice beverages and continued international growth. The results beat analysts’ expectations.

Hershey Co.’s (HSY, $48.97, -$2.13, -4.17%) third-quarter earnings climbed 11% as the chocolate maker saw its sales and margins increase. Still, organic sales – a key metric that typically excludes acquisitions and foreign exchange – were below some analysts’ expectations. In a statement, Hershey said the timing of some “seasonal shipments” damped third-quarter sales by about one percentage point. But those shipments were moved to early October and fourth-quarter sales will be higher than expected, the company said.

Children’s Place Retail Stores Inc. (PLCE, $45.52, -$6.36, -12.26%) cut its fiscal third-quarter earnings forecast to account for comparable retail sales falling some 5% so far during the period for the children’s retailer.

Other Stocks In Focus:
AptarGroup Inc.’s (ATR, $44.98, -$2.41, -5.09%) third-quarter earnings rose 40% to beat views, but the product-dispenser maker was downbeat about earnings for the current quarter because of dollar strength and a tough comparison.

Baxter International Inc.’s (BAX, $51.02, +$1.63, +3.30%) third-quarter earnings rose 12% following charges a year ago and as the company cited “improved performance” in a business that includes plasma-based drugs and has been a big source of turbulence this year. Janney Capital Markets raised its stock-investment rating on BJ’s

Wholesale Club Inc. (BJ, $42.82, +$1.57, +3.81%) to buy from neutral, saying it believes the likelihood of a buyout by Leonard Green & Partners, a big stakeholder, is a very real possibility.

Covanta Holding Corp. (CVA, $16.09, +$0.42, +2.68%) third-quarter earnings fell 51% as the renewable-energy company’s growth in operating expenses outpaced that of weaker-than-expected revenue. Adjusting for one-time charges related to an Irish development project and a loan to improve a Pennsylvania facility, core profit rose and beat analysts’ expectations.

Cypress Semiconductor Corp. (CY, $11.78, -$0.61, -4.92%) reported a third-quarter profit following weak prior-year results as demand continues to rebound. But the company’s revenue growth fell short of Wall Street’s expectations.

Danaher Corp.’s (DHR, $43.19, +$1.60, +3.85%) third-quarter earnings surged 84% on a $291 million gain related to the diversified manufacturer’s tool joint venture. Stronger sales and margins also contributed to the results beating analysts’ expectations.

E*Trade Financial Corp. (ETFC, $14.45, -$0.30, -2.03%) posted its second consecutive quarterly profit as the online brokerage again set aside less money for current and future potential losses. But E*Trade, which has been hammered by bad loans made by its banking unit, also felt the pain of a slowdown in trading activity, as daily average revenue trades–or DARTs, a measure of trading levels–plunged 30% from a year earlier, and 26% from the second quarter.

Drug maker Eli Lilly & Co. (LLY, $35.60, -$0.41, -1.14%) said Thursday its third-quarter profit rose 38% from the year earlier period, which was weighed down by an asset-sale charge, while revenue growth was relatively weak.

Fidelity National Financial Inc. (FNF, $13.52, -$1.22, -8.28%) announced Chief Executive Alan Stinson stepped down as third-quarter profit rose 13%, with cost-cutting more than offseting declining revenue. Stinson will remain with the title insurance company as an executive vice president. Fellow title insurer First American Financial Corp. (FAF, $14.31, -$0.66, -4.41%) also declined.

Fifth Third Bancorp. (FITB, $12.88, +$0.48, +3.87%) swung to a third-quarter profit as it set aside much less to cover loan losses.

Source: Dow Jones Newswires