What to Watch in the Day Ahead - Thursday, July 30
(The Day Ahead is an email and PDF publication that includes the day's major stories and events, analyses and other features. To receive The Day Ahead, Eikon users can register at . Thomson One users can register at RT/DAY/US. All times in ET/GMT) The two U.S. personal care products companies, Procter & Gamble Co and Colgate-Palmolive Co, report results for the fourth-quarter and second quarter, respectively. Both companies, with big operations outside the United States, have been working to reduce the impact of a stronger dollar on sales. While Colgate has raised prices in emerging markets, P&G is setting up manufacturing plants there to localize supply chain activities. Both companies are expected to beat analysts' estimates on revenue, but miss on profit, according to Thomson Reuters StarMine. Investors will be keen on any forecast updates and changes in strategy. The Commerce Department's data is likely to show the U.S. economy expanded at a much faster pace in the second quarter. The gross domestic product is projected to have risen at a 2.6 percent annual rate in the April-June quarter, compared with a contraction of 0.2 percent annual rate in the January-March quarter. (0830/1230) Meanwhile, the number of Americans filing new applications for unemployment benefits is expected to have advanced 15,000 to a seasonally adjusted 270,000. (0830/1230) Separately, the U.S. Census Bureau will issue "Advance Report: U.S. International Trade in Goods" for June, which will contain statistics for international trade in goods on a Census basis by principal end-use category. Amgen Inc is expected to report higher second-quarter sales and profit and may revise its full-year forecasts. Investors will be looking for details on the company's plans for the European launch of its recently approved injectable cholesterol treatment, as well as its expectations for the drug's U.S. approval and launch in the coming weeks. Cigna Corp, which agreed to be bought by larger rival Anthem Inc, is expected to report a rise in second-quarter profit. The company specializes in employer-based healthcare. Mondelez International Inc, the maker of Cadbury chocolate and Oreo cookies, is likely to report second-quarter sales below analysts' average estimate, according to Thomson Reuters StarMine. The company has been grappling with volatility in markets such as Europe, where sales have fallen for the last three quarters. Sales in North America were also weak last quarter partly due to a strategy change by Wal-Mart to reduce in-store displays, which hurt impulse-driven buying by customers. Investors will be looking for updates on the company's discussion with Wal-Mart to "revisit" the strategy change, as well as on market conditions in Europe and progress on the sale of its French coffee brand Carte Noir. Cable provider Time Warner Cable Inc, which is being bought by Charter Communications, is expected to report second-quarter revenue slightly below analysts' average estimate, according to Thomson Reuters StarMine. Last quarter, the company added 30,000 residential video customers, its first increase since 2009 and well above analysts' estimates, indicating a turnaround for the company. Analysts are looking for any update on the deal, future investments and guidance. LinkedIn Corp, the professional social network is expected to report second-quarter revenue slightly above analysts' average estimate, according to Thomson Reuters StarMine. Investors will keep a close watch on the company's hiring business, in which revenue growth slowed to 36 percent in the first quarter. The business, called Talent Solutions, accounts for about 60 percent of total revenue. Investors will also look for commentary on expansion in China, given the heavy competition and the recent stock market rout in the country. Finnish network equipment maker Nokia Corp reports second-quarter results on the same week it is expected to finalize a deal to sell its HERE map business to Germany's premium car makers for between 2.5 billion and 3 billion euros. Nokia is shedding HERE as part of efforts to focus on integrating its planned acquisition of France's Alcatel-Lucent. Broadcom Corp, the wireless chip maker is expected to report better-than-expected profit and revenue for the second-quarter, according to Thomson Reuters StarMine. The company has been benefiting from strong demand for Apple Inc's iPhone 6, launched last September, and Samsung Electronics Inc Ltd's Galaxy S6, launched in April. Investors will be looking for details on whether Broadcom's exit from the baseband chips business is creating competitive disadvantage due to the lack of a 4G product. T-Mobile US Inc, the No. 4 U.S. wireless carrier, is expected to report second-quarter revenue ahead of analysts' average estimate, according to Thomson Reuters StarMine, helped by customer wins who are drawn to its low cost plans. The company's profit, however, is expected to take a hit from costs related to an aggressive marketing campaign. Last quarter T-Mobile unveiled its "Mobile without Borders" plan, which offers free calling, texting and high-speed data services at no extra cost, for certain U.S customers traveling in Mexico and Canada. The move is aimed at helping it compete better with AT&T Inc, which is strengthening its presence in Mexico. Electronic Arts Inc, the video game publisher known for titles such as "FIFA" and "Madden NFL", is expected to report first-quarter profit above analysts' average estimate, according to Thomson Reuters StarMine. EA is expected to benefit from its fast-growing digital business, which includes Internet-distributed software. Investors, analysts and gamers alike will be looking for details on its biggest release of the year, "Star Wars Battlefront", which comes out in mid-November before the Star Wars movie. The company is also expected to benefit as players upgrade to the current generation of consoles and as it gains ground in mobile devices. Online travel services company Expedia Inc reports second-quarter results. Expedia said it sold its entire stake in online travel company eLong to rival Ctrip.com International and others for about $671 million, after struggling with mounting losses at the Chinese company. CME Group Inc reports second-quarter earnings, after closing its open-outcry futures trading pits because of the shift of volume to computers. A year on from the soccer World Cup, the world's largest beer maker Anheuser Busch Inbev SA is unlikely to experience much of a bump in volumes in Brazil in the second quarter. Still the company has forecast a growth of premium lagers there, growing sales in Mexico and China and better performance in the United States, which may mean a lesser decline, rather than growth, than in 2014 after having reported falling volumes in all but one of the past six years. Diageo plc, the world's largest spirits company, reports full-year results. There will be questions about recent changes in management, including its chief financial officer going to run North America. A replacement CFO has not been named yet. ConocoPhillips, the largest independent U.S. energy company, reports second-quarter results. The company said it will reduce future spending on deepwater drilling due to low crude oil prices, and also raise its dividend. U.S. refiner Marathon Petroleum Corp is expected to report a higher second-quarter profit, helped by strong margins. Gasoline crack spreads, the difference between crude oil and gasoline prices, have risen on weak crude prices and robust gasoline demand. The company expanded into natural gas processing with its $15.6 billion acquisition of MarkWest Energy Partners LP announced earlier this month. Investors will for details on the company's expectations for the natural gas processing business. U.S. refiner Valero Energy Corp is expected to report a rise in second-quarter profit, helped by robust demand for gasoline and a steep fall in oil prices. Gasoline crack spreads, the difference between crude oil and gasoline prices, have risen, boosting profit margins at Valero and other refiners. Goldcorp Inc, the world's most valuable gold miner, is expected to report a decline in second-quarter earnings, as the price of bullion continues to drop. With one of the lowest production costs among major gold producers, Goldcorp is expected to weather the low prices, but analysts will watch for any dividend reduction or mine expansion delays. Oil producer Penn West Petroleum Ltd is expected to announce a second-quarter loss, compared with a year-ago profit, hurt by weak oil prices. Investors will look for comments on the company's plans to improve liquidity, cut costs and possible asset sales. Canadian fertilizer maker Potash Corp of Saskatchewan Inc reports second-quarter results. The friendly pursuit by the company of German rival K+S tops the interest of investors and analysts in the fertilizer sector, and Potash CEO Jochen Tilk will be asked about his next move toward a potential $8-billion deal. Canada's Cameco Corp, one of the biggest uranium producers in the world, reports second-quarter results. Of interest is any update on production guidance for Cigar Lake, its newest mine in northern Saskatchewan. The company has said forest fires have not affected operations. Fiat Chrysler Automobiles NV reports second-quarter results. Investors will be looking out for comments/details on the company's progress to improve its profit margins in North America as it seeks to offset weakness in Latin American and Asia. Investors will also be hoping to get more flavor on the upcoming listing of Ferrari, any attempts at attracting potential merger partners such as General Motors, and the total impact expected from recall actions and regulatory fines announced in recent days. Delphi Automotive Plc will reports second-quarter results, followed by an investor call with CEO Kevin Clark and CFO Mark Murphy. Executives will discuss the company's growing presence in the rapidly emerging market for self-driving cars. Starwood Hotels & Resorts Worldwide Inc is expected to post second-quarter profit and revenue below analysts' average estimate, according to Thomson Reuters StarMine. The hotel operator, which has been transitioning into an "asset-light" strategy, has sold properties worth about $1.5 billion over the past two years. Investors will be looking for updates on strategic and financial alternatives announcement made last quarter. Western Union Co, the world's largest money-transfer company, is expected to report a second-quarter profit, helped by higher fees from its money-transfer services. Western Union is expected to face stiff competition from digital payment processor PayPal after its acquisition of digital money transfer company Xoom. The company has cut prices and invested heavily in its online and mobile businesses to better compete with fast-growing rivals Xoom and privately owned Boom Financial. Scientific instruments maker PerkinElmer Inc will report marginally better-than-expected second-quarter earnings, according to Thomson Reuters StarMine, helped by strong demand for its screening tests for newborns in developing markets. The company, which also sells environmental and food safety testing equipment, had cut its full-year earnings forecast in April due to a stronger dollar. The company, which gets more than half of its revenue from sales outside the United States, may raise its full-year guidance. Tempur Sealy International Inc, the world's largest bedding maker by revenue, is expected to report second-quarter profit above analysts' average estimate, according to Thomson Reuters StarMine, benefiting from higher sales in North America. Tempur Sealy removed its Chief Executive Mark Sarvary in May, two days after shareholders voted to remove him from the board. Investors will be looking for updates on the search for a new CEO, changes in strategy under its newly formed board as well as any changes to full-year forecasts. Cybersecurity firm FireEye Inc reports second-quarter results. The company has benefited from governments and businesses ramping up spending to protect their networks from increasingly sophisticated attacks. Investors will look for signs of higher demand and updates on sales of its on-premise equipment. Specialty truck maker Oshkosh Corp is set to report third-quarter results. Last month, the company had cut its profit forecast for the quarter and for the year, citing bad weather and product launch delays. Investors will be looking for comments on the currency headwinds in its machinery business and new product launches. Outerwall Inc, the operator of Redbox video rental kiosks, is expected to post a second-quarter profit above analysts' average estimates, according to Thomson Reuters StarMine. Outerwall, which also operates coin-exchange kiosks under the Coinstar brand, has been reining in costs in recent quarters to combat a decline in DVD rentals as people switch to streaming movies. Outerwall has also been ramping up its ecoATM brand of electronics recycling kiosks, which have contributed to revenue growth. Investors will look for any updates to the company's plans and forecast for the remainder of 2015. Virgin America Inc's U.S. focus has insulated it from the effects of a strong dollar, which crimped revenues this year at its rivals with international exposure. The company is also not a party in the Justice Department's investigation into whether some U.S. airlines worked together illegally to keep air fares high by signaling plans to limit flights. Still, investors across the industry have voiced concern that airlines are not cutting capacity fast enough to match slowing domestic demand. When Virgin America reports its second-quarter results, investors' focus will be on the company's capacity forecast for the rest of the year and whether lower fuel costs have been able to offset rising costs and wages. Coal miner Arch Coal Inc is expected to report a bigger second-quarter loss, hurt by tepid demand for both steel-making coal and thermal coal. The company is reportedly in talks with restructuring advisers as it seeks to reduce its debt. Depressed coal prices for the last four years have forced rivals such as Walter Energy Inc and Patriot Coal to file for bankruptcy in the last two months. Mexico's central bank is expected to hold its key rate at 3.0 percent, thanks to tame inflation and despite a dramatic tumble in the peso to a new record low this month. Most of Mexico's central bankers think inflation will remain below their 3 percent target for the rest of the year because of the sluggish economy. LIVE CHAT: A look at U.S. asset valuations with David Berson, chief economist at Nationwide Consumption data in the United States may not be painting a rosy a picture of the economy as the employment stats, but stocks are frothy and bonds, despite pulling back some over the summer, are still at lofty levels. Are investors pricing U.S. assets accurately? Join Nationwide Chief Economist David Berson to discuss the U.S. economy in the Global Markets Forum at 9:00 ET/13:00 GMT. To join the Global Markets Forum, click here: bit.ly/1kTxdKD (Compiled by Sourav Bose in Bengaluru; Editing by Savio D'Souza)
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