What to Watch in the Day Ahead - Thursday, July 30

Wed Jul 29, 2015 2:44pm EDT
 
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(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)