CORRECTED-What to Watch in the Day Ahead; Thursday, July 31
(Corrects Goldcorp item to say investors will want an update on two development projects, not three. The Cerro Negro project started production this week.) Dow component Exxon Mobil is expected to report a jump in second-quarter profit helped by rising natural gas prices and increasing production, when it reports before markets open.
Debit and credit card company MasterCard is expected to post a higher second-quarter profit helped by an increase in card usage, as more people turn to plastic instead of cash to make purchases. However, the company's stellar growth has been slowing and a strengthening U.S. dollar, which is likely to hit cross-border transactions, could hurt its results. Investors will look for comments on the developments in Russia and how close the company is to signing up local partners that will help it avoid paying a hefty security deposit to continue operating in the country.
The U.S. Labor Department will issue its weekly update on new applications for unemployment insurance. It will also release the employment cost index for the second quarter. Analysts expect that U.S. labor costs rose 0.5 percent in the April-June period this year. The Chicago Purchasing Manager Index, which likely saw business in the Midwest pick up in July, will be released later in the day. Independent oil and gas company ConocoPhillips is due to report second-quarter earnings that were likely lifted by higher prices for crude oil. The company will also update investors on its effort to grow more lucrative production from North American shale formations, including the Eagle Ford in South Texas. Separately, Occidental Petroleum is expected to report a bigger second-quarter profit helped by higher prices for crude oil and natural gas in the United States. Investors will look comments on the sale of a stake in its Middle East business, which the company announced last year. Consumer products company Colgate-Palmolive, whose products are marketed in over 200 countries and territories throughout the world, is scheduled to report second-quarter earnings before markets open. In the previous quarter, the company reported a 16 percent drop in profit, hurt by a one-time charge related to the fall in value of the Venezuelan Bolivar. Refiner Marathon Petroleum's second-quarter results are likely to be hurt by weakness in the Gulf Coast market, which accounts for 62 percent of its total capacity. Investors will look for comments on condensate exports after the U.S. Commerce Department allowed two energy companies to export condensate, or minimally processed crude, last month.
Over the past three quarters, Time Warner Cable has steadily slimmed down its video subscriber losses, a trend expected to continue when the company reports second-quarter results. The company had said it would increase its annual capital expenditure over the next three years to stem subscriber losses and boost revenue.
Analysts expect satellite TV provider DirecTV to face headwinds in subscriber growth due to competition from cable TV service providers when it reports second-quarter results. Cable operators such as Time Warner Cable package video and internet services to help drive subscriber growth. However, analysts expect an increase in DirecTV's net subscriber additions in Latin America - the company's largest growth area. T-Mobile is due to report second-quarter earnings. The company added more subscribers than all its competitors combined last quarter, but still reported a loss. Investors will look to see if the company can post a profit next quarter and continue luring subscribers with its aggressive discounts. Analysts say that while the discounts have been instrumental in attracting customers, they have come at a steep cost to margins and are not sustainable. Canadian miner Goldcorp is expected to report flat second-quarter earnings on the back of a little changed gold price. Investors will want an update on the company's two development projects - Eleonore and Cochenour. Delphi Automotive, in the news recently because it supplied the recalled General Motors ignition switches that have been linked to the deaths of at least 13 people, will post second-quarter results. Delphi has largely dodged the negative publicity that has hit GM since early this year. Professional social network LinkedIn's revenue is expected to grow a healthy 40 percent in the second quarter. Investors will, however, be eager for details on how the company's efforts in its mobile and talent solutions businesses, as well as an international push highlighted by a recent expansion into China, will help the company grow in the coming quarters. Cable services provider Charter Communications is expected to report second-quarter earnings. In the previous quarter, the No. 4 U.S. cable company reported a 15 percent jump in revenue due to a rise in the number of residential video subscribers. The company said it gained 18,000 residential video subscribers in the first quarter, compared with a loss of 25,000 a year earlier. Electric carmaker Tesla Motors is expected to forecast its third quarter and rest-of-year performance when it reports second-quarter earnings after market close and then holds a conference call with investors and reporters hosted by CEO Elon Musk. After a dip last fall to $116 when investors were concerned about reports of fires in the batteries of Tesla's Model S cars, the stock has regained momentum. Investors will look for hints on the progress toward production of the Model S, the upcoming Model X that is expected to go on sale in 2015, as well as updates on the Tesla battery factory that will dwarf its existing plants. CME Group, the largest U.S. futures exchange operator, is set to report quarterly earnings amid a slump in volume. In the second quarter, average daily volume fell 12 percent from a year earlier as part of a broad slowdown in trading. CME is expected to update investors on its first overseas exchange in London, which has seen a slow start since it launched in April. Spain's biggest bank, Santander, is scheduled to report second-quarter earnings. The lender may update investors on how its offer to buy out minority shareholders in Brazil is going, and how the Brazilian unit is performing. Santander has also bet big on a Spanish recovery to drive what it has said will be a strong earnings turnaround. It is still unclear if that will bear fruit quickly. Cigna, which sells health insurance and focuses on large corporate customers, is scheduled to report second-quarter earnings that are expected to rise. The report comes as corporations begin to consider changes to their health plans for 2015. Valeant, trying to take over Botox maker Allergan, is due to report second-quarter results before markets open. Valeant has been under attack from Allergan for its acquisition-based business model and will be keen to show that it can produce organic growth and be more transparent in its reporting, two key criticisms by its target. Investors will also look for updates on efforts by Allergan shareholder Pershing Square to call a special shareholder meeting and turf most of Allergan's board. Valeant is also hoping to sway shareholder advisory firms ISS and Glass Lewis to recommend the special meeting and/or its bid, and investors will listen for any update on those efforts. TransCanada Corp, Canada's No.2 pipeline operator, is expected to report relatively flat second quarter earnings. Mitsubishi UFJ Financial Group, Japan's largest lender by assets, will announce its April-June results. The company is expected to report a sharp fall in profit from a year earlier, when an Abenomics-driven stock market rally pushed up the value of its equity holdings. Japan's second-largest bank by assets, Mizuho Financial Group, will also announce April-June results. Like its rivals, it is expected to report sharp fall in profit due to the absence of strong stock-related gains from the market rally. Media company Discovery Communications is expected to report second-quarter earnings slightly below the analysts' average estimate, according to Thomson Reuters SmartEstimate. Some analysts expect lower ad revenue in the United States, Discovery's largest market. Brazilian miner Vale is scheduled to post second-quarter results. Also on the radar are Embraer's quarterly results. The world's third-biggest commercial jet maker's best quarter for regional aircraft deliveries in two years likely lifted revenue and profit. Further signs of recovering demand for business jets and a swift certification of the 12-seat Legacy 500 could also boost Embraer shares back to the all-time highs touched last month. Phosphate and potash producer Mosaic is expected to report second quarter results that were likely pressured by soft prices. Investors will look for an update on the health of CEO Jim Prokopanko, who took a leave of absence after being diagnosed with cancer and any update on the company's plans to cut costs. Drug wholesaler McKesson is scheduled to report first-quarter results. In the previous quarter, the company's profit rose, exceeding the average analysts' estimate, thanks to strength in its distribution and technology solutions units. Apache Corp, which is being targeted by activist-investor Jana Partners, is scheduled to report second-quarter results. Investors are keen to see if the oil and gas company provides any details on its efforts to whittle down its liquefied natural gas holdings, as well as its efforts to grow output in the Permian Basin. Kellogg, due to release second-quarter results, has been battling stiff competition from rivals such as General Mills and cheaper private-label brands. Kellogg has also come under fire from health groups in the United States for the amount of sugar content in its cereals for kids. Sales at its U.S. cereals business, which includes Corn Flakes, Froot Loops and Special K, have fallen in the past four quarters, as many consumers switch to other breakfast items, such as egg sandwiches and yoghurt. Investors will be keenly watching out for any improvement in sales trends. Payment transfer company Western Union's profit may drop due to sluggish remittance volumes amid a tepid European job market and regulatory issues that have been haunting the company. The company's position in Mexico, one of its biggest markets, has weakened after it was forced to close nearly 7,000 agencies due to compliance-related issues. Online travel agency Expedia is expected to report higher second-quarter results as it books more hotel stays. Analysts on average expect earnings of 76 cents a share, compared with 64 cents a year earlier. Asset manager Invesco is scheduled to report second-quarter results before the markets open. Analysts expect the money manager to earn 59 cents a share, up from 50 cents a share a year ago. Cosmetics maker Avon has taken several steps to return to profit, including cutting about 600 jobs. The direct seller has posted losses in five of the past six quarters as key markets such as Russia, Latin America and the United States faced several issues. Investors will want to know whether the company's results show signs of improvement as it reports second-quarter results. They will also look for additional cost-cutting measures and details on a bribery probe. Auto parts maker BorgWarner has benefited from strong demand for its turbochargers, which help make automobiles more fuel-efficient, as automakers try to conform to new, more stringent emission standards. BorgWarner raised its 2014 earnings forecast in May, citing rising demand for its all-wheel drive systems and dual clutch transmission modules along with turbochargers. When the company reports second-quarter results, analysts will look for an update on its forecast for the rest of the year. Bunge, one of the world's biggest agricultural trading houses, reports earnings with an eye toward massive crops growing in the United States. Big autumn harvests will increase supplies available for storage, shipment and processing. However, supplies are tight ahead of the harvest and a decline in grain prices will likely hurt as farmers will hold on to their next crops rather than selling them. Timken, a maker of ball bearings, is expected to a report lower revenue and profit for the second quarter, as it spun off its steel business, which contributed 30 percent to revenue in 2013. Investors will want to know how the spin-off will affect margins at the company's larger business, which has been making an increasing percentage of its profits from manufacturing bearings that go into automotive transmissions, aircraft landing wheels and machine tools. 3D printer maker 3D Systems is expected to report second-quarter earnings below analysts' average estimate, according to StarMine data. Investors will be interested in any update on new product launches, which are expected to help the company achieve its full-year forecast. Panel maker SunPower is likely to report a lower second-quarter profit on a fall in sales of solar plants. The company has said that it will hold more projects on its balance sheet to determine whether to sell them or drop them to a yield company. Investors will be looking for details on the potential yield co and also for details on a possible separation of the company's residential business. The market debut of General Electric's private-label credit card unit, Synchrony Financial, the largest IPO of the year so far, could test investors' faith in a consumer-led U.S. economic recovery. The initial public offering of 125 million shares, or 15 percent of Synchrony, is expected to raise up to $3.3 billion at the high end of the expected range of $23-$26. Synchrony is expected to be valued at up to $21.59 billion at the high end of expected range. Blackstone Group-backed Catalent's initial public offering is expected to be priced between $19 and $22 per share, valuing the health technology company at about $2.57 billion at the top end. The company provides advanced delivery technologies for drugs, biologics and consumer health products. Catalent's IPO of 42.5 million shares is expected to raise about $935 million at the top end of its price range. Offshore drilling contractor Transocean Partners' IPO is expected to raise about $368 million, valuing the company at up to $1.45 billion. The company reported a jump of 75 percent in its net income to $63 million for the quarter ended March 31. Chile's central bank is scheduled to release the minutes from its July monetary policy meeting, when it cut the interest rate by 25 basis points. The market was split ahead of the vote and will look keenly for any sign which way the wind is blowing, particularly with regard to inflation concerns. Chile's national statistics institute is scheduled to give jobless figures for the April to June period. While still low by historic standards at 6.3 percent last month, there are signs it is beginning to rise. Brazil releases its budget balance figures. The country's public finances have deteriorated rapidly under President Dilma Rousseff, leading Standard & Poor's to downgrade the country's sovereign debt rating closer to junk status earlier this year. The primary balance is a gauge closely watched by investors because it measures a country's ability to service its debt. (All analysts' estimates are according to Thomson Reuters I/B/E/S/) (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Simon Jennings)
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