What to Watch in the Day Ahead - Thursday, Feb. 5
(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) Global healthcare company Sanofi SA reports fourth-quarter results. All eyes will be on the performance of its diabetes drug in the United States and the hunt for a new boss after Christopher Viehbacher was sacked as CEO when sales missed expectations by a mile in third quarter. Chairman Serge Weinberg has been holding the fort ever since, and in November he said the diabetes business, almost a third of profits, would post little or no growth between 2015 and 2018. Corporate networking website LinkedIn Corp's fourth-quarter results are expected to trump Wall Street expectations, according to Thomson Reuters StarMine data. The company has been benefiting from a booming hiring business as more employers use its services to assess candidates' suitability for jobs. Rapid expansion in international markets such as China is expected to be beneficial. Twitter's revenue is expected to rise a healthy 86 percent year-on-year in the fourth quarter, but the company must boost user growth and engagement on its social media service to win back Wall Street's favor. Twitter has rolled out a slew of new features in recent months, including group messaging and new video capabilities. With Twitter's stock slumping, CEO Dick Costolo is under pressure to show investors that the new features are delivering results and that Twitter has more moves in the pipeline. Trade gap likely narrowed slightly in December, which could project a more optimistic outlook for fourth-quarter economic growth. Falling crude oil prices helped bring down oil imports and narrow the trade gap to an 11-month low in November. The U.S. Commerce Department is expected to report that the December trade deficit was at $38.0 billion from the previous month's $39.0 billion. (0830/1330) Meanwhile, Labor Department issues weekly report on initial claims for unemployment benefits, which likely rose to 290,000 from previous week's 265,000. (0830/1330) Delayed arrival of generic versions of heartburn and ulcer drug Nexium will help AstraZeneca in fourth quarter. The biopharmaceuticals company looks to a brighter long-term future built on the promise of its experimental cancer medicines. Israel's largest company Teva Pharmaceuticals Ltd reports fourth-quarter results. Besides updates on 2015 outlook, investors will be looking for comments on the impact of U.S. Supreme Court's ruling that dealt a blow to generic drugmakers seeking to market cheaper version of Teva's top-selling multiple sclerosis drug. Maker of diesel engines Cummins Inc is expected to report higher revenue and profit for the fourth-quarter helped by higher sales of heavy-duty and medium trucks in the United States. Investors will be looking for company's 2015 financial forecast. Cummins' industrial engines business, which accounts for about 17 percent of annual revenues and has a high exposure to the construction and mining industries in China and other emerging markets, is expected to be hurt by weak capital spending. No. 3 U.S. mobile service provider Sprint Corp's fourth-quarter results are expected to be slightly above analysts' expectation. In November, the company had cut its full-year forecast and announced cost-cutting measures, including job cuts. Beauty products makers Estee Lauder Companies Inc, Coty Inc and Elizabeth Arden Inc report second-quarter results. Elizabeth Arden is expected to post its first quarterly profit after three straight quarters of loss, as analysts say the company exited the holiday season without carrying over too much inventory. While weak sales of celebrity fragrances such as Justin Bieber and Taylor Swift continue to hurt sales, the company is expected to turn to acquisitions to grow, like Estee Lauder, which had four acquisitions last year. Estee Lauder cut its full-year profit and sales growth forecast in November due to weak demand for its skin care products in the United States and China. Both companies are likely to have been hurt by the stronger dollar, which would eat into revenue from international sales and hit sales to tourists in the United States. Market rival Coty Inc is expected to report sales below analysts' estimate, according to Thomson Reuters Starmine. A stronger dollar is likely to have hurt its revenue from international sales, which account for 70 percent of the company's total revenue. Canada's largest oil and gas producer Suncor Energy Inc releases fourth-quarter results. The company recently cut jobs and capital spending and deferred some oil sands projects as a result of the tumble in crude oil prices, and investors will be on the look-out for any further belt-tightening. Cigna Corp, whose health insurance business is largely tied to the employer-based healthcare market is expected to report higher fourth-quarter earnings as the employer market remains stable and government insurance grew. Norton antivirus software maker Symantec Corp is expected to report third-quarter revenue in line with estimates, according to Thomson Reuters StarMine. Slowing PC sales have hurt its security sales alongside sluggish demand for its storage and data management software. The company said it would split into two publicly traded companies, one focused on security and the other storage and backup, potentially making it more attractive to suitors. Federal Reserve Bank of Boston President Eric Rosengren speaks before the Peterson Institute and Moody's Investor Service's 8th Joint High-Level Event on Sovereign Risk and Macroeconomics in Frankfurt, Germany. (0500/1000) Separately, U.S. Treasury Secretary Jack Lew testifies on the White House Treasury budget request before the Senate Finance Committee. (1000/1500) Video game publisher Activision Blizzard Inc is expected to report fourth-quarter results slightly above analysts' expectations, according to Thomson Reuters StarMine. Titles such as Guitar Hero, Warlords of Draenor and Destiny DLC are expected to boost results. Exchange and clearing house operator Intercontinental Exchange Inc is expected to report higher fourth-quarter earnings, with strong energy futures and U.S. cash equities volumes offsetting soft interest rate and equity futures volumes. ICE, which bought NYSE Euronext in late 2013 and then spun off Euronext through an IPO, sold its remaining 6 percent stake in the European bourse operator for $119 million during the latest quarter. Internet radio service provider Pandora Media Inc is likely to report a fourth-quarter profit above average analysts' estimate, according to StarMine data. Last quarter, Pandora raised its full-year 2014 revenue and profit forecasts. Dunkin' Brands Group Inc reports fourth-quarter earnings. Coffee chain's U.S. business likely got a lift from lower gas prices in the holiday quarter, according to analysts. Michael Kors Holding Ltd's third-quarter sales are expected to beat analysts' estimates, according to StarMine. Fast growing company's sales are likely to have been helped by higher demand for handbags during the holiday season. Rivals Coach Inc and Kate Spade said demand rose for luxury handbags during the holidays. Michael Kors, however, is struggling with shrinking margins due to expansion in Europe, and a fall in mall traffic. Investors will be keen on how margins performed in the quarter and any forecast. Action camera maker GoPro Inc is expected to report fourth-quarter revenue above expectations, according to Starmine data, driven by sales of its recently launched Hero 4 camera. Analysts will be looking for its 2015 forecast to see if the company can maintain its growth rate. The action camera market is growing increasingly competitive with other companies launching products at lower price points. For the last couple of quarters, News Corp has been focusing on its book-publishing business to make up for a fall in revenue in its news and information division. Investors will be keen to know how much that impacted its second-quarter earnings. According to Thomson Reuters StarMine data, the publisher of the Wall Street Journal is likely to report results below market expectations. The company's bigger news and information unit has been grappling with lower advertising and subscription sales. One of the world's biggest cement companies Mexico's Cemex, reports fourth-quarter results. The company has benefited in recent quarters from a pickup in building activity in the United States, but the pace of construction in its home market of Mexico has been slow and could still drag on revenue. Nuance Communications Inc, whose voice recognition software runs Siri on iPhones, is likely to report first-quarter results in line with analysts' expectation, according to Thomson Reuters StarMine. Analysts speculate that Nuance could face growth challenges as it transitions to a subscription-based business model. The company is witnessing an uptick in its healthcare business, driven by an improving U.S. economy and the affordable healthcare act. Apollo Global Management LLC is expected to report a decline in fourth-quarter earnings according to analysts. The investment manager failed to beat the cash it generated from assets sales a year ago. Investors will be looking for 2015 guidance. Investment bank and asset manager Lazard Ltd's profit is expected to beat analysts' fourth-quarter estimates, according to Thomson Reuters StarMine. Lazard is expected to benefit from a rise in merger and acquisition activity in the latest quarter. Globally, deals worth $3.48 trillion were struck in 2014, up 47 percent from a year earlier, according to Thomson Reuters data. The M&A market has benefited from a strong stock market and growing confidence among cash-rich companies. Satellite radio service provider Sirius XM Holdings Inc is expected to post fourth-quarter revenue marginally above expectations, according to Thomson Reuters Starmine. Earlier this month, the company said it expected to exceed its 2014 outlook. The company also forecast revenue and net subscriber additions for 2015. Analysts say Yelp Inc's local advertising business is likely to gain market share, helped by a steadily growing mobile user base. The consumer review website operator is expected to report a fourth-quarter profit well ahead of analysts' expectation. Yelp's aggressive promotion of its cost-per-click advertising model has helped it draw more advertising dollars in the last few quarters. As more consumers order food deliveries using GrubHub Inc's online and mobile delivery service, the company is expected to report fourth-quarter revenue slightly above expectations, according to Thomson Reuters Starmine data. Analysts are looking out for first-quarter revenue forecast, as revenue is expected to modestly decelerate sequentially. Onshore rig contractor Patterson-UTI Energy Inc is expected to report a higher fourth-quarter profit, but the focus this quarter will be on the company's forecast. 60 percent fall in oil prices has been weighing on drilling activity in the United States. Driller Helmerich & Payne last week said it may cut 2,000 jobs as it begins to idle rigs. Investors will look out for potential job cuts at Patterson. A slew of oilfield services providers, including Halliburton, Baker Hughes and Schlumberger are cutting thousands of jobs. Nu Skin Enterprises Inc is expected to report fourth-quarter profit and sales above analysts' estimates, according to Thomson Reuters Starmine. The direct-seller of skincare and nutritional products, had forecast a 2015 profit below market expectations as it battles a stronger dollar and regulatory concerns in China, its biggest market. The company received approval to begin direct selling in China in December, investors will be looking for updates on that. Mattress maker Tempur-Sealy International Inc reports fourth-quarter earnings and sales are expected to beat analysts' expectation according to Thomson Reuters StarMine. The company's margins came under pressure in the third-quarter on the face of higher costs, it also cut full-year adjusted profit forecast believing cost trends to continue. The Sealy mattress division, the company's biggest by sales, is expected to do well. Redbox video rental kiosk operator Outerwall Inc is likely to report fourth quarter results ahead of analysts' average estimate, according to StarMine data. The company recently narrowed its fourth-quarter revenue estimate range that came ahead of analysts' expectation. The company also said Chief Executive J. Scott Di Valerio has stepped down and appointed board member Nora Denzel as interim CEO. In November, the company had hiked prices for renting movies and video games at its Redbox kiosks to help fund improvements in its business as streaming sites reduce demand for DVDs. Trucking company YRC Worldwide Inc is likely to report fourth-quarter profit above expectations as pricing continues to be strong. YRC Worldwide's rival, Swift Transportation reported strong results on the back of an expanding U.S. economy that has increased demand for freight services. Investors will be looking for comments on the impact of low gas prices on YRC'S fuel surcharge revenue that could potentially drag profits down. Canada's trade deficit is expected to have widened further in December, likely driven by the recent drop in oil prices. November's deficit jumped to a nearly two-year high due to the cheaper price of crude, a major export for Canada. (Compiled By Astha Rawat in Bengaluru; Editing by Saumyadeb Chakrabarty and Joyjeet Das)
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