What to Watch in the Day Ahead - Thursday, April 23

Wed Apr 22, 2015 3:13pm 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) Microsoft Corp, the world's largest software company, is expected to report a sharp fall in third-quarter profit as sales of personal computers remain sluggish and a strong dollar lowers the value of earnings outside of North America. PC sales have been declining for three years and sales in January-March may have been even slower than usual as customers await the rollout of Windows 10 in summer. Investors will be looking for more details on Windows 10 and comments on how the Dow company will make money in the long term from cloud-delivered services.

Search engine giant Google Inc is expected to report higher revenue and profit for the first quarter, although a strong dollar is likely to weigh on results, analysts say. Google, which has been officially accused by the European Union of cheating consumers and competitors, is also being investigated for its Android mobile operating system. Analysts say the latter could prove to be a bigger threat to Google's future profitability.

Diversified manufacturer 3M Co posts its first-quarter results. Given that more than 60 percent of 3M's sales come from outside the United States, investors will be watching for the impact of a strong dollar on the Dow component's results.

E-commerce company Amazon.com Inc will report its first-quarter results amid an improvement in investor sentiment after the company's fourth-quarter earnings beat expectations. A moderation in shipping losses and normalization of international growth rate are likely to benefit Amazon's results. Investors will watch out for comments on the increase in paid membership for Amazon Prime, margin growth in the company's cloud computing arm Amazon Web Services and sales growth in the media business and logistics operations.

Procter & Gamble, the world's largest household products maker, is expected to report profit below the average analyst estimate, according to Thomson Reuters StarMine data, hurt by a stronger dollar. The Dow 30 company, which gets about two-thirds of its revenue from outside the United States, said it was working to localize its supply chain and build manufacturing plants in emerging markets. Investors will look for details on brands that the company expects to sell off and any forecast.

The U.S. Labor Department's data on initial claims for jobless benefits is expected to show a decrease last week after an unexpected rise the week before. (0830/1230) Overall, the current level of unemployment insurance claims still points to a strengthening labor market. Also releasing in the day is the Commerce Department's data on new homes sales, which is expected to show that sales fell to an annual rate of 513,000 units in March from a seven-year high of 539,000 units in February. (1000/1400)

Dow component Caterpillar Inc, the world's largest construction and mining equipment maker, reports first-quarter results. Investors will watch for comments on the U.S. construction market and the impact of falling oil prices and a strong dollar on the company.

Beverage giant PepsiCo Inc reports first-quarter results before the market opens. Competitor Coca-Cola Co reported better-than-expected profit and revenue, helped by price increases in North America.

General Motors Co reports first-quarter results before the market opens. Analysts on average are expecting a profit of 96 cents per share, up sharply from a year before.   Continued...