What to Watch in the Day Ahead - Wednesday, Jan 27
(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 U.S. Federal Reserve's Federal Open Market Committee two-day meeting on interest rate concludes, followed by the statement. (1400/1900) Separately, new U.S. single-family home sales likely rose for a third straight month in December, the latest suggestion that housing remains on firmer footing even as the economy is slowing. According to a Reuters survey of economists, new home sales increased 2 percent to a 500,000-unit pace in December. (1000/1500) The Commerce Department report will come on the heels of data last week showing a strong rebound in sales of previously owned homes in December. Facebook's fourth-quarter earnings is expected to be slightly above consensus, according to Thomson Reuters StarMine. The world's largest social network reported a surprisingly strong profit growth last quarter, helped by a spike in mobile users and advertising. The company has been spending aggressively on hiring and building data centers. Analysts have said the growth in video-views presents the most significant near-term opportunity for Facebook as it looks to grab a bigger slice of the TV advertising market. Boeing posts fourth-quarter results and its first annual tally under Chief Executive Dennis Muilenburg, who took over on July 1. Analysts and investors are looking for confirmation that the 787 program generated positive cash flow in the quarter and that there was an improvement in Boeing's defense businesses, where it has been aggressively cutting costs as budgets shrink. Boeing might announce plans to reduce 777 production rates to reflect the fact that it hasn't sold enough of those to carry it through to the successor 777X model. Boeing said last week it would further cut production of its slow-selling 747-8 and take a charge worth 84 cents per share after tax, prompting analysts to adjust their estimates. Qualcomm is expected to report first-quarter profit above analysts' expectations, according to Thomson Reuters StarMine. The company said it would not break itself up after it delivered its fourth profit warning in November. The chipmaker, which faces intense competition from Taiwanese and Chinese companies, said its agreements with two major Chinese customers were taking longer than anticipated. Investors will look for indications about the state of the chipset business as well as commentary on cost control in the face of the tough competition. Biogen Inc, which leads the U.S. multiple sclerosis market with five drugs for the condition, is expected to report fourth-quarter profit and revenue just above Wall Street estimates. Analysts are worried that the biotechnology company may not be able to meet sales expectations for its oral MS drug, Tecfidera, whose sales have been slowing. Investors will also be looking to see whether Biogen's direct-to-consumer marketing campaign and overall restructuring, announced in October, has borne any fruit. Data storage giant EMC, which is in the process of being acquired by Dell, is expected to post fourth-quarter revenue in line with market estimates, according to Thomson Reuters StarMine. EMC has seen dwindling foreign sales as a result of the stronger dollar and weakness in Asia-Pacific and Latin America. Investors will watch out for the company's forecast for 2016 as well as updates on the structure of the proposed buyout by Dell. PayPal Holdings Inc is expected to report a fourth-quarter profit in line with analysts' estimate, according to Thomson Reuters StarMine, as the payments company continues to struggle with fierce competition from Stripe and Square Inc. Investors remain on the fence about PayPal's customer base. However, analysts expect some upside to revenue from PayPal's partnership with Macy's and are looking for an update on a potential agreement with Visa Inc. E-commerce company eBay is expected to report fourth-quarter profit and revenue slightly above market estimates, according to Thomson Reuters StarMine. Ebay, which raised its full-year earnings forecast in October, also posted a strong profit last quarter that helped allay concerns about its prospects after spinning off PayPal. Investors will want to see if eBay has sustained that momentum in the latest quarter as well, in terms of gross merchandise volume as well as new active buyers. Cessna jet maker Textron Inc is expected to report a rise in its revenue and profit in the fourth quarter on higher sales in the Textron Aviation business. However, investors will be watching the V-22 deliveries at Bell, and for updates on Textron's alliance with Boeing. Investors will also want to see whether slowing demand for business jets impacts the company's bottom line. Also slated to report fourth-quarter is United Technologies, the maker of Pratt & Whitney aircraft engines. Health insurer Anthem Inc reports quarterly results, and the focus will be on any progress it is making with regulators in presenting the case for its acquisition of Cigna. Last week, rival UnitedHealth reported a better-than-expected quarterly profit and said 2016 was off to a great start. Earlier in Jan, Anthem said it expected a higher net profit in 2016 and that it was "optimistic" about getting antitrust approval for the merger. Heart device maker St Jude is likely to report fourth-quarter results short of Wall Street expectations, according to Thomson Reuters StarMine. The company, which reported preliminary results earlier this month, has been seeing lower sales in its cardiac rhythm management business which sells pacemakers and heart failure monitoring systems. The company has said these pressures were partially offset by growth in its neuromodulation business and strong sales from the recently-acquired Thoratec. Norfolk Southern, the No. 4 U.S. railroad, faces a double dilemma as it reports fourth-quarter results. On the one hand, it is struggling to cope with a freight recession and the risk of an industrial recession that threatens the continent's manufacturers. On the other, it is in the middle of a takeover challenge from Canadian Pacific. Investors will be looking for commentary on what the company is doing to successfully navigate the freight downturn and why it presents a better prospect for shareholders as a standalone company. Factory automation systems maker Rockwell Automation is expected to report lower first-quarter sales and profit, hurt by slowing industrial production growth in the energy and mining sectors. Rockwell, which gets nearly half of its revenue from outside the United States, also forecast 2016 sales and profit below analysts average estimate, citing continued weakness in emerging markets. Cliffs Natural Resources Inc is expected to report a loss in its fourth quarter, compared with a year-ago profit. The diversified miner was hurt by a steep fall in commodity prices caused by waning demand from China. The company, which has cut jobs and shut mines to lower costs, exited the North American coal business and is now looking to focus on its iron-ore business in the United States. Separately, oil producer Hess Corp is also expected to post a sharp drop in fourth-quarter profit as tumbling oil prices erode margins across its portfolio. Canadian telecom and media company Rogers Communications will report fourth-quarter earnings just two days after saying it will cut 200 jobs in its margin-squeezed media unit. Canada's wireless market leader is balancing the push to add more mobile phone customers and charging each of them more with the likelihood of fewer cable subscribers for large packages of channels as its cable television business braces for rule changes. Canadian IT services firm CGI Group Inc reports first-quarter results and holds its annual general meeting following what some analysts call a solid finish to fiscal 2015. The acquisitive company is expected to continue its 'build-and buy' growth strategy in 2016. LIVECHAT-US EARNINGS CHAT with Lipper Alpha Insight A Lipper Alpha Insight researcher takes questions on winners and losers in the U.S. reporting season and what may lie ahead for corporate profits amid slowing global markets, slumping oil prices and a strong dollar. (1100 ET/1600 GMT) To join the Global Markets Forum, click here bit.ly/1kTxdKD (Compiled by Astha Rawat in Bengaluru; Editing by Savio D'Souza)
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