What to Watch in the Day Ahead - Wednesday, Feb 3
(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) Comcast Corp, the largest U.S. cable operator, is expected to report fourth-quarter revenue above analysts' average estimate, according to Thomson Reuters StarMine. Comcast has benefited from growth in customer additions at its high-speed Internet business. As viewers gravitate toward online video offerings, pay-TV operators including Comcast are battling streaming video services from Netflix Inc and Hulu for subscribers. The U.S. Department of Justice is also investigating whether Comcast is hindering competition in cable advertising sales, Reuters reported in November. General Motor Co reports fourth-quarter and full-year 2015 results. Company executives have already signaled that the carmaker would report robust earnings and maintain a bright outlook for 2016. GM and rival Ford Motor Co have each been reporting results and outlook that show that both companies have come back strong after the 2008 recession. If GM carries out its plan, the once-bankrupt automaker will have returned to shareholders about $23 billion between 2012 and the end of 2017, or about 90 percent of its free cash flow. GM has allied with several companies including ride-sharing Lyft as it attempts to evolve with the transforming transportation industry. Merck & Co is seen reporting slightly lower fourth-quarter sales, hurt by a strong dollar and declining sales of its Remicade arthritis treatment. Investors will be mostly focused on how the company's new immuno-oncology drug, Keytruda, is doing in its ongoing battle with Bristol-Myers Squibb's similar Opdivo treatment for melanoma and lung cancer. Payrolls processor ADP is likely to report that private employers added 195,000 jobs in January, lower than the 257,000 they added in December, according to a Reuters survey. (0815/1315) Separately, the ISM is expected to report that its non-manufacturing sector index slipped to 55.1 in January from 55.3 in December. (1000/1500) MetLife Inc, the biggest U.S. life insurer, is expected to report a slight decline in its fourth-quarter profit as higher interest rates led to losses in its derivatives portfolio. The company has long relied heavily on its substantial derivatives program to hedge against risks that insurers are exposed to such as currency exchange rates, volatile equities markets and changes to interest rates. MetLife announced plans last month to spin off a substantial portion of its U.S. retail business in an attempt to avoid being considered a "too-big-to-fail" financial institution, which need bigger capital cushions. The company, which is in a legal tangle over this label, may provide further details on the initial public offering or sale of the retail business. Yum Brands Inc, the owner of the KFC and Pizza Hut chains, is expected to report fourth-quarter earnings above the average analysts' estimate, according to Thomson Reuters StarMine. The company, which is spinning off its dominant China business, reported a slight rise in sales at established China restaurants in December. The company has also said it will return up to $6.2 billion to shareholders before separating its China business and listing it on the New York Stock Exchange, and possibly in Hong Kong. Investors will look for commentary on sales in the United States, where fast-food companies are promoting aggressively to win back customers, the impending China business spinoff and sales forecast for China. Home and auto insurer Allstate Corp is expected to report a rise in fourth-quarter profit, helped by lower catastrophe losses. Earnings could also be boosted by rising U.S. auto sales, which set a new record for 2015. However, rival Travelers Cos Inc reported a fall in quarterly profit as its underwriting gains fell and the company earned less from its fixed income and energy investments. In its first-quarter results, Keurig Green Mountain Inc is expected to report a profit below analysts' expectations, according to Thomson Reuters StarMine. Europe's JAB Holding Co said in December that it was leading a $13.9 billion buyout of the K-Cup single-serve coffee pods maker to become the biggest player in North America's single-serve coffee market. Keurig has been grappling with slowing sales and has said it is reducing its workforce by about 5 percent to cut costs. Investors will be looking for commentary on the impending deal. U.S. refiner Marathon Petroleum Corp is expected to report a fall in fourth-quarter profit, hurt by the contracting price difference between U.S. crude and globally traded Brent. Diesel prices are also weakening due to falling demand and elevated inventories, hurting margins at refiners such as Marathon. Media mogul Barry Diller's IAC/InterActiveCorp is expected to report fourth-quarter revenue and profit slightly below analysts' estimates. Earlier, the company's online dating service, Match.com, which went public in November, was a big driver of revenue. Investors want to see how the company fares in the absence of the dating business. IAC, which owns Investopedia and video-sharing website Vimeo, reported a fall in its search and applications business in the third quarter. The company has been losing market share and subscribers as it charges customers membership fees to access reviews and ratings on its site that Yelp Inc, TripAdvisor Inc and others provide for free. National Oilwell Varco Inc, the largest U.S. oilfield equipment provider, is expected to post a smaller first-quarter profit as oil producers cut spending due to a steep fall in oil prices. The company, which has been grappling with falling orders for new equipment, has been laying off employees to cut costs. The company said in December it would cut 1,500 jobs in Norway. Aircraft parts maker Spirit Aerosystems Holdings Inc is expected to report higher revenue and profit for the fourth quarter, helped by strong demand for commercial planes. Investors will look for comments on how Boeing's forecast of fewer plane deliveries in 2016 would affect Spirit's financial performance in the year. Take-Two Interactive Software Inc is expected to report third-quarter revenue and profit above analysts' estimates, according to Thomson Reuters StarMine. The videogame maker is expected to benefit from higher-margin digital game sales, the new release of wrestling game WWE 2K16 and continued strength of its flagship Grand Theft Auto. Analysts and investors will look for details on its forecast for 2017 and whether any blockbuster Rockstar game is on the cards after Rockstar North President Leslie Benzies, reportedly responsible for the GTA series gameplay, left the company last month. Shutterfly Inc, which provides personalized photo-based products, is expected to report fourth-quarter revenue and profit largely in line with analysts' expectations, according to Thomson Reuters StarMine. Investors will seek details on the number of customers using the company's online photo-sharing service, which enables users to share, print and preserve their memories. Suncor Energy Inc, Canada's largest oil and gas producer, reports fourth-quarter earnings. Like all oil sands producers, the company endured a torrid three months in which global oil prices continued to slide, although its refining business provided some cushion. Results will give insight into what steps Suncor is taking to survive the weak pricing environment, and so far the company appears to be managing well. Last month, the company struck a deal to acquire rival Canadian Oil Sands Ltd, giving it the biggest stake in the joint venture Syncrude project in northern Alberta, Canada's largest single-source crude producer. LIVECHAT-US EARNINGS with Lipper Alpha Insight A Lipper Alpha Insight researcher takes questions on winners and losers in the U.S. reporting season and what lies ahead for American 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 Maju Samuel)
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