October 20, 2014 / 6:39 PM / 4 years ago

What to Watch in the Day Ahead - Tuesday, Oct. 21

(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) Verizon Communications Inc, the largest U.S. wireless carrier, reports third-quarter earnings. The company has maintained its lead in the U.S. market and is expected to bring in over 1.2 million customers. Investors will be looking for details on iPhone subscribers, Verizon’s competitive strategy on price cuts moving forward, as well as indications of its strategy in two upcoming wireless spectrum auctions. Property and casualty insurer Travelers Companies Inc is expected to benefit from smaller catastrophe losses and higher premium income when it reports results for the third quarter before the bell. The company has aggressively raised insurance prices in the past several quarters to offset low interest rates affecting its fixed-income investments. As pricing continues to decelerate in the commercial insurance sector, investors will be keen to get a view of the company’s average renewal price rate increase. The company’s results are a bellwether for the property and casualty insurance industry. There isn’t much “I’m lovin’ it” happening at McDonald’s Corp these days. The fast-food it pioneered is falling out of favor in the United States at the same time that competition from direct rivals and the likes of Chipotle is increasing. Europe, its biggest market for sales, is soft and political intrigue has led to store closures in Russia. And, if that isn’t enough, its fast-growing China market has been hobbled by a supplier scandal that has pummeled sales. The company reports third-quarter results before the market opens and is an important gauge of consumer spending around the world. Coca-Cola Co is scheduled to report third-quarter earnings. Investors have been agitating for the soda giant to cut costs amid weakening sales of carbonated soft drinks. The National Association of Realtors releases existing home sales data for September. Economists polled by Reuters forecast sales increasing to a 5.10 million-unit pace from the 5.05 million units in August (1000/1400). Yahoo Inc Chief Executive Marissa Mayer’s honeymoon is officially over, with activist investor Starboard recently demanding that the company merge with AOL, cut costs and quickly find a way to monetize its valuable Asian assets and return the cash to shareholders. Two years into her tenure, Mayer has yet to deliver any boost to the company’s stagnant revenue. When Yahoo reports its third-quarter earnings, Mayer will be under pressure to show investors that she has a viable plan to turn the company around and for how to spend billions of dollars in proceeds from Alibaba IPO - otherwise more investors may join Starboard in calling for a change. Lockheed Martin Corp is expected to report another quarter of strong earnings despite weaker revenues, with foreign sales rising strongly. But investors are still waiting for the company to finalize a $4 billion contract for a next batch of F-35 fighter planes that was expected months ago. When the company gives its third-quarter results before the bell, it will also be watched for details on budget cuts. United Technologies Corp, one of the rougher stock performers the past few months among diverse U.S. industrial manufacturers, tries to assure investors about its growth prospects when it reports third-quarter results. The major supplier to the aerospace and commercial building industries faces questions about growth in China, a large market for its Otis elevators unit, and about how quickly its Pratt & Whitney jet engine division can profit from its new engine for commercial jets. Canadian Pacific Railway Ltd is expected to report another set of solid quarterly results. Much of the investor and analyst focus, however, will likely be on comments from a special conference call being hosted by veteran railroader and CP CEO Hunter Harrison. The company, after stating on Monday it had ended merger talks with U.S. rival CSX Corp, said Harrison will be hosting a separate conference call after the regular earnings call to discuss the need for rail mergers in North America and the need for a comprehensive North American railroad policy. Virtualization software maker VMware Inc is likely to report a third-quarter profit above market estimates, according to StarMine, helped by new license sales and contract renewals. Activist investor Elliott Management is also piling pressure on VMware’s parent EMC Corp to spin off the software maker, imitating other technology companies, in an attempt to become more agile and capitalize on faster-growing businesses. Investors will be looking forward to management’s commentary on spin-off prospects and growth outlook. Broadcom Corp posts its third-quarter results as investors worry that slow demand pointed to by Microchip last week could spread across the chip industry. Wall Street will also be looking for more details of how Broadcom plans to grow its connectivity business after recently giving up on baseband cell-phone chips. Advertising company Onmicom Group is likely to report a third-quarter profit above analysts’ estimates, according to StarMine, helped by higher ad spending in the United States. In July, the company said it was sticking with its annual organic revenue growth target, showing little effect from its aborted $35 billion merger with France’s Publicis Group. Investors will look forward to updates on full-year forecast and management commentary on ad spending trends. Intuitive Surgical Inc is expected to report lower third-quarter profit as constrained hospital spending continues to hurt sales of its expensive da Vinci surgical robot systems. Investors will be looking for any sign of improvement from the once fast-growing company as well as updated revenue and procedure forecasts. Oilfield services company Nabors Industries Ltd is expected to report a jump in third-quarter profit as spending in North American shale fields proves to be resilient despite weak crude prices. Nabors, which owns the world’s largest land-drilling rig fleet and pressure pumping equipment for fracking, is expected to benefit from increased drilling activity in Texas’ Permian Basin and North Dakota’s Bakken shale field. Investors will look for any forecast or commentary about demand being impacted by the steep slide in global crude oil prices. Kimberly-Clark Corp, maker of Kleenex tissues, will report third-quarter results as U.S. household products makers struggle with a stronger dollar, tough competition and choppy growth in developed markets. Kimberly-Clark, which also makes protective disposable medical equipment for healthcare workers, has said it saw a 20-30 percent rise in demand compared with the same time period last year due to the Ebola scare. Investors will look for the impact of Ebola on the company’s forecast. They will also look for updates on its planned spin off of its healthcare business. Illinois Tool Works Inc, a maker of vehicle parts and transportation equipment like fasteners and polyester coatings, is expected to report a third-quarter profit, bolstered by a surging U.S. auto market. The company sold its industrial packaging unit this year, which could improve its organic revenue growth, analysts say. Investors will look for comments on any possible divestitures as the company continues to try and shed its less profitable businesses. Credit card issuer Discover Financial Services’ third-quarter results are expected to top estimates, according to StarMine. Discover, like Capital One and AmEx, is also expected to benefit from lower loan-loss reserves and a rise in consumer spending in the United States. Apollo Education Group Inc, the owner of the University of Phoenix, releases fourth-quarter results. The company was able to slow a decline in enrollments two quarters ago as its efforts of freezing tuition fees and launching new programs began to pay off. The company plans to roll out more than 45 certificate programs this year in business, education, IT and healthcare. Investors will be keen to see further improvements in Apollo’s enrollments and will be looking for more information about the company’s industry forecast for next year. Car dealer Asbury Automotive Group Inc is expected to report strong third-quarter results as new car sales have picked up pace. While Asbury’s new car sales contribute about 55 percent of its revenues, margins at its used cars business is likely to be weak due to an increase in the supply of used cars that has pushed down prices. Printer maker Lexmark International Inc is expected to post a slightly better-than-expected third-quarter profit, according to StarMine. The company is expected to benefit from its printing services and software businesses. Brazil’s government releases the mid-October inflation rate. The country’s annual inflation rate shot way above an official target to its highest in nearly three years in September. The inflation spike raised the prospect of higher interest rates next year, giving fresh ammunition to Brazil’s presidential candidate Aecio Neves as bad economic news continues to pile up ahead of an Oct. 26 runoff vote (0700/1100). (Compiled by Ayesha Sruti Ahmed in Bangalore; Editing by Savio D’Souza)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below