August 3, 2015 / 7:23 PM / 3 years ago

What to Watch in the Day Ahead - Tuesday, August 4

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Media company and theme park operator Walt Disney Co is expected to report third-quarter profit above analysts’ average estimate. Disney’s quarterly results will include gains from the release of second film in the Avengers series, “The Avengers: Age of Ultron”. The company is also expected to rake in higher revenue in its park and resorts business unit, helped by the onset of summer break in June. However, Walt Disney’s reliance on revenue generated by its cable channels, especially ESPN, remains a concern amid a period of uncertainty in the cable industry.

CVS Health Corp, the second-largest U.S. drugstore operator, is likely to report second-quarter sales above analysts’ average estimate. The company, which recently made multi-billion acquisitions of healthcare services firm Omnicare Inc and Target Corp’s pharmacies and clinics, reduced its full-year profit forecast to reflect a reduced share buyback target. Investors will look for updates on retail sales growth, which have taken a hit since the company stopped selling tobacco products last year, and on the integration of its acquisitions.

Drugmaker Regeneron Pharmaceuticals Inc is set to report a better-than-expected profit for the first time in six quarters, bolstered by strong demand for blockbuster eye drug Eylea. Regeneron had forecast sales of its flagship drug to be 30-35 percent higher this year. Investors and analysts will also be looking for comments from the drugmaker on how it plans to launch its newly-approved cholesterol drug, which has already faced criticism from the largest pharmacy benefit manager for being too expensive.

The Commerce Department’s U.S. factory goods data is expected to show new orders for manufactured goods increased 1.8 percent in June after a drop of 1.0 percent in May. Factory orders have dropped in nine of the last 10 months through May. (1000/1400)

Health insurer Aetna Inc, fresh off announcing plans to buy smaller rival Humana Inc, will announce second-quarter results and discuss its outlook for the business. Investors will listen to see if the company, about to become the nation’s largest Medicare Advantage company, has had any feedback from antitrust regulators who will look closely at that business.

Cable company Charter Communications Inc is likely to report second-quarter profit below analysts’ average estimate. Investors will look for details on Charter’s $78.7 billion deal with Time Warner Cable Inc.

Activision Blizzard Inc is expected to report second-quarter revenue above analysts’ average estimate. The video game maker, which raised its full year profit and revenue forecast in May, has been benefiting from its higher-margin digital business. The company, known for its “World of Warcraft” franchise, is expected to benefit from strong sales of its games such as “House of Wolves” and “Hearthstone: Heroes of Warcraft”. Investors will be looking for update on launch of new games.

Cereal maker Kellogg Co’s second-quarter profit is likely to narrowly miss analysts’ average estimate. The company has had to tackle international sales being hurt by a strong dollar in recent quarters, along with a longer-term shift in U.S. consumer preferences to cheaper private-label foods and cooked meals. Kellogg’s U.S. morning foods business, which includes cereal, has reported a rise in sales only once in the past eight quarters. Investors will look for any improvement in the business, progress on the company’s cost-cutting plan and for comments on the dollar’s impact.

Sprint Corp is expected to report first-quarter revenue above analysts’ average estimate. Wall Street will look out for details on whether the company’s turnaround plan has helped gain more customers. Analysts have warned that Sprint has been burning cash at an alarming rate in the midst of its turnaround plan and investors will keep an eye out for an update on network upgrades and other investments.

Mosaic Co, producer and marketer of concentrated phosphate and potash crop nutrients, reports second-quarter results. James O’Rourke takes over as CEO on Aug. 5 and investors will be keen to hear his ideas about leading the company.

Coach Inc, the maker of Poppy handbags, has posted falling sales for nearly two years as it steadily loses ground to trendier rivals such as Michael Kors and Kate Spade. Analysts feel a lack of innovation has made the handbag market “boring”. Coach is expected to report fourth-quarter sales below analysts’ average estimate. Investors will look out for any changes in company strategy and forecast.

Hyatt Hotels Corp, the owner of the Park Hyatt, Grand Hyatt and Hyatt Regency brands of hotels, is expected to report second-quarter profit and revenue above analysts’ average estimate. Investors will be interested to see if occupancy rates improve at the company’s hotels on the back of a booming lodging cycle. The company has benefited in the past few quarters from higher levels of business travel within the United States and increased group bookings.

Harman International Industries Inc, the maker of JBL and Harman Kardon audio systems, is expected to report fourth-quarter earnings slightly above analysts’ average estimate. New orders from automakers such as BMW and Daimler are expected to offset a strong dollar, which has been blunting its edge against overseas rivals in its professional audio equipment business. Investors will look to see if cost-cutting measures by Harman, which gets a majority of its revenue from outside the United States, can help protect its profit from a strong dollar.

Life and mortgage insurer Genworth Financial Inc’s second-quarter profit is expected to be in line with analysts’ average estimate. French insurer AXA said in July that it is in exclusive talks to buy Genworth’s Lifestyle Protection Insurance unit, as Genworth attempts to simplify its business. The insurer’s CEO said in April that the company is also considering going private and would be open to selling its long-term care insurance unit, among other strategic options.

DreamWorks Animation SKG Inc, the studio behind the “Shrek”, “Madagascar” and “Kung Fu Panda” franchises, will likely report second-quarter profit below analysts’ average estimate. The company started a major restructuring plan earlier this year after a string of box-office misses. Investors will look for new details on restructuring and business diversification.

Time Inc, the publisher of Time, People and Sports Illustrated, is expected to report second-quarter profit below analysts’ average estimate. Analysts expect 2015 to be a rough year for Time as it restructures its business and reinvests in video offerings, mobile platforms and events to compensate for declining ad revenue. Investors look for a breakup of the restructuring plan and details on the company’s digital roadmap.

Halyard Health Inc, which makes surgical masks and gowns, is expected to report second-quarter profit below analysts’ average estimate, hurt by a stronger dollar. Halyard Health, which was spun-off from Kimberly-Clark in November, gets nearly a fourth of its sales from outside the United States.

Brazil’s industrial output is expected to have fallen in June, by 0.70 percent, deepening the country’s recession. Hard-to-fix structural problems such as low productivity, high tax and labor costs as well as poor infrastructure are widely cited as barriers to growth among local manufacturers. (0800/1200) Also, Mexico’s May gross fixed investment data will be released. The data is likely to show a rise of 2.30 percent annually. (0900/1300)

LIVECHAT: Equity outlook with Dino Fuschillo, Head of European Equities, Sanlam Four Dino Fuschillo, head of European equities at Sanlam FOUR, joins us to discuss the recent earnings season and the outlook for European equities as the U.S. Federal Reserve prepares to hike interest rates. (0500/0900) Separately, Reuters Columnist Jim Saft returns to Global Markets Forum to discuss the Federal Reserve's monetary policy. (0600/1000) Also, returning to the Forum ahead of his annual fishing retreat in Maine, esteemed economist David Kotok of Cumberland Advisors offers his insights into everything from China to Puerto Rico to the Fed to what's biting in the chilly waters of Grand Lake Stream. (0900/1300) To join the conversation, click here

All analysts' estimates are according to Thomson Reuters StarMine, unless mentioned otherwise Compiled by Nivedita Balu; Editing by Savio D'Souza

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