February 10, 2016 / 7:39 PM / in 2 years

What to Watch in the Day Ahead - Thursday, Feb 11

(The Day Ahead is an email and PDF publication that includes the day's major stories and
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PepsiCo Inc is expected to report fourth-quarter sales below the average analyst estimate,
according to Thomson Reuters StarMine. The company's push into non-carbonated beverages is
paying off, with analysts expecting U.S. sales to have got a boost in the quarter from higher
pricing and solid sales of Gatorade and Starbucks coffee sold by Pepsi. However, a strong dollar
and weakness in Russian and some Latin American currencies are likely to have hurt revenue.
Analysts have also raised concerns that the company's Lay's potato chips is losing market share
in North America to Kellogg's Pringles and Diamond Foods' Kettle chips.
American International Group Inc, which recently announced plans to downsize its retail business
after facing pressure from billionaire Carl Icahn, is expected to report a smaller-than-expected
fourth-quarter loss. The biggest U.S. commercial insurer said it would spin off its mortgage
insurance unit, cut jobs and sell its broker-dealer network. The company plans to return $25
billion in capital to shareholders over the next two years. 
U.S. Labor Department's report is expected to show that weekly initial claims for state
unemployment benefits likely dipped to a seasonally adjusted 281,000 in comparison to 285,000 in
the prior week. (0830/1330)
TripAdvisor Inc is expected to report a lower profit for the fourth quarter as it continues to
roll out its instant booking feature to more geographies. The instant booking feature allows
travelers to book a hotel directly from the company's website, instead of being directed to a
third-party booking site. While the feature results in improved traveler conversion rate and
revenue in the long run, it causes near-term revenue loss as fewer travelers are directed to
third-party websites. TripAdvisor gets a big portion of its revenue from payments from
third-party booking sites such as hotels and online travel agencies, based on the number of
travelers who click on each type of accommodation listing. TripAdvisor rolled out the feature in
nine more countries in the fourth quarter. 
TV network operator CBS Corp is expected to report a rise in fourth-quarter revenue, according
to Thomson Reuters StarMine. The company, which owns cable channel Showtime and CBS Sports
Networks, has been trying to rely less on ad revenue and it is focusing more on its online
subscription streaming services such as CBS All Access. CBS is expected to benefit from strong
sports advertising sales. CBS recently resolved its leadership controversy after it said Chief
Executive Leslie Moonves would replace Sumner Redstone as executive chairman.
Thomson Reuters Corp reports fourth-quarter earnings and forecasts outlook for the year.
Investors will be looking at how the news and information company has fared amid currency
headwinds, falling oil prices and worries about slowing growth in China.
Videogame maker Activision Blizzard Inc reports fourth-quarter earnings. In November, the
company agreed to buy "Candy Crush Saga" creator King Digital Entertainment for $5.9 billion as
it makes a major push into the fast-growing mobile market. It also launched a film and TV studio
to create original content based on its videogame franchises. Activision expects to benefit from
strong sales of its newly launched "StarCraft II: Legacy of the Void" game.
Avon Products Inc, the pioneer of direct-selling, is expected to report fourth-quarter sales
well below analysts' estimates, according to Thomson Reuters StarMine. Avon, which has seen its
market share eroded by bigger players, has been on a decade-long turnaround program that
included cost cuts and the separation of its North America business. In January, the company and
top investor Cerberus Capital laid out plans, such as increasing marketing expenditure and
reducing overheads, to boost profitability. However, analysts are not convinced that these steps
would reverse its sales decline. Investors will look out for other strategic plans and forecast.
Time Inc is expected to report a fall in fourth-quarter revenue, according to Thomson Reuters
StarMine. Lower print advertising and circulation revenue might have hurt the revenue of the
company, which publishes Sports Illustrated, People and Time magazines. To cope with a
relentless decline in the print industry, the company has been slashing costs, tapping revenue
sources with higher margins and beefing up its digital offerings.
Groupon Inc is expected to report a fall in fourth-quarter revenue but not as steep as analysts
had estimated, according to Thomson Reuters StarMine. The operator of daily deals website
groupon.com, which has witnessed a slowdown in its active customer base, said in November it
would lower its focus on offering consumer electronics and take a $50 million-$100 million hit
on its fourth-quarter revenue. Groupon, which named a chief executive in November, is betting on
higher marketing spending to woo customers.
Minnesota-based Mosaic Co, which is facing declining fertilizer prices, releases fourth-quarter
results. Investors will watch for any possible closure of the company's potash production
capacity as prices slump.
Cyber security company FireEye Inc will likely report a lower-than-expected jump in
fourth-quarter revenue, according to Thomson Reuters StarMine. The company had warned that
reduced Chinese hacking had hurt U.S. demand and that its sales had fallen short in Europe.
Analysts are skeptical of that reason and believe that the company is affected by intensifying
competition from rivals such as Palo Alto Networks Inc.
Canada's new home price index likely grew 0.2 percent in December, unchanged from November.

TransCanada Corp, Canada's second-largest pipeline company, is expected to report a lower
fourth-quarter profit, as a drop in power prices in Alberta weighs on its energy unit. Investors
will focus on the company's plans for its pipeline business. U.S. President Barack Obama
rejected the company's controversial Keystone XL pipeline last year. 

Telus Corp, one of Canada's three dominant wireless companies, posts fourth-quarter earnings.
Telus is expected to post a slip in overall profit in a tough competitive environment. It will
provide outlook for 2016, and investors will be eager to hear how it plans to deal with TV,
landline and Internet rival Shaw Communications, which is adding a wireless business.  

Oil sands developer Cenovus Energy Inc is expected to report a smaller fourth-quarter loss as
lower costs mitigate the impact of low crude prices. The company has clamped down on spending,
deferring projects and limiting drilling in response to a more than 70 percent fall in oil
prices since June 2014. Investors will want to know if it plans to slash its dividend further,
after a 40 percent cut in October. 

TMX Group, the owner of Canada's biggest stock exchange, reports fourth-quarter earnings.
Analysts are expecting flat profit and revenue as the exchange struggles to deal with stubbornly
low commodity prices that have hurt its large portion of resource-based issuers.

Canadian miner Teck Resources is expected to report weaker fourth-quarter earnings due to lower
coal, copper and zinc prices. The markets are likely to focus on the Vancouver-based miner's
heavy debt and its plans on how to reduce it. The company may also announce more cost-cutting

Precision Drilling Corp, Canada's largest oil and gas rig contractor, is expected to report a
smaller Q4 loss as cost cuts help offset the impact of waning demand. A steep drop in crude
prices has prompted the company's customers to scale back drilling. Investors will focus on the
company's spending plans for the year.
Chile's central bank meets to decide the benchmark interest rate. The bank has guided towards a
gradual tightening as it looks to fight above target inflation, but analysts think a hold is
likely in February given recent weak economic data. (1600/2100) In Mexico, the National
Statistics Institute will release December industrial production numbers, after the gauge shrank
by the most in six months in November. (0900/1400)

LIVECHAT-U.S. RETAIL WATCH with analyst Jharonne Martis
As U.S. department stores report quarterly results that included a dreary Christmas, Thomson
Reuters retail analyst Jharonne Martis sums up the numbers and takes a data-driven look at the
financial foundations, values and investment risks at Macy's and other traditional retailers
that may be increasingly ripe for consolidation. (1000 ET/1500 GMT) To participate in the Global
Markets Forum, click here bit.ly/1kTxdKD

 (Compiled by Astha Rawat in Bengaluru; Editing by Don Sebastian)
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