July 21, 2014 / 6:39 PM / 4 years ago

What to Watch in The Day Ahead; Tuesday, July 22

(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) Apple offers Wall Street a glimpse into its quiet second quarter, but investors are already looking ahead to the fall, when the iPhone maker typically unveils the latest iteration of its best-selling smartphone. Hope persists that the company, which has not unveiled a product in a new category since 2010, will also have another trick up its sleeve, such as the oft-rumored iWatch. Microsoft is expected to report a slightly lower fiscal fourth-quarter profit, partly due to the acquisition of Nokia’s handset business in April, but investors are already looking past that - pushing the stock up to new 14-year highs - and want to hear more details from new CEO Satya Nadella about the recent 18,000 job cuts and get more color on how exactly he plans to reshape the company as a mobile and cloud-focused competitor to Google and Apple. Verizon is scheduled to report its second-quarter earnings. Some investors have been skeptical of the company’s reluctance to follow its competitors’ aggressive discounts in a near-saturated market. Investors will look closely at Verizon’s revenue and churn, or wireless customer defections, to gauge how customers are responding to some of the most competitive pricing the industry has seen. Separately, Comcast, which made a $45.3 billion bid to acquire Time Warner Cable in February, is scheduled to report its second-quarter results. Beverage giant Coca-Cola is expected report second-quarter earnings before the market opens. The company has posted three straight quarters of sales declines due to weak demand for sodas, but investors have started to see glimmers of hope that the worst might be behind it. Stagnating sales in North America, Coke’s biggest market, and the continuing fall in demand for sodas have some investors on the edge. They will be watching out for unit volume growth in developed markets and sales trends in international regions. Coke is expected to marginally miss sales expectations this quarter. The Labor Department is expected to report that inflation rose 0.3 percent in June, after rising food prices pushed the index to its biggest increase in more than a year in May. (0830/1230) Investors will also watch for a report from the Commerce Department on existing home sales, which likely rose to 4.97 million in June. (1000/1400) The Federal Housing Finance Agency is scheduled to release its House Price Index for May. (0900/1300) Meanwhile the Cleveland Fed is expected to issue its median CPI for June. (1130/1530) Also, Federal Reserve Bank of Richmond is likely to issue Manufacturing and Services indices for July. (1000/1400) McDonald’s, likely to post second-quarter results, is struggling to turn its business around - particularly in its home market, the United States. Investors are looking to see if its new back-to-basics strategy focusing on value and new products is gaining traction. Lockheed Martin, the Pentagon’s largest supplier, is expected to report second-quarter results. The company has been hit by U.S. government budget cuts over the past year and a half. Its sales to the U.S. military are likely to drop by about 6 percent in 2014 on top of a 4 percent drop last year. However, the company said it expects foreign sales to offset some of the drop in U.S. orders. Analysts will also be keen for comment on the impact of the grounding of the F-35 - the world’s most expensive weapons project - after the engine on a plane failed at a Florida airbase in June. Credit Suisse is scheduled to report second-quarter earnings after a multi-billion dollar settlement and a guilty plea in a tax evasion investigation by U.S. prosecutors. Activist investor William Ackman, on a 19-month long public relations campaign to prove his allegations that nutrition company Herbalife is running a pyramid scheme, is planning another public presentation where he is expected to discuss the company’s nutrition clubs. State and federal regulators are already probing the company’s business model and the stock price came under pressure at the end of the week amid news that Ackman has scheduled a presentation. (1000/1400) Travelers Cos, expected to report earnings, may benefit from low claims during the second quarter. The Dow 30 component said it incurred after-tax catastrophe losses of about $150 million in the second quarter. Travelers said it was looking to grow market share through discounting auto insurance prices. The company’s results are a bellwether for the property and casualty insurance industry. United Technologies is expected to report second-quarter results, with analysts watching orders for the Otis elevator division, which is heavily leveraged to China. Analysts will also keep an eye on the company’s potentially slowing residential building market, and the aftermarket of spare parts for its aerospace businesses. The diversified U.S. manufacturer said last month it would record a $440 million charge in the quarter tied to a revamped helicopter contract with Canada for its Sikorsky unit. Video game maker Electronic Arts is scheduled to report first-quarter earnings as titles for the PlayStation 4 and Xbox One consoles like “FIFA” gain steam but sales of games for older versions of the devices continue to slip. Analysts expect the company to report in-line results driven by the robust sales of the Xbox One exclusive “Titanfall.” Investors will keep an eye on Electronic Arts’ full-year guidance, which analysts expect will remain unchanged, as the company steps up its efforts to rein in costs and bring about margin expansion from digital sales. Omnicom, the No.1 U.S. advertising company’s second-quarter profit and revenue is likely to beat analysts’ estimates. Omnicom is expected to benefit from higher ad spending in the United States. Witnesses not yet announced for hearing where Democrats are likely to call for immediate steps by Congress and the White House to stem the surge in corporate inversion deals by U.S. companies moving their tax domiciles overseas to avoid U.S. taxes. Republicans will likely urge that the issue be set aside until comprehensive tax reform can be undertaken, which is unlikely until mid-2015 at the earliest. Virtualization software maker VMware is expected to report second-quarter revenue in line with estimates. Analysts expect the early closing of some deals and robust demand for the company’s cloud infrastructure services to add to revenue. They also expect the company’s booking rate to grow. Discover Financial Services’ second-quarter results are expected to top estimates. Discover, like Capital One, is also expected to benefit from lower loan-loss reserves and rise in consumer spending. Discover is also making an attempt to tap Asian markets. Broadcom expected to release its second-quarter report. Wall Street is going to want details of how the chipmaker plans to remain competitive in mobile now that it has given up on building its own leading edge LTE chips. Separately, Xilinx, the programmable chipmaker, will likely post results slightly below consensus estimates, as sales from its aerospace, defense and wired telecom customers are expected to be flat in the quarter. TD Ameritrade is scheduled to report fiscal third-quarter results that are expected to continue to be mixed, with a healthy growth in client assets, continuing low returns on client cash because of low rates and seasonally weak trading (June) trading revenue. Intuitive Surgical looks to bounce back from a dismal first quarter that rocked shareholders accustomed to solid quarterly sales and earnings growth. Investors will be looking for signs that sales and use of the expensive da Vinci robotic surgical system have picked up after sales fell more than 20 percent in the first quarter, and for an updated forecast, including details of whether expansion of sales in Japan can help offset declines in the United States. A sluggish housing recovery in the United States is likely to affect Ingersoll Rand’s second-quarter results. The company is likely to report lower orders for its climate controls business. Investors will be looking out for order numbers on the company’s commercial HVAC business. Johnson Controls HVAC business recorded a 4 percent decline due to lower orders from North America and Middle East in its third quarter Juniper Networks’ first-quarter profit is expected to beat analysts’ expectations. The company has been benefiting from higher spending by U.S. telecom carriers on their network. Some analysts speculate that Juniper, which already undertook a round of job cuts this year, could slash more jobs. Rockwell Collins, a supplier of avionics and other electronics for airplanes, is expected to report a lower fiscal third-quarter profit as it struggles to overcome weaker defense sales and lower equipment sales for business jets. Analysts expect profit of $1.17 a share, compared with $1.20 a year earlier. CIT Group, the small business lender is expected to report a drop in second-quarter profit, hurt by lower net interest margins, as commercial and industrial lending market remains competitive. Analysts expect CIT to deliver strong loan growth in the long term, but margins to remain compress. Gannett, the largest newspaper chain in the U.S., is expected to report its second-quarter results tomorrow as the print industry continues its struggle with declining ad revenue and readership. To counter that, Gannett has been bulking up its broadcast holdings which will likely prompt analysts and investors if the company will spin out its newspapers. Peabody Energy, the coal miner is expected to report a second-quarter loss, compared with a year ago profit. Analysts expect output form Peabody’s North Goonyella Coal Mine in Australia to improve in the third quarter. Investors will look for comments on the impact of steel-making coal price cuts on the company’s forecast, which could be offset by improving thermal coal demand. Asbury Automotive Group is expected to post a higher revenue and profit for the second quarter, as low interest rates and a brighter economic outlook drive U.S. new-vehicle sales. Chemicals company DuPont is expected to post a lower second-quarter profit, hurt by weakness in its agriculture business. Nelson Peltz’s Trian Fund Management LP disclosed a stake in DuPont last year and the activist investor has called DuPont shares undervalued, but hasn’t made public his plans for the company. PayPal, in conjunction with First Bank Nigeria, will launch the PayPal platform in the West African country. PayPal will be providing online payment alternatives for consumers via mobile phones or PCs in markets often blighted by financial fraud. Mexican May retail sales are scheduled to be released. Analysts expect a 0.80 percent decrease from last month.(0900/1300) (Compiled By Nandi Kaul; Edited by Don Sebastian)

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