January 21, 2015 / 7:39 PM / 3 years ago

What to Watch in the Day Ahead - Thursday, Jan. 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) Verizon Communications Inc, the largest U.S. wireless carrier, is expected to report fourth-quarter profit below market estimates, according to Thomson Reuters StarMine. Verizon recently warned that various promotional offers and price cuts in its wireless business would affect profitability. The carrier has been cautious about cutting prices in a hyper-competitive environment, but recently launched a series of promotions following price cuts by rivals. Investors will be looking for information around Verizon’s initial 2015 revenue growth forecast, the directions that margins will take and the company’s capital expenditure range. Results are expected before markets open. Starbucks Corp reports first-quarter results after markets close and the focus will be on whether the company had a ho-hum holiday quarter as increasingly bloated food menus cool visits from busy customers. That would be bad news for the recently red-hot coffee chain, which announced earlier this month that Troy Alstead, widely viewed as the company’s second in command, is taking an unpaid sabbatical to spend more time with his family. Credit card issuer Capital One Financial Corp is expected to benefit from lower credit losses and increased holiday spending in the United States when it releases fourth-quarter earnings after markets close. The National Retail Federation has estimated total holiday sales rose 4 percent to $616 billion, its highest growth rate since 2011, helped by strong online buying, improved job market and falling gas prices. Property and casualty insurer Travelers Companies Inc reports fourth-quarter earnings before markets open. The company is expected to benefit from the lack of any major catastrophe losses and higher premium income. The Dow 30 component has aggressively raised insurance prices in the past several quarters to offset low interest rates. As pricing continues to decelerate in the commercial insurance sector, investors are keen to get a view of the company’s average renewal price rate increase. Auto parts maker Johnson Controls Inc is likely to benefit from the continued growth in auto sales in North America when it reports its first-quarter earnings before markets open. With analysts forecasting global vehicle demand increase of 3 percent in 2015, the company is likely to gain from rising car production in emerging countries such as China, where it already has a sizable presence. Sales in its automotive batteries unit is also expected to translate into higher sales as demand is on the rise. The U.S. Labor Department issues a weekly update on new applications for unemployment insurance claims. Jobless claims are seen falling in the latest week, and continued claims were likely down as well, maintaining a trend that signals a firming labor market (0830/1330). Separately, Federal Reserve Bank of Kansas City issues composite and manufacturing outlook indices for January. (1100/1600) The European Central Bank’s 25 policymakers meet in Frankfurt to decide if, how and when they will deploy a much anticipated sovereign bond-buying plan to bolster the flagging euro zone economy. ECB President Mario Draghi is expected to announce a large-scale bond buying stimulus program following the governing council meet. (0830/1330) Intuitive Surgical Inc pre-announced that its total fourth-quarter revenue is estimated to have risen by 5 percent. Analysts say the spike was likely due to higher unit sales of its da Vinci surgical System that enables surgeons to perform delicate and complex operations through a few small incisions. However, due to poor performance during the first half of the year, annual sales are expected to decline by 6 percent to $2.13 billion. The company earnings are expected after markets close. Canadian Pacific Railway Ltd reports fourth-quarter results. Investors will be looking for updates on how its operations have run through the first part of the winter, after the previous year’s congestion problems. The company may also be asked about the impact of lower oil prices on its crude by rail business, a key source of growth in recent years. The company profit is expected to rise to C$2.57 per share from C$1.91 per share a year earlier, and revenue to C$1.74 billion from C$1.61 billion, according to Thomson Reuters I/B/E/S. (1100/1600) Skyworks Solutions Inc is expected to report first-quarter revenue after markets close. The radio frequency chip supplier’s earnings will likely be in line with market estimates, according to Thomson Reuters StarMine. The company had forecast revenue above expectations, boosted by strong sales of smartphones, in particular Apple’s latest line of iPhones. The radio frequency chip market is expanding as telecom operators upgrade to 4G networks, and the company has been benefiting from it. Skyworks, whose chips connect smartphones and tablets to a telecom network, said it is expected to outperform the semiconductor market in 2015 and beyond. Discount security brokers E*Trade Financial Corp reports fourth-quarter results after markets closes. The company is still on the path to recovery from the financial crisis of 2008. It has withdrawn from making bank loans (mortgages) that almost killed it, and investors are looking for hints as to when regulators will allow it to pay a dividend. Denver asset manager Janus Capital Group Inc releases fourth-quarter earnings before markets open. Investors will be looking for an update on how much the company’s surprise hire of star bond fund manager Bill Gross in the fall has helped flows and its bottom line, and what further use the company might make of Gross in introducing new products. Family Dollar’s shareholders will vote on the company’s agreement to be bought over by Dollar Tree Inc, putting an end to a months-long tussle. Dollar General last week said it was sticking to its estimate of divesting 1,500 stores to win approval for its bid, a move that analysts said could end up handing the company to Dollar Tree Inc, particularly after proxy advisory firms ISS and Glass Lewis advised shareholders to vote for a deal with Dollar Tree as it offered more certainty of closure. National statistics institute of Mexico will release consumer price data for the first half of January, after annual inflation cooled to 4.08 percent in December, but remained stuck above the central bank’s 4 percent ceiling. (0900/1400) Argentina’s national statistics agency INDEC releases December trade balance data. Analysts expect trade surplus to shrink to 341 million from 461 million in November. The government will also announce industrial production output data for 2014. (1400/1900) (Compiled By Astha Rawat in Bengaluru; Editing by Savio D’Souza)

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