(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) Microsoft Corp, the world’s largest software company, is expected to report a sharp fall in third-quarter profit as sales of personal computers remain sluggish and a strong dollar lowers the value of earnings outside of North America. PC sales have been declining for three years and sales in January-March may have been even slower than usual as customers await the rollout of Windows 10 in summer. Investors will be looking for more details on Windows 10 and comments on how the Dow company will make money in the long term from cloud-delivered services.
Search engine giant Google Inc is expected to report higher revenue and profit for the first quarter, although a strong dollar is likely to weigh on results, analysts say. Google, which has been officially accused by the European Union of cheating consumers and competitors, is also being investigated for its Android mobile operating system. Analysts say the latter could prove to be a bigger threat to Google’s future profitability.
Diversified manufacturer 3M Co posts its first-quarter results. Given that more than 60 percent of 3M’s sales come from outside the United States, investors will be watching for the impact of a strong dollar on the Dow component’s results.
E-commerce company Amazon.com Inc will report its first-quarter results amid an improvement in investor sentiment after the company’s fourth-quarter earnings beat expectations. A moderation in shipping losses and normalization of international growth rate are likely to benefit Amazon’s results. Investors will watch out for comments on the increase in paid membership for Amazon Prime, margin growth in the company’s cloud computing arm Amazon Web Services and sales growth in the media business and logistics operations.
Procter & Gamble, the world’s largest household products maker, is expected to report profit below the average analyst estimate, according to Thomson Reuters StarMine data, hurt by a stronger dollar. The Dow 30 company, which gets about two-thirds of its revenue from outside the United States, said it was working to localize its supply chain and build manufacturing plants in emerging markets. Investors will look for details on brands that the company expects to sell off and any forecast.
The U.S. Labor Department’s data on initial claims for jobless benefits is expected to show a decrease last week after an unexpected rise the week before. (0830/1230) Overall, the current level of unemployment insurance claims still points to a strengthening labor market. Also releasing in the day is the Commerce Department’s data on new homes sales, which is expected to show that sales fell to an annual rate of 513,000 units in March from a seven-year high of 539,000 units in February. (1000/1400)
Dow component Caterpillar Inc, the world’s largest construction and mining equipment maker, reports first-quarter results. Investors will watch for comments on the U.S. construction market and the impact of falling oil prices and a strong dollar on the company.
Beverage giant PepsiCo Inc reports first-quarter results before the market opens. Competitor Coca-Cola Co reported better-than-expected profit and revenue, helped by price increases in North America.
General Motors Co reports first-quarter results before the market opens. Analysts on average are expecting a profit of 96 cents per share, up sharply from a year before.
AbbVie Inc, whose planned $21 billion acquisition of Pharmacyclics Inc is meant to lessen the company’s dependence on its blockbuster Humira arthritis drug, reports first-quarter results. AbbVie’s earnings and sales are expected to rise sharply, fueled by Humira’s continuing growth and sales of the company’s recently approved Viekira Pak treatment for hepatitis C. Investors will be looking for details on the sales prospects of Viekira Pak, given the steep price discounts AbbVie has given to compete with Gilead Science Inc’s potent treatments for the liver disease.
Eli Lilly and Co is expected to report higher first-quarter earnings as the drugmaker begins to recover from patent expirations that slashed demand for its biggest products. The company is well positioned to deliver a promised return to profit growth this year, helped by new treatments for cancer and diabetes and growing sales of its animal health product brands.
Freeport-McMoRan Inc, the world’s biggest listed copper producer, is expected to report a first-quarter loss and declining revenue, reflecting slumping prices of metals and oil and a drop in copper and gold volumes. Analysts await more details on a recent dividend cut by the Arizona-based miner and any updates on recent strikes at its massive Grasberg copper and gold operation in Indonesia. Any developments on plans to build a smelter in Indonesia and contract extensions beyond 2021 will also be of interest. Plans for non-core asset sales will be in focus, along with any news on capital spending or cost reduction targets.
Newmont Mining Corp, the biggest U.S. gold miner, is expected to report higher first-quarter earnings as lower taxes offset increased costs and lower volumes. Investors will look for any comments on acquisitions or asset sales and any developments in Indonesia related to the company’s Batu Hijau mine or smelter plans with Freeport-McMoRan. Any changes to forecasts, issued in February, or updates on the Merian project in Suriname will also be of interest.
Railroad Union Pacific Corp is scheduled to report first-quarter results before the markets open. A strong dollar weighed on the performance of CSX Corp, Norfolk Southern Corp and Kansas City Southern Co.
Dow Chemical Co, the biggest U.S. chemical maker by sales, is expected to report a lower first-quarter profit due to a stronger dollar and a slowdown in its agricultural business. The company, which makes crop protection products, is expected to face lower demand for its insecticides. Analysts also expect the decline in oil prices to weigh on the company’s ethylene margins. Dow said last month that it would offload a bulk of its low-margin bleach and vinyl-related business to Olin in a $5 billion deal. Investors will be looking for further comments on the company’s cost-saving plans.
Southwest Airlines Co, Alaska Air Group Inc and United Continental Holdings Inc report results. Weakening demand in markets outside the United States is expected to hurt United Continental more than Southwest and Alaska Air. The three airlines together will give the clearest indication yet on the strength of U.S. domestic travel demand and the state of the U.S. airline industry overall.
PulteGroup Inc reports first-quarter results, a day after D.R. Horton’s results indicated a strong spring selling season. PulteGroup’s numbers are expected to suggest that a slowdown in housing starts in the first three months did not point to underlying weakness in the U.S. housing market. The housing recovery slowed last year due to economic uncertainty and a steep rise in new home prices. However, as jobs data gets better and borrowing becomes easier, buyers are expected to return to the market this year. PulteGroup is better positioned than D.R. Horton to benefit from this return. The company caters to both first-time buyers and those trading up to a larger house, while D.R. Horton’s target audience is mainly first-time buyers, who have not participated in the recovery so far.
Steelmaker Nucor Corp will report first-quarter results. Nucor has been struggling with lower selling prices due to high levels of imports. Declining oil prices have also led to excess inventory in Nucor’s pipe and tube business. Analysts will be looking for comments on inventory, steel demand and overcapacity in its steel mills business.
Patterson-UTI Energy Inc, the second-largest land driller in North America, is expected to report a lower first-quarter profit as weak oil prices weigh on drilling activity. Patterson, which halved its rig construction program for this year, had warned that 2015 would be “challenging” amid indications that customers could terminate a number of longer-term contracts early. Also, driller Helmerich & Payne Inc, which said in January that it might cut 2,000 jobs, reports second-quarter results.
Coal miner Peabody Energy Corp is expected to report a bigger first-quarter loss due to continued weakness in coal prices. The company has been implementing various cost-cutting measures, including a dividend cut last quarter and a joint venture with Glencore Plc at two neighboring mines in Australia’s Hunter Valley. Investors will look for updates on any further cost-cutting measures.
Weapons maker Raytheon Co reports first-quarter results. The company has increased exposure to markets outside the United States, which account for about 27 percent of its total sales, as U.S. defense spending remains tight. The maker of the Tomahawk missile and the Patriot missile defense system forecast disappointing 2015 revenue in January as domestic orders remained weak.
Starbucks Corp reports its second-quarter results. Starbucks is one of the restaurant industry’s top performers, but investors and analysts worry that its streak of red-hot growth is coming to an end. The company has a number of plans in place to boost sales and investors will be looking for proof that those are working.
Dunkin’ Brands Group Inc reports first-quarter results. Investors will be looking at how much Boston’s record snowfall hurt results at Dunkin Brands, whose Dunkin’ Donuts shops are concentrated in the U.S. northeast. Experts say the impact could be meaningful.
Hershey Co, the maker of Hershey’s Kisses and Reese’s peanut butter cups, has been struggling with high cocoa and dairy costs and intense competition from rivals such as Mondelez and Mars. To tackle growing competition, the company has been pouring money in advertisements and promotions, but this is expected to hurt its full-year earnings per share. It has also tried to diversify and add a new stream of revenue by acquiring jerky maker Krave Pure Foods Inc in January. When Hershey reports its first-quarter results, investors will be looking out for comments on whether the company will make more acquisitions in the meat and bakery snacks category and the effect of a strong dollar on its outlook.
Hanesbrands Inc, the innerwear and apparel maker, is expected to report first-quarter profit and sales above analysts’ estimates, according to Thomson Reuters StarMine data. Analysts are projecting first-quarter sales growth of more than 15 percent as the company benefits from higher sales of sport and gym clothing at department stores, and the acquisition of DBApparel and Maidenform Brands. Investors will look for an update to the full-year forecast and more details on the company’s recent acquisition of college logo clothing maker Knights Apparel.
Johnson Controls Inc, the auto parts supplier and maker of climate control systems for buildings, is expected to report higher second-quarter profit, driven by higher sales in its seating and interiors business as auto sales and production rose in the first quarter. The company’s buildings efficiency business is also expected to report higher revenue. Investors will be looking for comments on Johnson Controls’ business focus and outlook following the sale of its workplace solutions business to CBRE Group.
Ingersoll-Rand Plc, the maker of Trane air conditioners and Thermo King refrigeration units, is expected to report a higher first-quarter profit, driven by growth in global industrial and construction markets. Investors will be looking for the impact of a strong dollar on the company’s industrial business, which has a higher proportion of revenue coming from outside the United States. Investors will also be looking for an update on how much the weakness in oil prices has hurt the company’s newly acquired centrifugal compression business.
Alternative asset manager KKR & Co LP is scheduled to report first-quarter results before the bell. The company reported a sharp drop in fourth-quarter profit because of plunging oil prices.
Capital One Financial Corp reports first-quarter results after the markets close. The company’s net interest income from its domestic credit card business could be hurt as U.S. consumers have been paying down credit card debts, using the windfall from lower gasoline prices. However, growth in commercial lending is expected to be strong for Capital One.
Investment bank and asset manager Lazard Ltd reports first-quarter results. Lazard is expected to benefit from a jump in corporate dealmaking, which should have boosted its merger and acquisition advisory business. Globally, deals worth $811.8 billion were announced in the first quarter, up 21 percent from a year earlier. Lazard advised on the merger of Heinz-Kraft and the sale of Serbia’s state-operated Telekom Srbija. However, analysts expect lower-than-anticipated deal completions to weigh on the company’s quarterly revenue.
Network gear maker Juniper Networks Inc is expected to report first-quarter profit well above the average analyst estimate, according to Thomson Reuters StarMine data, as the company’s cost-cutting measures undertaken in 2014 pay off. Analysts are looking for measures that could boost revenue in an atmosphere where service providers, the company’s largest customers, have postponed spending.
Touchscreen chip maker Synaptics Inc is expected to report third-quarter profit below analysts’ estimate, according to Thomson Reuters StarMine data, on weak demand from smartphone makers. Analysts have said that certain Samsung designs that have come out recently are not using Synaptics touch IC products.
Online music streaming service provider Pandora Media Inc is expected to report first-quarter revenue above the average analyst estimate, according to Thomson Reuters StarMine data. The company is expected to benefit from stronger listening hours and its gradual move into automobiles, where more than half of all radio listening occurs in the United States. Investors will look for updates on user and local ad growth.
Mexico’s national statistics office will release economic activity data for February, after the gauge expanded in January on a pickup in services and agriculture while industry sank. (0900/1300) Also, Mexico will release annual inflation data for the first half of April, after the indicator picked up to 3.14 in March, reaching just above the central bank’s 3 percent target. (0900/1300)
Compiled by Ayesha Sruti Ahmed in Bengaluru; Editing by Kirti Pandey