By Charles Rotblut on April 11, 2009
This will be the first busy week for earnings season. Though the total number of reports is limited, just 68, nearly half will be from large-cap and mega-cap companies.
Financials will be in particular focus. Citigroup (C: 3.04 +0.34 +12.59%), Goldman Sachs (GS: 124.33 +9.58 +8.35%), and JPMorgan Chase (JPM: 32.75 +5.32 +19.39%) will release results. General Electric (GE: 11.33 +0.69 +6.48%) is also on the docket and all eyes will be on its finance division.
Outside the financial sector, reports from Intel (INTC: 15.98 +0.71 +4.65%), Johnson & Johnson (JNJ: 51.41 -0.04 -0.08%) and Google (GOOG: 372.50 +10.50 +2.90%) could impact market direction.
The Fed will add to the potential volatility with Wednesday afternoon’s release of the Beige Book. Inflation and housing data are also on the economic calendar.
Tuesday: March Producer Price Index (PPI), March auto sales, February business inventories
Wednesday: March Consumer Price Index (CPI), April Empire State manufacturing index, March industrial production and capacity utilization, weekly crude inventories, Fed Beige Book
Thursday: March housing starts and building permits, April Philadelphia Fed survey, weekly initial jobless claims
Friday: Preliminary April University of Michigan consumer confidence survey
The Federal Reserve’s web site is not listing any upcoming speeches from Fed officials. The next Fed meeting will occur on Apr 28 and 29.
April stock options will expire on Friday.
How results from the financial companies are perceived could have the biggest impact on market direction. Financial stocks have been trading off of sentiment (as opposed to fundamentals or technicals), so sentiment about the quarterly reports will matter much more than the actual numbers themselves.
Companies That Could Issue Positive Earnings Surprises
Six brokerage analysts have raised their first-quarter earnings estimates on Intel Corporation (INTC: 15.98 +0.71 +4.65%) within the past 30 days. Though the consensus estimate remains unchanged at 3 cents per share despite the revisions, the most accurate estimate calls for profits of 4 cents per share. Guidance could be better-than-feared given recent increases in full-year forecasts. The chipmaker has topped expectations during 3 out of the last 4 quarters. Intel is scheduled to report on Tuesday, Apr 14, after the close of trading.
Crown Holdings (CCK: 22.20 -0.01 -0.05%) has topped expectations during 6 out of the last 7 quarters. Though one analyst did recently lower his first-quarter profit projection, the consensus earnings estimate remains unchanged at 21 cents per share. There is risk, but the historic trend bodes well for another positive surprise. CCK is scheduled to report on Thursday, Apr 16, before the start of trading.
Companies That Could Issue Negative Earnings Surprises
More than half of the covering brokerage analysts have cut their first-quarter profit projections on CSX Corporation (CSX: 29.75 +1.16 +4.06%) during the past few weeks. The negative revisions have caused the consensus earnings estimate to fall 8 cents to 54 cents per share. The most accurate estimate is even more bearish at 50 cents per share. The railroad company has missed expectations once over the past 3 quarters. CSX is scheduled to report on Wednesday, Apr 15, before the start of trading.
Mattel, Inc. (MAT: 13.35 +0.59 +4.62%) has missed expectations during 3 out of the last 4 quarters, and analysts are bracing for another disappointment. Negative revisions by 3 of the 15 covering brokerage analysts over the past few weeks have sent the first-quarter consensus estimate a penny lower to a loss of 13 cents per share. The most accurate estimate is more bearish and calls for a loss of 17 cents per share. Mattel is scheduled to report on Friday, Apr 17, before the start of trading.
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