Photo: Flickr Nick K.
From Dan Greenhaus at BTIG, a quick look at the coming earnings-filled week:As we noted, the biggest week for earnings lay ahead. In the auto and related sector, HOG has already reported but this week brings earnings from F, LEA, ORLY, GPI and other auto companies. With the Japan supply related disruptions now behind us, the sector is expected to benefit from a pickup in demand and perhaps even an acceleration in margins. MAS and OI report this week following releases from USG and TPX which should keep attention on building materials and the outlook for housing (Case-Shiller is released on Tuesday). Commodity cost inputs have obviously been an issue for this sector and we will see whether recent declines are increasing enthusiasm even in a weak demand environment.
Several defence names release earnings this week including GD, BA, RTN and LMT. The sector is obviously facing scrutiny given the implications of the super committee and while they companies have been taking steps to mitigate the concerns (dividend boosts), their guidance will be instructive. As well, we expect earnings from DAL and UAL. Coming on the heels of AMR’s report, industry capacity will be something we’re keeping an eye on. AKS and X report and we’ll be looking for any impact from lower steel prices. And in the consumer staples sector, PG and CL report. The staples sector is arguably the most impacted by commodity price fluctuations but is also arguably the most stable in the face of weak demand. Many companies have successfully passed on price increases thus far and we’ll be watching to see if they continue to do so. We remind investors that in the 2002-2007 commodity cycle, profit margins expanded in every sector, including staples.
As for the economy, the big releases will be the above-mentioned Case-Shiller on Tuesday, and the Advance Q3 GDP report, coming out Thursday.
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