Photo: Flickr Choo Yut Shing
24/7 Wall St. is probably not alone in noticing that there were very few earnings warnings issued by the major companies that dictate market trends going into the end of June.That and some recovering economic trends and lower commodity prices have all contributed to a feeling that the woes of Europe, as well as the woes of Japan and the tightening of China, are not quite as strong of headwinds that will easily kill the bull market.
Earnings season is approaching fast, and we are soon to get a direct reporting bias from many of the country’s top corporations. Whatever the reporting trend comes out to, the rest of the summer’s stock market bias is about to be set by this wave of earnings reports.
We looked at the current Thomson Reuters expectations for the past quarter and the coming quarter, and we have also added in data on prices and on recent trading ranges. More importantly, we have shown why these matter, what other companies or sectors they matter to, and added in additional colour of what to look for on each.
As a reminder, these estimates may change in the coming days and it is still possible that we will hear some extra pre-earnings data from some of these major companies. The idea is to identify these trends more than to give earnings estimates this far out.
On Friday, July 22, we will also get reports from Caterpillar, G.E., McDonald’s, and Honeywell. Those companies all matter for broad earnings analysis and for the broad economy. Our exclusion of those names is not for the rank of importance or market caps. They are not included because our take is that the tone and the real direction of earnings season will have already been set by the time those companies report earnings.
There are many other earnings which of course matter to the markets and to their sectors. This list includes the company which will have set the tone for earnings season by Wednesday, July 20 for the subsequent six-weeks thereafter. Many of these names have been performing well. It almost seems impossible to believe that the recovery is real if there were going to be last-minute waves and waves of earnings warnings from major companies. If any of these companies are in deep trouble over earnings, it is almost certain that they have already figured it out by now.
Yum! Brands reports on Wednesday, July 13, and Thomson Reuters has estimates of $0.61 EPS and $2.70 billion in revenues; next quarter estimates are $0.84 EPS and $3.03 billion in revenues.
At $56.30, the market cap is roughly $26 billion and the 52-week trading range is $38.43 to $57.04.YUM! is no McDonald's, but the investment community is likely to treat many aspects of the fast-food and casual dining segment based upon its report. What will matter is whether or not it offers a clearer picture for the casual dining trends domestically.
It will also act as a bellwether for the Chinese food and entertainment spending markets, where it is the go-to stock to make that determination. YUM! is also still working through PR issues at the Taco Bell level, even if the 'problems' were not exactly correct. Yum! could still be a top dividend rival of McDonald's in the years ahead.
Google did not confirm its earnings report until just this week. It is set to report earnings on Thursday, July 14. The online search giant, and online conglomerate, has estimates of $7.86 EPS and $6.53 billion in revenues; next quarter estimates are $8.30 EPS and $6.85 billion in revenues.
As a reminder, those sales are ex-TAC, or ex-Traffic acquisition cost revenues.
This matters for anything internet-related. It also matters for anything related to off-line advertising as well. It was just a short period ago that Google was tanking and heading well under $500.00, but a recent analyst call reiterated its same $800 price target.
Citigroup is due to report on Friday, July 15, and this will likely reset the tone for the rest of the banks.
Thomson Reuters has estimates of $0.97 EPS and $19.94 billion in revenues; next quarter estimates are $1.01 EPS and $19.89 billion in revenues. At $41.90, the market cap is roughly $122 billion and the 52-week trading range is $36.30 to $51.50. Citi is going to prelude Bank of America this year, and we are looking at Citi as the bank that will be used for the rest of the sector.
With Vikram Pandit having given a stated book value of $58.50 and a tangible book value of $46.90, shares are currently under $42.00. Just like with JPMorgan, we expect to hear about ongoing credit metric improvements.
Amazon is due on Monday, July 18. Thomson Reuters has estimates of $0.35 EPS and $9.36 billion in revenues; next quarter estimates are $0.49 EPS and $10.31 billion in revenues.
At $214.40 today, the market cap is roughly $97 billion, and the 52-week trading range is $105.80 to $214.45. Amazon may have tax issues in states, but the reality is that consumers buy items when there is tax and when there is not. We now use Amazon for the proxy for online and offline consumer spending because this offers a live reality in what would be a price-match environment.
This can have ramifications far and wide in retail. On a more specific note, we have been amazed at how the investing community has accepted that Amazon's major margin shrinkage has been without any real challenge to the stock. If investors cheer Amazon for one more quarter of earnings, it will be the next mega-cap stock as we have opined before.
AutoNation is due Monday, July 18, and it has estimates of $0.47 EPS and $3.45 billion in revenues; next quarter estimates are $0.47 EPS and $3.51 billion in revenues.
At $37.82 today, the market cap is roughly $5.6 billion, and the 52-week trading range is $18.08 to $37.86.
This is going to have to act as a prelude to Ford, GM, Toyota, and other auto sales figures for both new cars and used cars. The data has already shown some improvement in June, perhaps even better than what we would have expected when considering other slowdown data.
IBM is due on Monday, July 18, and it has estimates of $3.03 EPS and $25.35 billion in revenues; next quarter estimates are $3.18 EPS and $25.65 billion in revenues.
At about $177.50 today, the market cap is roughly $214 billion, and the 52-week trading range is $122.17 to $177.77. Keep in mind that this $177.77 high was just hit on Wednesday. IBM may matter less to the boots on the ground, but investors have to understand that its $170+ stock price influences the Dow Jones Industrial Average more than any other stock by a considerable amount due to the DJIA's price-weighted index status rather than being tied to market caps.
IBM, of course, impacts many stocks as other tech giants do, but it is this dominance of the DJIA that makes the most difference. We always look at the backlog, listed as $142 billion last quarter, but the key we are looking for is whether or not IBM still communicatesthat $20.00 EPS long-term goal or not.
Apple is due to report earnings on Tuesday, July 19. It has estimates of $5.69 EPS and $24.67 billion in revenues; next quarter estimates are $6.35 EPS and $27.63 billion in revenues.
At about $351.00, the market cap is roughly $325 billion and the 52-week trading range is $235.56 to $364.90.
Apple may move Apple-component part companies directly, but Apple indirectly sets the tone for all of tech now, even if its stock has stagnated before the most recent recovery. It is the champion of technology, and it now sets the tone. The ongoing discussions about the health of Steve Jobs are still present but seem to have taken a back-seat for the time being.
By the earnings date, we should have far more detail over Apple's newest iPhone and perhaps on when we should really expect the third version of the iPad. Apple's chart was starting to break, but it has recovered and Apple remains one of those stocks that is still under-owned today and one which investors will buy if they can get in at cheaper prices.
As a reminder, Apple is no longer as dominant in the NASDAQ-100 as it was in previous quarters.
Johnson & Johnson is due with its earnings on Tuesday, July 19, and the medical and consumer products giant has estimates of $1.23 EPS and $16.25 billion in revenues; next quarter estimates are $1.22 EPS and $16.0 billion in revenues.
At $67.48 today, the market cap is roughly $185 billion and the 52-week trading range is $56.86 to $67.75.
J&J remain under all-time highs even as shares are close to multi-year highs. What is so interesting is that the public has not yet gotten past the recalls and quality control issues, but investors have voted that the issue will fade in the sunset. The exit from drug-coated stents may be a line-item now since shares are right close to highs.
UnitedHealth Group is due with its health-insurance earnings on Tuesday, July 19. The company has estimates of $0.91 EPS and $25.22 billion in revenues; next quarter estimates are $1.10 EPS and $25.38 billion in revenues.
At $53.00 today, the market cap is roughly $57 billion, and the 52-week trading range is $28.29 to $53.27.
UnitedHealth may not move the market, but it sure can play a huge impact on other health insurance plan providers like Aetna, Humana, and others. We have seen increased dividends and increased share buybacks from the company and it raised guidance after its last earnings while simultaneously acknowledging the industry challenges.
There are still a few niche players and smaller players that can be acquired as well.
Intel reports earnings on Tuesday, July 19. The processor and chip-giant has estimates of $0.51 EPS and $12.82 billion in revenues; next quarter estimates are $0.59 EPS and $13.49 billion in revenues. At $22.75, the market cap is roughly $120 billion, and the 52-week trading range is $17.60 to $23.96.
The post-PC world has been a bit overstated if you look at Intel's most recent guidance still maintained double-digit growth. Its dividend trends have been helping as well. The company has close to 80% market share of PCs and it is very likely to set the tone for semiconductor-related companies even though some smaller chip stocks will have reported the week ahead.
One area we continue to look for data is in the post-PC era, as processors start to be included in more and more devices that are used by humans. This represents a far larger frontier than tablet PCs, even though Intel is soon to be a force in that market as well. Intel will also influence how the remaining chip and PC-related companies are going to be treated throughout earnings season this summer.
EMC is set to report on Wednesday, July 20. The storage products giant is currently expected to report $0.34 EPS and $4.73 billion in revenues; next quarter estimates are $0.0.37 EPS and $4.91 billion in revenues. At $27.78 today, the market cap is roughly $57 billion and the 52-week trading range is $17.90 to $28.73.
EMC Corporation remains the top bogey for the world of storage, and its VMware tracking stock (85% held more or less) dominates the virtualization market with its earnings the night before. We cannot help but wonder if EMC will finally get around to declaring a dividend or not.
The list of storage and even cloud-related companies that this can impact is numerous.