Thứ Tư, ngày 23 tháng 7 năm 2014

What to Watch in The Day Ahead; Thursday, July 24




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Amazon is expected to report a loss of 15 cents per share in the second quarter, sharper than

the 2 cents per share loss posted a year ago. The deeper loss partly reflects the e-commerce

giant’s aggressive expansion into new business segments and regions. The company is investing

heavily in China, home to rival Alibaba.com, as well as India, Italy and Spain.


Diversified manufacturer 3M is expected to post quarterly earnings growth of 11 percent on a 4

percent rise in revenue. It is 3M’s first quarterly report for new Chief Financial Officer

Nicholas Gangestad.


Visa is expected to post a rise in third-quarter earnings, as more people around the world use

plastic instead of cash to make purchases. The company has said that fresh sanctions on Russia

will have no effect on it. Visa has also recently launched a new digital wallet, which analysts

say, is aimed at taking on the might of PayPal when it comes to online shopping.


The U.S. Labor Department is scheduled to issue its weekly update initial jobless claims which

analysts expect to have touched 308,000. (0830/1230) The Commerce Department’s data on sales of

new homes is expected, which likely slipped in June to a 479,000-unit pace from 504,000 units in

May. (1000/1400) United States-Markit PMI Flash July prelim numbers are expected to show an

increase to 57.5. (0945/1345) The Federal Reserve Bank of Kansas City is scheduled to issue its

composite and manufacturing outlook indices for July. (1100/1500)


Union Pacific is scheduled to release second-quarter results. The company has been able to

charge more to move goods across the country as it takes advantage of higher demand for autos

and industrial shipments. Investors will be looking for comments on further price increases and

whether the recovery in coal shipments is sustainable.


Ford Motor is scheduled to issue its first quarterly earnings under its new CEO Mark Fields.

Investors will look to see if Ford adjusts its full-year outlook of $7 billion to $8 billion of

pre-tax profit and any signals whether the launch of the F-150 made-with-aluminum pickup truck

is on track. Investors will also look for signs that China production plans are progressing well

and that problems with currency issues in South America are baked in to Ford’s planning.


GM is scheduled to report second-quarter earnings, during which they will provide further

details on the costs associated with the defective ignition switch linked to at least 13 deaths.

Investors may be more focused on the turnaround efforts in Europe, where GM now expects to

return to profit by mid-decade. The company previously said it was tracking ahead of profit

estimates for the year, excluding the recall costs.


Caterpillar, the world’s largest maker of earth-moving mining and construction equipment, is

likely to release its second-quarter results.


Bristol-Myers Squibb is expected to report flat earnings due to the loss of diabetes drugs that

it recently sold to longtime partner AstraZeneca Plc. Investors will pay most heed, however, to

the company’s promising array of experimental immuno-oncology drugs and how they are shaping up

against potential blockbuster products being developed by Merck and Swiss drugmaker Roche.


U.S. drugmaker Eli Lilly is expected to report sharply lower second-quarter sales and earnings,

hurt by generic competition for its Cymbalta depression treatment. But investors will be more

focused on 2015, when the company’s three-year patent cliff ends, and how well its emerging

lineup of new prescription drugs will restore earnings growth.


Southwest Airlines is expected to post higher second-quarter earnings as demand from leisure

travelers picked up. Profit is expected to rise to 61 cents a share from 38 cents a year

earlier. Unit revenue, an important measure, could rise more than 8 percent, suggesting full

planes and pricing power for Southwest. Separately, American Airlines Group is expected to

report profit of $1.94 a share for the second quarter. Passenger revenue per available seat mile

is expected to rise up to 6.5 percent. The company’s outlook for the current quarter will be the

key focus. Meanwhile, United Continental is expected to report a higher quarterly profit as it

cut costs and benefited from travel demand. Analysts expect $2.16 a share for the second

quarter, compared with $1.35 a year earlier. Separately, Alaska Air Group is expected to post a

higher second quarter, aided by strong demand. Analysts expect profit of $1.11 a share on

average, compared with 74 cents a year earlier. Alaska Air has built a solid reputation as a

niche carrier and has raised ancillary revenue from higher checked bag and increased flight

change and cancellation fees, but it faces greater competition in its home market of Seattle as

Delta Air Lines builds a hub there. Also, U.S. carrier JetBlue Airways is expected to post a

higher second quarter profit, benefiting from increased leisure travel. Analysts expect profit

of 19 cents a share on average, compared with 11 cents a share a year ago. JetBlue has taken

steps to improve performance that include adding faster, satellite-based WiFi and lie-flat

seating to cross-country flights but has underperformed other carriers on metrics such as return

on capital and has had hurdles keeping costs down.


Unilever is expected to report higher second-quarter sales, helped by strength of its personal

care and household products and a later Easter holiday.


Chinese Internet search engine Baidu is expected to report strong revenue growth in the second

quarter, as its fast-growing mobile business as well as some recent acquisitions boost the

topline. With Baidu increasing investments in mobile and on marketing though, investors will

also be on the lookout for any potential impact on profit margins.


Celgene is likely to report an increase in second-quarter sales and profit after high costs

weighed on first-quarter results. As the company awaits U.S. and European approval for use of

the biotech’s flagship multiple myeloma drug Revlimid earlier in the disease treatment,

investors will be looking for the Celgene to raise its full-year forecast as a sign of a

stronger second half of 2014.


Starbucks is expected to report good, but not blow-out, results for its latest quarter. The

world’s biggest coffee chain is one of the best-performing U.S. restaurant operators, and any

stumble – real or perceived – will be punished by investors.


Nasdaq is expected to report higher year-over-year earnings driven by U.S. acquisitions the

transatlantic exchange operator made last year. Chief Executive Bob Greifeld may use the

earnings call to highlight Nasdaq’s views on U.S. market structure, particularly around

broker-run trading platforms, known as “dark pools,” which have been taking market share from

the exchanges and have been in the news following the New York Attorney General’s recent case

alleging securities fraud by Barclays in its U.S. dark pool.


Raytheon is scheduled to report second-quarter results. Analysts will want to know about any

updates on the company’s homeland missile defense system contract with the U.S. defense

department. The DoD said in July that it could switch from the current systems built by Raytheon

to a new design being offered by Boeing.


Canon, the world’s biggest camera maker, is scheduled to report results for the April-June

quarter, after a tough year in fiscal 2013 as the high-end camera market shrank.


Wipro, India’s third-largest software services exporter, is expected to say net profit rose by a

third in the quarter ended June boosted by a surge in demand for IT outsourcing services by its

western clients. Wipro, which competes with Infosys and Tata Consultancy, said in April it

expects a stronger year ahead on increased spending by overseas clients as they look to cut

costs and boost efficiency. Focus will be on management comments on plans to take any aggressive

steps towards servicing digitization needs for clients, a move both Infosys and TCS have made.

The company’s comments on demand and the pricing environment we well as its MA plans to boost

growth in markets like Europe and Japan will also be in focus.


Potash Corp of Saskatchewan is likely to report second-quarter results that it warned in April

would be lower than the previous year. Weak potash prices due to over supply and slow demand

growth have lowered profits for potash producers. Of interest will be new CEO Jochen Tilk’s

first conference call with analysts, where he will likely be asked to explain his philosophy on

emphasizing price over sales volume.


Oil and natural gas producer Noble Energy is expected to report a higher second-quarter profit

on a jump in production from U.S. shale fields. Noble is developing giant natural gas fields in

the eastern Mediterranean. Investors will be looking to see if Noble still plans to sell some

stake in the Leviathan project after Australia’s top gas producer Woodside Petroleum ditched

plans to take a stake. Noble had been seeking Woodside’s experience in LNG projects to

kick-start exports sooner. Noble and its partners in the field said last month that they had

signed a preliminary agreement with British oil and gas company BG Group for export to BG’s LNG

plant in Egypt.


Property and casualty insurer Chubb’s second-quarter results are expected to be line with

estimates. Chubb is likely to benefit from low claims and higher rates. Investors will look out

for the company’s forecast for the rest of the year, including its plans for rate increases.


Medical device maker Zimmer Holdings is likely to report its second-quarter earnings before the

bell. Separately, Boston Scientific, which makes heart devices, is expected to report

second-quarter earnings that are expected to increase a bit from a year earlier after cost cuts.


Starwood’s group bookings are likely to see an impact from the timing of Easter holiday falling

in the second quarter this year instead of the first. The first of the hotel companies to

report, Starwood should benefit from tight supply of hotel rooms and higher occupancy in North

America as seen in the last few quarters. During the quarter, Starwood’s finance chief Vasant

Prabhu quit after nearly a decade and Alan Schnaid was appointed interim CFO.


Encana Corp, Canada’s largest natural-gas producer, is scheduled to report second-quarter

results. Weary of low prices for its mainstay fuel, the company is trying to recast itself as an

oil producer, most recently with the $3.1 billion acquisition of properties in the Eagle Ford

region of Texas that added 53,000 bpd of oil output. The earnings report is expected to offer

updates on its oil strategy and whether it will direct additional resources to boosting gas

production now that prices are above $4 per thousand cubic feet.



Nucor, the U.S. steel producer, is expected to report higher second-quarter earnings. The

company warned last month that results were likely to come in at the low end of its previous

forecast after a shutdown at a new facility in Louisiana. Plant volumes have been good but

yields need work, Nucor has said. Separately, Posco, backed by Warren Buffett, plans to announce

its April to June quarter earnings.


Teck Resources is expected to report a drop in earnings on the back of weaker metallurgical coal

and copper prices. Analysts expect earnings of 12.0 Canadian cents per share compared with 34

Canadian cents a year earlier. The market will be eager to hear Teck’s views on the coal market,

which remains depressed and has seen a series of production cuts from higher-cost players.


Under Armour, the athletic gear maker, had warned in April that growth in 2014 might not be as

strong as last year when the company benefited from the relaunch of its bags business. However,

analysts’ expect second-quarter revenue to have grown, helped by higher sales of sports apparel

to women and teens during the warmer months of May and June and as mall traffic improved. Gross

margin is also expected to improve due to lower inventory in its Factory House outlet stores,

lower air freight expenses, and lower product input costs for its accessories product line.

Analysts expect Under Armour to beat revenue expectations.


Royal Caribbean is expected to report second-quarter earnings before the market opens. The

company has already forecast a strong 2014 due to rising demand in Europe and Asia and has

raised its full-year profit forecast. Investors will be keeping an eye on booking volumes and

net yields – a metric that blends ticket prices and money spent onboard.


Diamond Offshore, one of the world’s top five rig contractors, is expected to report a

second-quarter profit higher than market expectations. The company has been cutting costs

through partially de-manning rigs amid soft demand. Diamond Offshore, which hiked prices last

quarter, could sustain margins this quarter as drilling in the Gulf of Mexico improves.


Investment bank and asset manager Lazard is likely to report results for the quarter. It was a

strong period for both of its key businesses, and analysts expect earnings of 57 cents per

share, up from 45 cents per share a year earlier.


Flextronics International, the Singapore-based contract manufacturer, is expected to report

first-quarter results slightly below estimates. The company could forecast lower-than-expected

results for the second quarter as uncertainly surrounds its links to Google after the search

giant agreed to sell its Motorola handset division to China’s Lenovo Group Ltd in January.

Flextronics makes and assembles desktop PCs for Lenovo but does not make mobile phones for the

Chinese company. Separately, Logitech, the computer accessories maker is due to report first

quarter results.


While new orders have been slow, D.R. Horton, expected to release second-quarter results, has

been able to raise prices of its homes. Investors will be looking for comment on how the company

performed in the spring selling season – traditionally the strongest season for homebuilders.

Separately, PulteGroup, scheduled to report second-quarter results, has booked fewer orders than

most large U.S. homebuilders this year as its small land bank forced it to cut the pace at which

it builds homes. Investors will be watching for comment on how Pulte and D.R. Horton expect to

sustain the increase in selling prices, especially after Lennar, the second-largest homebuilder,

said last month that the spring selling season was weaker than expected.


Cliffs Natural Resources is expected to report a second-quarter loss on weaker commodity prices

and possible continued spillover into the quarter of the impact of severely cold winter weather

in the first quarter. Investors will focus on the proxy battle raging at Cliffs, where U.S.

hedge fund and shareholder Casablanca Capital is trying to replace a majority of the directors

on the company’s board.


Pandora, the popular online streaming music company, is expected to report its second-quarter

results as it faces stiff competition from the likes of Spotify and Apple. Also, analysts expect

Qlik and Informatica to report revenue growth driven by strong demand for business data

analytics software. Informatica is expected to benefit more from the European market, while Qlik

is likely to post gains in the United States.


Riverbed Technology, the network equipment maker, warned earlier this week that its

second-quarter adjusted revenue will be lower than its forecast, because of delays in closing

some large North American deals. Analysts say the company is facing lower demand for its

wide-area network optimization products. Separately, RF Micro Devices will likely post

first-quarter results in line with estimates. The Apple supplier is expected to forecast

second-quarter above estimates as it benefits from the ramp up of the iPhone 6 build – where

analysts see RFMD content up 75 percent compared to the earlier version.


Dunkin’ Brands, the parent of Dunkin’ Donuts and Baskin-Robbins, is expected to outperform rival

McDonald’s in the second quarter, which is expected to have remained weak for fast-food

operators.


Canada’s largest oil and gas drilling contractor, Precision Drilling, is expected to report a

higher second-quarter profit, helped by effective utilization of rigs and increased drilling

activity in North America. Analysts will be looking for the company to increase its presence

internationally. The company recently announced a partnership with Schlumberger, covering

directional drilling technology, service delivery, and marketing, which should help it cut costs

and offer more attractive services to its customers.


Rogers Communications, Canada’s largest wireless phone carrier and a major cable company, is

scheduled to report second-quarter results. The company has been struggling to maintain wireless

growth recently, leading new CEO Guy Laurence to scale back on promotions to protect margins.

Investors will be eager to see improvements in this unit, the company’s single largest source of

revenue. It has spent heavily to acquire more airwaves and the rights to broadcast professional

hockey.


Townsquare, the radio station operator, backed by private equity firms such as Oaktree Capital

and GE Capital, is expected to raise about $140.8 million at the top-end of its expected price

range $14-$16 per share. The company, which operates websites such as TasteofCountry.com and

PopCrush.com, also provides digital advertising services to music-focused websites like

JustJared.com and HypeMachine.com among others. Formerly known as Regent Communications, it

emerged from bankruptcy in 2010. At the top end of the expected price range, Townsquare will be

valued at about $268.8 million.


(Reporting By Nandi Kaul; Editing by Sriraj Kalluvila)




What to Watch in The Day Ahead; Thursday, July 24

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