(The Day Ahead is an email and PDF publication that includes the day’s major stories and Amazon is expected to report a loss of 15 cents per share in the second quarter, sharper than Diversified manufacturer 3M is expected to post quarterly earnings growth of 11 percent on a 4 Visa is expected to post a rise in third-quarter earnings, as more people around the world use The U.S. Labor Department is scheduled to issue its weekly update initial jobless claims which Union Pacific is scheduled to release second-quarter results. The company has been able to Ford Motor is scheduled to issue its first quarterly earnings under its new CEO Mark Fields. GM is scheduled to report second-quarter earnings, during which they will provide further Caterpillar, the world’s largest maker of earth-moving mining and construction equipment, is Bristol-Myers Squibb is expected to report flat earnings due to the loss of diabetes drugs that U.S. drugmaker Eli Lilly is expected to report sharply lower second-quarter sales and earnings, Southwest Airlines is expected to post higher second-quarter earnings as demand from leisure Unilever is expected to report higher second-quarter sales, helped by strength of its personal Chinese Internet search engine Baidu is expected to report strong revenue growth in the second Celgene is likely to report an increase in second-quarter sales and profit after high costs Starbucks is expected to report good, but not blow-out, results for its latest quarter. The Nasdaq is expected to report higher year-over-year earnings driven by U.S. acquisitions the Raytheon is scheduled to report second-quarter results. Analysts will want to know about any Canon, the world’s biggest camera maker, is scheduled to report results for the April-June Wipro, India’s third-largest software services exporter, is expected to say net profit rose by a Potash Corp of Saskatchewan is likely to report second-quarter results that it warned in April Oil and natural gas producer Noble Energy is expected to report a higher second-quarter profit Property and casualty insurer Chubb’s second-quarter results are expected to be line with Medical device maker Zimmer Holdings is likely to report its second-quarter earnings before the Starwood’s group bookings are likely to see an impact from the timing of Easter holiday falling Encana Corp, Canada’s largest natural-gas producer, is scheduled to report second-quarter
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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.
percent rise in revenue. It is 3M’s first quarterly report for new Chief Financial Officer
Nicholas Gangestad.
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.
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)
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.
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.
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.
likely to release its second-quarter results.
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.
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.
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.
care and household products and a later Easter holiday.
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.
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.
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.
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.
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.
quarter, after a tough year in fiscal 2013 as the high-end camera market shrank.
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.
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.
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.
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.
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.
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.
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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