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AHEAD
Markets next week will be dominated by earnings, as big oil,
healthcare and several notable social media names lead the pack in
what has so far been a middling earnings season, save for some
giants that have far exceeded expectations. Facebook, Exxon Mobil
and Pfizer are all on the docket. The market will also gravitate to
the Federal Reserve's two-day meeting, the last before September,
which still looms as the first possibility for an interest-rate
increase from the Fed.
Facebook Inc is expected to grow revenue, excluding the impact
of a strong dollar, according to Wall Street analysts. Analysts
expect the company's ongoing traction with various segments of
advertisers to help Facebook capturing a growing share of digital
advertising budgets. When it posts its second-quarter results on
Wednesday, investors will keep a close watch on costs and whether
the company can keep up growth in monthly active users. Twitter
Inc, which has been struggling with slowing user growth, is
expected to report second-quarter revenue on Tuesday, below
analysts' expectations, according to Thomson Reuters StarMine.
Investors will look for commentary on the progress in the direct
response ads. They will also be on the lookout for updates on the
ongoing CEO search and the impact of a strong dollar. On Thursday,
professional social network LinkedIn Corp is expected to report
second-quarter revenue slightly above average analyst estimate,
according to Thomson Reuters StarMine. Investors will keep a close
watch on the company's hiring business, in which revenue growth
slowed to 36 percent in the first quarter.
Exxon Mobil Corp, the world's biggest listed oil company, and
its U.S. peer, Chevron Corp, are scheduled to post second-quarter
earnings on Friday. The world's top oil companies are set to report
yet another sharp drop in quarterly profits that could force more
spending cuts due to a dim outlook for oil prices.
Procter & Gamble Co and Colgate-Palmolive Co, the two U.S.
personal care products companies with big operations outside the
United States, have been working to reduce the impact of a stronger
dollar on sales. While Colgate has raised prices in emerging
markets, P&G is setting up manufacturing plants there to
localize supply chain activities. When Colgate reports its
second-quarter results and P&G its fourth quarter on Thursday,
they are expected to beat analysts' estimates on revenue, but miss
on profit, according to Thomson Reuters StarMine. Investors will be
keen on any forecast updates and changes in strategy.
Thursday's data will show the U.S. economy is likely to have
expanded at a much faster pace in the second quarter. The gross
domestic product is projected to have risen at a 2.6 percent annual
rate in the April-June quarter, compared to a contraction of 0.2
percent annual rate in the January-March quarter. Separately, the
Labor Department issues Employment Cost Index on Friday. On the
same day, the University of Michigan's final July reading on the
overall index on consumer sentiment is expected to come in at 94.0,
a bit higher from a preliminary reading of 93.3. On Tuesday,
financial firm Markit will release its preliminary reading of
Purchasing Managers Index for the services sector, which is
expected to increase to 55.0 from 54.8 in June. Pending Home Sales
Index on Wednesday forecast to have risen 1.0 percent, compared to
June's 0.9 percent increase.
Mastercard Inc is scheduled to post second-quarter results on
Wednesday. A strong dollar is expected to hurt the world's No.2
debit and credit card company, which gets 60 percent of its payment
volumes from outside the United States. About 10 percent of
transactions made using the company's plastic are on gasoline,
according to analysts, and the low oil prices remain a drag on
Mastercard's earnings. Arch rival Visa is in talks to buy Visa
Europe, which could mean a more powerful threat in Europe, where
Mastercard has a strong presence. The company is expected to report
second-quarter earnings in line with analysts' expectations,
according to Thomson Reuters StarMine.
On Tuesday, Merck & Co, the No. 2 U.S. drugmaker, is
expected to report lower sales for the second quarter, hurt by the
stronger dollar and divestiture of its consumer care business. On
the same day, Pfizer Inc, which captures 60 percent of its revenue
from abroad, is expected to report lower second-quarter earnings as
the stronger dollar hurts sales outside the United States.
Amgen Inc is expected to report higher second-quarter sales and
profit and may revise its full-year forecasts on Thursday.
Investors will be looking for details on the company's plans for
the launch of its just approved injectable cholesterol treatment in
Europe, as well as its expectations for likely U.S. approval and
launch in the coming weeks. Biotechnology company Vertex
Pharmaceuticals Inc is expected to report lower-than-expected
second-quarter earnings, according to Thomson Reuters StarMine.
Vertex was the first to develop a drug to treat the underlying
cause of a rare lung scarring disorder called cystic fibrosis (CF).
On Wednesday, investors will be looking to see how well the company
is faring following the approval of Vertex's latest CF drug, which
allows the drugmaker to address a population of 8,500 patients, up
from 2,000.
Anthem Inc, which agreed to buy smaller rival Cigna recently,
announces second-quarter earnings on Wednesday. It is expected to
report a higher profit, but all ears will be on any signs that
medical costs are a problem and any further commentary on its
$54-billion deal for Cigna. Cigna Corp reports a second-quarter
profit on Thursday that is expected to be higher. On Wednesday,
Humana Inc, which has recently agreed to be bought by Aetna, posts
its second-quarter earnings. The company warned of its weaker
outlook for 2015 already due to higher medical costs in Medicare
Advantage customers, and analysts have lowered their expectations
for the quarter. On Tuesday, health insurer Centene Corp is likely
to report a better-than-expected second-quarter profit, according
to Thomson Reuters StarMine.
On Tuesday, chemicals company DuPont Co is expected to report a
lower second-quarter profit, hurt by a fall in agriculture earnings
and a stronger dollar. DuPont derives about 60 percent of its sales
from outside North America. The company in May defeated a campaign
by Trian to land seats on DuPont's board, delivering a landmark
setback to one of the most influential activist investor firms. The
company has moved its focus to its agri business, but seed sales
have been weighed down by a switch to soybean from corn in North
America. Corn seed sales account for about half of the sales from
the agricultural products unit, the company's largest.
Ford Motor Co is scheduled to post second-quarter earnings on
Tuesday. Recently, Ford had announced that it is looking to a raft
of new sedan and SUV launches in China later this year to regain
momentum in the world's largest auto market, after its sales barely
grew in the first half of 2015.
Canadian plane and train manufacturer Bombardier Inc reports its
financial results for the second quarter on Thursday. Analysts and
investors may be looking for news on the Global 7000/8000, its
newest business jets, which are scheduled to go into service in
2016 and 2017 respectively. Separately, Textron Inc, the maker of
Beechcraft and Cessna aircraft, announces second-quarter results on
Tuesday. The company is expected to benefit from burgeoning
international demand, especially in its commercial market.
Video game publisher Electronic Arts Inc reports first-quarter
results on Thursday. The company is expected to report a quarterly
profit above estimates, according to Thomson Reuters StarMine. EA
is expected to benefit from its fast-growing digital business,
which includes software distributed through the Internet.
Investors, analysts and gamers alike will be looking any details on
the company's biggest release of the year, "Star Wars Battlefront",
which comes out in mid-November before the new "Star Wars"
movie.
Satellite-TV provider DirecTV is expected to report
second-quarter earnings slightly below analysts' average estimate,
according to Thomson Reuters StarMine. When it reports on Thursday,
all eyes will be on AT&T's $48.5 billion merger with DirecTV
that is expected to close soon as U.S. telecom and antitrust
regulators signaled a green light for the merger.
On Thursday, wireless chip maker Broadcom Corp is expected to
report better-than-expected second-quarter profit and revenue,
according to Thomson Reuters StarMine. The company has been
benefiting from strong demand for Apple's iPhone 6 and Samsung
Electronics' Galaxy S6. Investors will look for details on whether
the company's exit from the baseband chips business is creating
competitive disadvantage due to the lack of a 4G product.
On Thursday, cable provider Time Warner Cable Inc, which is
being bought by Charter Communications, is expected to report
second-quarter revenue slightly below the average analyst estimate,
according to Thomson Reuters StarMine. Last quarter, the company
added 30,000 residential video customers, its first increase since
2009 and well above analysts' average estimate, indicating a
turnaround for the company. Analysts are looking for any update on
the deal, future investments and guidance.
On Thursday, T-Mobile US Inc, the No. 4 U.S. wireless carrier,
is expected to report second-quarter revenue ahead of analysts'
average estimate, according to Thomson Reuters StarMine, helped by
customer wins that are drawn to its low-cost plans. The company's
profit, however, is expected to take a hit, hurt by costs related
to aggressive marketing campaign.
On Tuesday, specialty glass maker Corning Inc is expected to
report second-quarter revenue below analysts' expectations,
according to StarMine data. Analysts expect display glass demand to
be hurt by weak sales of personal computers and lower TV sales due
to instability in China, which accounts for a quarter of global TV
demand. Investors will look to see if adoption of 4K TV and
continued demand for Gorilla glass can make up for the
weakness.
Microsoft Corp, the world's largest software company, releases
Windows 10 on Wednesday. Windows 10 is the latest version of its
venerable operating system which is fighting for relevance in a new
mobile-computing world dominated by Apple and Google.
U.S. pipeline company Williams Companies Inc, which is in the
middle of a takeover battle with Energy Transfer Equity LP, is
expected to report a higher profit for the second quarter on
Wednesday. The focus with the quarter will be on Energy Transfer's
offer. Energy Transfer said this month it would take any steps
necessary to acquire Williams, after the company rebuffed the offer
and said it was it was exploring strategic options.
Mondelez International Inc, the maker of Cadbury chocolate and
Oreo cookies, is likely to report second-quarter sales below
analysts' estimates, according to Thomson Reuters StarMine. The
company has been grappling with volatility in markets such as
Europe, where sales have fallen for the last three quarters.
Investors will look for updates on the company's discussion with
Wal-Mart to "revisit" the strategy change, market conditions in
Europe and progress on the sale of its French coffee brand, Carte
Noir, when it reports on Thursday.
D.R. Horton Inc, the largest U.S. homebuilder, is expected to
report higher revenue and profit for the third quarter on Tuesday
as it sold more homes at higher prices. Investors will be looking
out for an update on its full-year financial forecast.
The friendly pursuit by Canada's Potash Corp of Saskatchewan Inc
of German rival K+S tops the interest of investors and analysts in
the fertilizer sector, and Potash CEO Jochen Tilk will be asked
about his next move toward a potential $8-billion deal when the
company announces its second-quarter results on Thursday.
On Thursday, CME Group Inc reports second-quarter earnings,
weeks after closing its open-outcry futures trading pits because of
the shift of volume to computers.
Sirius XM Holdings Inc announces second-quarter results on
Tuesday. The company is expected to report robust customer wins for
its satellite radio service through the year, helped by strong U.S.
auto sales. People who buy new cars fitted with Sirius receivers
usually get free access for a few months, but must pay a fee to
continue the service. In April, the company raised its revenue and
subscriber addition forecast for the full year.
Akamai Technologies Inc, whose service helps speed up delivery
of online content, is expected to report second-quarter revenue and
profit marginally above estimates, according to Thomson Reuters
StarMine. However, when it reports its results on Tuesday, the
company's revenue is expected to take a hit from a stronger dollar,
as it rakes in about a quarter of its revenue from outside the
United States.
Western Digital Corp, the world's No. 1 hard-disk drive maker,
on Wednesday is expected to report fourth-quarter profit below
estimates, according to Thomson Reuters StarMine, as the company
has been facing slower growth in its cloud business, and lower
demand from its enterprise customers.
On Wednesday, Hilton Worldwide Holdings Inc, the owner of
Waldorf Astoria and Conrad brands of hotels, is expected to report
second-quarter revenue above analysts' estimates, according to
Thomson Reuters StarMine. With hotel occupancy in the United States
reaching record heights, analysts expect a spike in average room
rates, boosting revenue. Starwood Hotels & Resorts Worldwide
Inc is expected to post second-quarter profit and revenue below
estimates, according to Thomson Reuters StarMine. Investors will be
looking for updates on strategic and financial alternatives
announcement made last quarter, when it reports on Thursday.
On Thursday, U.S. refiner Marathon Petroleum Corp is expected to
report a higher second-quarter profit, helped by strong profit
margins. Gasoline crack spreads - the difference between crude oil
and gasoline prices- have risen on weak crude prices and robust
gasoline demand. Investors will look for details on the company's
expectations for the natural gas processing business. On the same
day, Valero Energy Corp is expected to report a rise in quarterly
profit, helped by robust gasoline demand and a steep fall in oil
prices.
Royal Caribbean Cruises Ltd reports second-quarter earnings on
Friday. The world's second-largest cruise operator is expected to
report quarterly profit and sales below analysts' estimates,
according to Thomson Reuters StarMine, hurt by higher fuel costs
and a strong dollar. Increased promotional and marketing spending
is likely to negatively impact margins as well. However, the
company is likely to benefit from its partnership with online
travel company Ctrip, which could lead to an increase revenue from
the Asia-Pacific.
Yelp Inc, the operator of consumer review website yelp.com, is
expected to report a second-quarter profit below the average
analyst estimate, according to Thomson Reuters StarMine data. When
it reports on Tuesday, investors will be looking for an update
whether changes to Google's search algorithm have negatively
affected Yelp's traffic.
On Tuesday, IAC/InterActive Corp, the owner of matchmaking
services Tinder and Match.com, is set to report a second-quarter
profit above Wall Street expectations, according to Thomson Reuters
StarMine. IAC, which announced plans to list part of its profitable
Match Group dating business, is expected to benefit from growth in
dating subscribers and revenue from its Vimeo video service.
On Wednesday, Shutterfly Inc, the online photo-sharing company
is expected to post a second-quarter profit slightly above the
average analyst estimate, according to Thomson Reuters StarMine.
Shutterfly is expected to benefit from a jump in the number of
customers using its service. On the same day, Canadian business
software maker Open Text Corp is expected to report a lower profit
for the fourth quarter. The company said in May it anticipates a
negative impact from a strong dollar in the quarter.
Ally Financial Inc reports second-quarter earnings on Tuesday.
The largest U.S. auto lender is expected to report a quarterly
profit, helped by higher U.S. auto loans originations. General
Motors replaced Ally with its current in-house financing arm,
General Motors Financial, for subsidized leases on Buick, GMC and
Cadillac vehicles, beginning in February. Ally, which also lost
exclusive agreements over the past two years with Chrysler, has
been working to increase its market share among other brands such
as Ford Motor and Nissan Motor. Ally also became the preferred
financing source for Mitsubishi Motors in the United States,
replacing the Japanese carmaker's captive finance company in
April.
Cybersecurity firm FireEye Inc will report second-quarter
results after the market closes on Thursday. The company has
benefited from governments and businesses ramping up spending to
protect their networks from increasingly sophisticated attacks.
Investors will look for signs of higher demand and updates on sales
of its on-premise equipment.
Rockwell Automation Inc, which makes automation systems that
help factories run smoothly, is expected to post a higher profit
for the third quarter on Wednesday, helped by lower costs. However,
revenue is expected to decline, hurt by a strong dollar.
The Western Union Co reports second-quarter earnings on
Thursday. The world's largest money-transfer company is expected to
report a quarterly profit, helped by higher fees from its
money-transfer services. Western Union is expected to face stiff
competition from digital payment processor PayPal, spun off from
eBay, after its acquisition of digital money transfer company
Xoom.
Goodyear Tire & Rubber Co announces second-quarter results
on Wednesday. The largest U.S. tiremaker has been cutting costs to
shrug off effects of a 9 percent rise in the dollar in the first
three months of the year that reduced revenues at almost all U.S.
companies with international exposure. Investors will be looking
for updates on how the currency is expected to impact results in
the rest of the year, given that the dollar fell 3 percent in the
three months ended June.
National-Oilwell Varco Inc posts second-quarter results on
Tuesday. The largest U.S. oilfield equipment maker is expected to
report a lower quarterly profit as a steep decline in commodity
prices weighs on demand. National Oilwell has expressed interest in
drilling assets being marketed by Halliburton. Halliburton may put
up other assets on the block to gain regulatory compliance of its
deal with Baker Hughes. Investors will want to know if National
Oilwell can snap up any of these assets.
On Friday, Imperial Oil Ltd, Canada's No.2 integrated oil
producer and refiner, is expected to report a fall in
second-quarter profit, hurt by a fall in crude oil prices. The
company has said that it would maintain a cautious spending outlook
in the months ahead. Investors will look for any commentary on cost
reductions. On Tuesday, Husky Energy Inc is expected to report a
big drop in quarterly profit due to an oil price slump. On the same
day, Consol Energy Inc is likely post a loss in the second quarter
due to weak commodity prices. On Thursday, Cenovus Energy Inc is
expected to report sharply lower second-quarter profit. The company
has said it plans to use the proceeds for other growth projects.
Investors will look for details on investments and cost-cutting
measures.
Willis Group Holdings Plc, the world's oldest insurance broker,
is expected to report a rise in second-quarter earnings on Tuesday,
but some analysts are wary of the impact of the significant
offshoring the company has quietly begun. Willis, like some of its
rivals, has been moving to grow its share of the lucrative benefits
insurance market, and agreed last month to an $18 billion merger
with human resources consultancy Towers Watson.
On Wednesday, USA Today publisher Gannett Co Inc is expected to
report third-quarter revenue, its first results after the spin-off
of Tegna, in line with analysts' estimates, according to Thomson
Reuters StarMine. Analysts are looking for guidance for the new
company and new investments it plans to make.
On Tuesday, Ingersoll Rand Plc, the maker of heating and air
conditioning systems, is expected to report second-quarter revenue
above estimates, according to Thomson Reuters StarMine. The
company's industrial business, which mainly receives revenue from
outside the United States, has been impacted by the strong dollar.
Investors will be interested to see if the growth in construction
and industrial markets will boost profits.
Spirit Aerosystems Holdings Inc, the maker of fuselages for
Boeing and Airbus, is expected to benefit from rising demand for
fuel-efficient aircraft and commercial planes. Investors will look
for comments from Spirit Aero on Boeing's deferred costs on its 787
program, when it announces second-quarter earnings on
Wednesday.
On Tuesday, solar panel maker SunPower Corp is expected to
report a much higher second-quarter profit, helped by stronger
demand from utilities and lower costs. The focus this quarter will
be on the company's forecast.
Friday's data will show the Canadian gross domestic product is
likely to remain unchanged in May after an unexpected contraction
in April. Separately, June producer prices are expected to have
increased by 0.5 percent from the previous month.
ON MONDAY, JULY 27
The U.S. Commerce Department releases data for non-defense
capital goods orders, excluding aircraft. A closely watched proxy
for business spending plans is expected to have risen 0.4 percent
in June.
Restaurant Brands International Inc, the company formed out of
Burger King's takeover of Tim Hortons, is expected to report a
higher second-quarter profit, helped by higher sales from its new
and popular menu items. The company had launched dark roast coffee
and crispy chicken club sandwich at Tim Hortons stores and spicy
BLT whopper sandwich at Burger King. Investors will look for
comments on the company's expansion plans and its efforts to lure
in more customers.
The head of Toyota's Scion brand, Doug Murtha, will discuss the
Japanese automaker's future plans for the youth brand, which has
had a spotty performance due to lack of product. The company in the
past has weighed repositioning Scion as a line of premium small
cars or adding a crossover or four-door sedan to the lineup.
(Compiled by Nivedita Balu; Edited by Maju Samuel)
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