Earnings season is slowly winding down, but there are still many key sector-moving and market-moving companies that report their quarter and fiscal year-end results this week.
This week we have already seen very positive earnings from Hasbro (HAS), and its shares closed up in double-digit percentages on Monday despite an awful trading tape for the broad market. Yet Electronic Arts (ERTS) was so bad on lowered guidance that its stock was down close to 10% on the news.
Coca-Cola (KO) is up over 3% on slightly better-than-expected earnings, but the gains are from the unit case volume growth of 5% globally despite a 1% drop in North America. The real issue is what lies ahead for earnings for the rest of the week.
After the close on Tuesday Walt Disney Co. (DIS) and Baidu (BIDU) report. Both will be a key “tell” on their sectors. We wanted to take a look at many of the major companies on deck for the rest of the week as well. Included are consensus estimates from Thomson Reuters, as well as added history for traders and investors.
Disney (DIS) is expected to post $0.38 EPS and $9.66 billion in revenues. The company closed its Marvel acquisition at the end of the quarter, and it has been dealing with issues over concerns of discounting its theme park tickets while simultaneously not enjoying the same movie success as other producers. The earnings estimates in December were closer to $0.40 EPS, so be aware that this consensus has been brought lower.
On Baidu (BIDU), the entire issue of Google (GOOG) came up after the end of the last quarter. That means that the backward number may be overlooked unless it is grossly different in either direction from the $1.68 EPS and $180 million in revenues expected. Still, companies are expected to beat consensus estimates this earnings season. The biggest issue to account for is just how much this latest Google-China infighting has helped the company. his should lead to more market share wins for it, but if Baidu notes that it has not yet made or is somehow not expected to make a significant improvement, then it may leave even the most bullish feeling a little disappointed.
Sprint Nextel (S) remains the most questionable of the wireless operators. It has no iPhone, and it has lagged. The headline data may be the hardest to interpret from any reports due to it closing both the Virgin Mobile USA deal and the iPCS affiliate acquisitions. It also has the deep Clearwire (CLWR) tied for that 3G and 4G build-out. Estimates here are -$0.19 EPS and $8.03 billion. To show how different that is, its quarter a year ago revenues were $8.4 billion.
Activision Blizzard (ATVI) is on deck for Wednesday after the closing bell. While Electronic Arts (ERTS) may have set a negative bias, these two companies face a far different situation. Activision is coming off a very strong Call of Duty release, it has Guitar Hero and related games, and has the massive World of Warcraft from Blizzard up its sleeves. A more cautious or negative tone may have been set here, but the long and short of it is that Activision Blizzard is expected to do well.
Priceline.com (PCLN) is also after the closing bell on Wednesday. Priceline won’t move the airlines, the hotels and the broad travel sector or the overall market. But if there is one stock that active traders and earnings betters have loved to trade, it is Priceline. At $205 today, its 52-week trading range is $67.58 to $231.49. This one traded over 9 million shares at the last earnings report versus 1.2 million on an average day. The company has to beat earnings and raise guidance most likely to keep everyone happy, and those estimates are $1.68 EPS and $529.8 million in revenue.
On Thursday morning we get the blast from the past of the old Lucent days via Alcatel-Lucent (ALU). Is it possible that the company did well? Sure, as long as history is no guide. The pool of analysts is getting smaller and smaller and it does not help that the primary report will be in Euros. Estimates are $0.08 EPS on $6.33 billion in revenues. The earnings estimates have come down from $0.11 EPS in November or December. Some traders may have hoped for a Cisco Systems (CSCO) win being an Alcatel-Lucent win. It is possible, but most find it unlikely as many telecom and technology build-out providers have effectively stopped or slowed down on their tech spending from the combined company.
After the close of business on Thursday comes earnings from Las Vegas Sands (LVS). Because of the IPO the quarter will be harder to read, but we expect an earnings reaction to potentially be seen from Wynn Resorts (WYNN) and Melco-Crown PBL (MPEL) because of the Macau ties. What may be more important than anything is if it can echo what was said last quarter when it noted that it had more groups already on the books for 2010 than it was expecting to realize for all of 2009. The other consideration is not this used to be a $100 stock in 2007 — it was under $2.00 within the last 52-weeks and is technically a 10-bagger from its 52-week lows of $1.38.
