Enough about the Federal Reserve. Enough about China. Enough about the debt ceiling. It’s about the fundamentals this week as Alcoa (AA) kicks off the third quarter earnings season on Thursday.
Overall things aren’t looking so good: According to Factset, earnings are expected to decline 5.1% for what could be the first back-to-back quarterly earnings decline since 2009.
No matter how you look at it, corporations are under pressure. Indeed, in a recent note to clients Barclays Capital highlighted declining profit margins as a big warning flag, given that it almost always comes in combination with an economic recession. The only non-recession decline in profitability on the scale we’re seeing now was in 1985.
With the stage set, here are five earnings results to keep an eye on in the coming days.
Alcoa (AA) — Thursday, October 8
Alcoa (AA )is expected to report earnings of 14 cents per share on revenues of $5.69 billion. The company was in the headlines recently for announcing a plan to separate itself into two, independent publically-traded companies dividing its upstream and downstream businesses.
Alcoa missed estimates in July, reporting earnings of 19 cents vs. the 23 cents the Street was looking for.
Intel (INTC) — Tuesday, October 13
Analysts are looking for Intel (INTC) to report earnings of 59 cents per share on revenues of $14.24 billion. All eyes will be on how well the much-hyped launch of the Windows 10 operating system boosted demand for PCs.
I’m skeptical, since Microsoft is giving it away for free, reducing the incentive to buy a new computer. This is corroborated by continued weakness in memory prices. Back in July, the company reported better-than-expected earnings and revenues.
JPMorgan Chase (JPM) — Tuesday, October 13
JPMorgan Chase (JPM) is expected to report earnings of $1.38 per share on revenue of $23.76 billion when it reports. Bank stocks have been rising and falling based on the movements of long-term Treasury yields, which in turn effect net interest margins.
Investors will also be looking at whether recent market volatility has affected investment banking results. Back in July, the company reported an earnings beat but a revenue miss on weakness in credit and securitized products.
Netflix (NFLX) — Wednesday, October 14
Netflix (NFLX) is expected to report earnings of eight cents per share on revenues of $1.75 billion. The streaming giant has been the center of a number of stories from chatter it will soon enter the Chinese market to increasing competition from the likes of Amazon.
Back in July, the company reported better-than-expected results on solid streaming subscription additions.
General Electric (GE) — Friday, October 16
General Electric (GE) is expected to report earnings of 26 cents per share on revenues of $28.98 billion. The company has been in focus this week on a report that activist fund Trian has acquired a $2.5 billion stake and will be seeking reforms such as cost cutting and debt-funded buybacks to boost the share price.
Back in July, the company reported in line results on a 1.4% drop in revenues.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. A two-week and four-week free trial offer has been extended to InvestorPlace readers.
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