The stock market’s second-quarter earnings season is really heating up now, with high-profile reports by the likes of International Business Machines Corp. (NYSE:IBM), Netflix.com, Inc. (NASDAQ:NFLX), Microsoft Corporation (NASDAQ:MSFT) and Bank of America Corp (NYSE:BAC) already in the bag. Things continue to ramp up next week, giving investors a lot to chew on.
Not only are policy decisions from the Bank of Japan and the Federal Reserve due, but we will also see the major oil companies report results as well. With energy prices taking a new turn lower, investors are about to be reminded of the fact corporate earnings are in an ongoing recession with no end yet in sight.
As a result, investors should keep an eye on these five large-cap stocks set to report results with market moving implications: Apple Inc. (NASDAQ:AAPL), The Coca-Cola Co (NYSE:KO), Boeing Co (NYSE:BA), Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX).
Apple (AAPL)
AAPL has been a highlight (or lowlight?) of the last couple of earnings seasons. First, it was niggling concerns about iPhone demand and sales in China. Then, last quarter, iPhone sales dropped on a year-over-year basis for the first time ever, confirming the company’s innovation slowdown and smartphone market saturation.
The latest obsession are concerns over an incremental update to the iPhone 6 form factor for the iPhone 7 launch later this year and evidence of cratering sales of the Apple Watch. We’ll know more the the company reports results on Tuesday after the close. Analysts are looking for earnings of $1.39 per share (vs. $1.85 last year) on $42.1 billion in revenue — marking the second consecutive quarter of falling profitability.
Coca-Cola (KO)
Consumer staples stocks like KO have been a bright spot for the market this year, shrugging off scary declines that rattled many other sectors. But the earnings drag that has plagued stocks in general — on problems like a stronger dollar, weaker energy prices, and uneven global demand — is having an affect here too.
When KO reports results on Wednesday before the open, analyst are looking for earnings of 58 cents per share (vs. 63 cents previously) on $11.6 billion in revenue — marking the fourth consecutive quarter of declining operating profit.
Maybe this is the quarter investors realize that even companies like KO aren’t immune to the forces weighing on corporate profitability.
Exxon Mobil (XOM)
Exxon Mobil has been in an inexorable uptrend since January as crude oil has lifted off of its lows on hopes of a Russia-OPEC oil supply freeze deal that never came to fruition. In the process, the bulls got a little overzealous, as shown above, resulting in a massive separation of XOM’s share price from the rise in energy prices.
The company will report results on Friday before the bell. Analysts are looking for earnings of 64 cents per share on revenues of $64 billion. Compare that to the earnings-per-share peak in 1Q14 of $2.10 — a 70% decline in profits — despite the fact that XOM shares have nearly returned to their 2014 high.
Chevron (CVX)
Like XOM, CVX shares have surged higher since bottoming back in January on hopes the worst for crude oil has past. With gasoline inventories bloated, short-term oil supply disruptions fading and U.S. production increasing again, a breakdown in energy prices — and thus energy earnings — looks likely in the second half of the year.
We’ll know more when Chevron reports on Friday before the bell. Analysts are looking for earnings of 34 cents per share (vs. 30 cents a year ago) on revenues of $29.6 billion.
Boeing (BA)
BA shares have been in a holding pattern since late 2013 on concerns that despite a boost to airlines from lower energy prices, there is evidence of growing industry oversupply weighing on profitability, and thus the specter of new orders. Also, upstart competitors in emerging market economies like China and Brazil threaten the de facto duopoly BA enjoys with Airbus (OTCMKTS:EADSY)
We’ll know more when the company reports results on Wednesday before the bell. Analysts are looking for earnings of $2.26 per share (vs. $1.62 last year) on revenues of $24 billion.
Anthony Mirhaydari is founder of the Edge and Edge Pro investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
