With a month to go until earnings season starts again, next week might seem set up to be a quiet one for earnings reports from the markets. But that’s not actually the case.
In fact, there are a number of key earnings reports next week in several key sectors. Oracle (NYSE:ORCL) and Red Hat (NYSE:RHT) are among the tech leaders releasing earnings. Fiscal Q4 earnings from AutoZone (NYSE:AZO) look particularly key as auto parts retailers have rebounded, and rivals O’Reilly Automotive (NASDAQ:ORLY) and Advance Auto Parts (NYSE:AAP) posted strong numbers of their own.
While those earnings reports will make headlines, they’re not even among the 3 biggest releases next week. An economic bellwether reports on Monday afternoon. And two very different stocks will try and reverse their own weakness — and potentially help their struggling sectors as well.
Between macro data and these 3 reports, next week will be anything but quiet.
3 Earnings Reports to Watch Next Week: FedEx (FDX)
Earnings Report Date: Monday, September 17, after market close
Traditionally, results from FedEx (NYSE:FDX) have been treated as a barometer for the economy as a whole. Better results for FedEx and rival United Parcel Service (NYSE:UPS) generally mean strong demand from consumers and businesses — and a strong economy.
That correlation has changed a bit of late, at least as far as the market treats the respective stocks. Concerns about Amazon.com (NASDAQ:AMZN) entering the delivery space itself have weighed on both stocks. FDX still trades 7% below January highs; UPS has traded basically sideways since late 2016.
So there’s a reasonable amount of pressure on FedEx’s fiscal Q1 release. And there will be quite a lot of attention paid. A transformation plan from UPS released this week disappointed investors, sending the stock down 3%. The market will want to know if FedEx has a better strategy going forward. Any weakness will lead to discussions over whether FedEx is losing share, or if the economy might finally be losing steam.
There are few companies whose reports can actually move markets, but FedEx still is one of them. And that’s why investors of all kinds should be watching closely on Monday afternoon.
3 Earnings Reports to Watch: General Mills (GIS)
Earnings Report Date: Tuesday, September 18, before market open
General Mills (NYSE:GIS) might seem an odd choice for this list, given that larger and more widely-held companies are reporting next week as well. But the Q1 report from General Mills could move stocks across the consumer packaged goods space.
That sector has struggled. With good reason, as I wrote back in May. Pressure from private label on the low end and independent operators on the high end has squeezed branded producers. Input costs are rising, but supermarkets are unwilling to pass along price increases. A disappointing report from Kroger (NYSE:KR) this week suggests pricing power will stay limited.
If General Mills disappoints on Tuesday, it’s not only GIS stock that will struggle. Other consumer packaged goods stocks like Kraft Heinz (NASDAQ:KHC) and Kellogg (NYSE:K) will feel the pressure as well. And that could kick off another round of selling — particularly with higher Treasury yields offsetting the appeal of the many dividend-paying stocks in the space.
3 Earnings Reports to Watch: Micron (MU)
Earnings Report Date: Thursday, September 20, after market close
Micron Technology (NASDAQ:MU) couldn’t ask for much better timing with its fiscal Q4 report on Thursday afternoon. MU stock touched a seven-month low this week, and even after a bounce Friday is down by more than one-third from late-May highs.
But little, if any, of the selling pressure comes from Micron’s own performance. The company has easily topped Street consensus in its last two quarters. Rather, concerns about a cyclical turn in NAND pricing and general weakness in the semiconductor space has sent MU reeling. Other chip and memory plays like Western Digital (NASDAQ:WDC), Seagate Technology (NASDAQ:STX) and even Intel (NASDAQ:INTC) have tumbled as well.
So a strong quarter from MU could arrest not only its slide, but those of peers. And from that standpoint, the reaction to Q4 earnings will be perhaps of more interest than the numbers themselves. If Micron again posts a solid quarter, and investors sell the news, it could be a sign that the sell-off in memory stocks isn’t ending any time soon. Some traction, however, might mean the market is ready to focus on near-term performance — and an amazing sub-4x P/E multiple — instead of panicking about lower pricing in 2019 and 2020.
All told, Micron earnings are going to be closely watched by not only its shareholders, but investors across the sector. That Q4 report could help end the pressure in the chip space — or portend another leg down.
As of this writing, Vince Martin has no positions in any securities mentioned.