Earnings season is slowly winding down, but there are still many key market-moving and sector-moving companies reporting this week, including Whole Foods (WFMI), Deere (DE), Genzyme (GENZ), Applied Materials (AMAT), Hewlett-Packard (HPQ), Las Vegas Sands (LVS), Wal-Mart (WMT), Dell (DELL) and First Solar (FSLR). Here’s a look at what to expect from each, including Thomson Reuters data.
DJIA component Kraft Foods (KFT) reported earnings this morning of $0.48 EPS versus $0.45 estimates. The problem was that revenue was deemed light, and the Cadbury growth addition will be recognized ahead in future quarters. Frankly, a 1.6% drop today may just be profit-taking after the stock held up. That merger was a very large distraction for the companies through the end of 2009 and into January.
Also reporting this morning was Merck & Co. (MRK). After announcing that it met its earnings estimates of $0.79, shares were up almost 3%. On the surface, the growth looked phenomenal, but these numbers include results from last year’s Scheing-Plough mega-merger.
Reporting after the close of trading on Tuesday will be Whole Foods (WFMI), with expectations of $0.26 EPS and $2.6 billion in revenues. Estimates for the coming quarter are $0.30 EPS on $1.98 billion in revenues. What will mark the difference in this call is that founding CEO John Mackey has ditched the role of Chairman of the Board. The other issue here is the valuation and the amount the stock has run with gains now being 200% since its 2009 lows.
On Wednesday morning Deere (DE) will report, and the numbers might not look so “dear” as the estimate is $0.19 EPS versus $0.48 a year ago. So tomorrow morning’s headlines are implied as reading “60% profit drops at Deere.” At $53.75, shares are barely 10% off of 52-week highs and still up more than 100% from the lows.
Genzyme (GENZ) is just about to lose whatever is left of its “value stock” status for trailing earnings. Estimates are $0.29 EPS, down from $1.04 a year ago. The belief is that the bar here has been set very low after manufacturing issues. With shares around $55.00, the 52-week trading range is $47.09 to $73.75. Carl Icahn has recently picked up his stake here, so the hope is that he will get some added influence in the company.
On Wednesday afternoon, two key technology companies report. Chip equipment maker Applied Materials (AMAT) is on deck alongside Hewlett-Packard (HPQ). The growth of Applied Materials may stand out with estimates of $0.13 EPS versus a break-even report a year ago. The problem is that a year ago was when semiconductor cap-ex was non-existent. Hewlett-Packard (HPQ) is also on deck, and those estimates are expected to be $1.06 EPS and $30 billion in revenues. H-P’s Mark Hurd does frequently give long-term guidance, and fiscal Oct-2010 estimates are $4.36 EPS and $120 billion in revenues.
Also reporting on Wednesday is Las Vegas Sands (LVS). Here investors should be looking for potential trading reactions in Wynn Resorts (WYNN) and Melco Crown PBL (MPEL). The big issue here will be whether or not the company is able to maintain the momentum it saw with its last earnings around strong bookings. Estimates are $0.03 EPS on $1.23 billion in revenues. As much as the company has recovered off lows, about ten-fold, LVS most likely cannot get away with anything overly cautious. Las Vegas Sands was up almost 5% last week.
The Big Kahuna of retail reports on Thursday morning. Wal-Mart (WMT) is expected to post $1.12 EPS versus $1.03 a year ago. Revenues are expected to be $114.5 billion, roughly 5% growth from a year ago. The report will be interesting considering that Wal-Mart is supposed to be the winner of the recession. The stock flirted with $55 per share throughout January and February, and it has to get back above that mark for the investment community to think it is not still the same dead money stock of the last decade.
Thursday afternoon comes “that other PC company” in the form of Dell (DELL) earnings. Estimates here are $0.27 EPS and $13.85 billion in revenues. This will mark the Jan-2010 fiscal year end. Dell has not been consistent on how much guidance it offers, but next quarter estimates are also $0.27 EPS and $13.54 billion in revenue. With shares at $14.05, its 52-week range is $7.84 to $17.26.
First Solar (FSLR) also reports on Thursday after the market close. This will mark the first real quarter behind the new CEO, and it will be the first quarter with a clearer picture of what 2010 holds in store for solar stocks. First Solar’s report will spill over into most of the other solar stocks as well. Estimates are $1.50 EPS on $579.72 million in revenues, which would be down from $1.61 for the same period a year ago. Estimates for the quarter ahead are $1.65 EPS on $555.93 million in revenues. A 5% gain on Tuesday may have investors off guard, but even at $120, the stock’s 52-week range is $100.90 to $207.51. So far, we have seen a somewhat “tolerant sentiment” on solar stock earnings.
Next week will be followed by many earnings reports from more retailers that include Jan-2010 fiscal year-end results.
