The US third quarter earnings season picks up this week with more than 80 S&P 500 companies (11 of the 30 Dow stocks as well) down to report, including some of the giants of banking and technology, airlines, toys, manufacturing and energy services.
In fact by the end of this week, around a fifth of the S&P 500 will have reported (34 have already lodged reports), and outside of retailing, automotive and aerospace, investors should have a very good idea of how the quarter is shaping up, and a clue or two about the overall health of demand and the wider economy.
In fact we could find out that the expected slide in revenues and profits for the past year might be over. That will depend heavily on the performance of energy companies which have seen the biggest falls in both measures.
That’s why the quarterly results from Schlumberger and Halliburton, the top two oil and gas service companies respectively, will give investors a good idea about the health of the sector, and if these giants see revenue and earnings gains (and an end to the big job and cost cuts) in coming quarters.
Pipeline giant, Kinder Morgan, which abandoned a major merger in the quarter, is another due to report from the energy sector.
Bank of America, Goldman Sachs and Morgan Stanley round off results of major US banks, along with a host of smaller firms such as eTrade, Charles Schwab and a host of small and medium banks.
But tech giants like IBM, Netflix, Yahoo, Intel and Microsoft are also on the roster of reporting companies, along with Citrix, eBay, PayPal, Netsuite, Seagate, Verizon (the giant Telco). The struggling Yahoo is also down to report, and possibly reveal a cut in the sale price of its internet business to Verizon.
Netflix is tipped to report a relatively weak set of figures tomorrow night.
Alaska Airlines and American Airlines will report and should follow rival Delta which last week revealed weaker revenues, reasonable earnings, an end to the boost from falling fuel prices and plans to cut capacity on some international routes to improve profit margins. Manufacturing will be a major area of reporting companies – from the biggest, General Electric, to rivals Danaher, Dana Corp, Honeywell, Illinois Toolworks, Whirlpool and Johnson & Johnson (the first of the big pharma manufacturers and marketers to report). Nucor, American’s biggest steel company is also due to report its latest figures.
Mattel and Hasbro report and the two toy giants will give the market a good idea about the Thanksgiving-Christmas selling season. And retail facing groups, Walgreens and SuperValue are also due to report.
The reports on Friday from the three major banks – JP Morgan, Citi and Well Fargo were on the whole positive (they saw Goldman Sachs share rise nearly 2% on Friday night ahead of the release of earnings tomorrow night, our time.
The better-than-expected quarterly results from J.P. Morgan Chase and Citi, with solid improvements in their key trading groups built around foreign exchange, fixed interest and commodities (all of which were volatile in the third quarter) hints at improvements for Goldman Sachs, Morgan Stanley and Bank of America this week.
Wells Fargo has a reasonable quarter with a noticeable fall in new accounts in the wake of the 2 million face account scandal that saw the chairman and CEO, John Stumpf, depart last week.
Offshore results are expected from Korea Zinc, Daimler, Kia Motors, Keppel Singapore, Hyundai Motor Co, Hyundai Engineering, Samsung Engineering, Philipps Lighting and Hyundai Steel.
In Australia a trio of reporters are expected to release half year or quarter figyues on Thursday, API and Ten network (half year) and CIMIC (quarterly).
