12 Key Earnings Announcements To Look Out For This Week
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Earnings season starts to wind down this week, but there are still some interesting companies reporting. I think by now most investors will have formulated their view on the general trend of earnings and the economy. This week is probably about confirming- already drawn- conclusions.
For the record, I think it has been a bit of a watershed earnings season. I’ve been a bit negative on emerging markets (EM) this year and this was the quarter when a lot of companies started reporting lower growth expectations for EM. Interestingly most companies seem to have reported that conditions in Europe are weak but stable. Investors should appreciate that companies will start to anniversary weak comparisons in Europe in the future, so look out for some possible upside surprises.
In contrast, it’s been a mixed bag with the US. Things are improving on the whole, but there is a bifurcation with the mass market consumer and overall spending. There is a difference between the two and understanding the nuances of it is key to navigating your way to finding the right companies.
The three companies I want to highlight on Monday are Lowe’s Companies (NYSE: LOW), Agilent Technologies (NYSE: A) and Brocade. Investors in Lowe’s must surely be optimistic after Home Depot reported good results recently and with other companies confirming that the US housing market is in recovery mode it should surely find it easier to execute better.
I find Agilent to be a fascinating barometer of results and analyzing them is a good way to get a read on so many other industries. I have covered the stock in an article linked here. I’m particularly interested in what it might say about telecommunications revenues because Cisco reported late in the season and implied that there were signs of an improvement in telco spending in the US. Agilent’s most cyclical division is the chemical analysis group so look out for any commentary there.
This is the most eventful day of the week with a mix of defensives and cyclical stocks reporting. Eaton Vance is going to provide updates on industrial conditions with particular relevance to China. Meanwhile Hewlett-Packard (NYSE: HPQ) investors will be bracing themselves for the next update on its ongoing struggle to restructure and deal with its debt problem. The stock is cheap on some metrics, but sales are falling in some of its core markets and Windows 8 prospects have been downplayed by most companies with an interest. Salesforce.com has a rich rating and has to keep performing in order to justify said rating when it gives earnings.
As for the defensives H. J. Heinz (NYSE: HNZ), Patterson Companies (dental health care) and Campbell Soup Company (NYSE: CPB) will all give results. I confess I’m not the biggest fan of Campbell but it has done well this year. It is the classic example of a stock that offers a decent stable yield but its growth is far from stellar. I have featured the stock in an article linked here. Underlying growth is weak and it will have to demonstrate a bit more than acquisition led growth for me to be interested.
As for Heinz, it is reliant on its core brands to drive growth in emerging markets. So far it is doing fine, but the tricky part is that it doesn’t break out its infant nutrition revenues. My guess is that it was responsible for a large part of the growth, but with Mead Johnson and others talking about an increase in promotions and completion in China –and the US for that matter- it is hard to predict what Heinz will say about emerging market growth
Rest of the Week
The rest of the week is relatively quiet but Donaldson’s results will be closely watched after it lowered guidance in October. Similarly Deere update on conditions in agriculture and construction with-no doubt- a lot of color on the Far East.
SaintGermain has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend H.J. Heinz Company and Lowe's Companies. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.