MARKET SNAPSHOT: Disney, Coca-Cola Headline Consumer-heavy Earnings Week
February 07 2016 - 8:36AM
Dow Jones News
By Wallace Witkowski, MarketWatch
Projected S&P 500 earnings improve, but still facing
decline
Media and consumer-staples companies face a big week of earnings
reports, after an improvement in projected earnings for the S&P
500 Index did little to stop a selloff in stocks.
Stocks took a dive last week, with tech stocks taking the
biggest hit,
(http://www.marketwatch.com/story/wall-street-gets-the-jitters-ahead-of-key-jobs-data-2016-02-05)
as the Dow Jones Industrial Average declined 1.6%, the S&P 500
Index fell 3.1%, and the Nasdaq Composite Index dropped 5.4%.
Of the more than 60 S&P 500 companies reporting this week,
three are Dow components: Coca-Cola Co.(KO) and Walt Disney
Co.(DIS) on Tuesday, and Cisco Systems Inc.(CSCO) on Wednesday.
In addition to Disney, it's a big week for media companies with
reports from 21st Century Fox Inc.(FOX) , (FOX), Time Warner
Inc.(TWX), CBS Corp. (CBSA) and Viacom Inc.(VIA) (VIA)
Other notable consumer-reliant earnings this week include
PepsiCo.(PEP), CVS Health Corp.(CVS) and Reynolds American
Inc.(RAI), with notable reports from Tesla Motors Inc
(http://www.marketwatch.com/story/tesla-earnings-model-3-spending-model-x-sales-in-focus-2016-02-05).(TSLA)
and Twitter Inc.(TWTR).
Expect earnings to remain weaker than those of the year-ago
period as not much is expected to change this week, said Paul
Nolte, portfolio manager at Kingsview Asset Management. Besides,
given that record corporate stock buybacks have been propping up
earnings-per-share, Nolte is more concerned with growth in revenue,
or the noted lack of it.
While unemployment fell below 5% and wages rose sharply
(http://www.marketwatch.com/story/us-jobs-growth-slows-to-151000-as-jobless-rate-hits-eight-year-low-2016-02-05)in
Friday's jobs report, that could pose further problems to future
earnings reports, Nolte said. If corporate revenues remain flat as
they have been for the past few years, those higher wages will just
be a further headwind on earnings that are becoming immune to the
benefit of billions of dollars of share buybacks
(http://www.marketwatch.com/story/share-buyback-machine-remains-in-overdrive-and-experts-warn-it-will-end-badly-2016-02-04),
he said.
"If wages are increasing, that will work to erode corporate
margins and EPS," Nolte said.
Over the past week, projected earnings for the S&P 500
improved while projected revenue saw little improvement.
For the December-ending quarter, the S&P 500 is on track for
an earnings decline of 3.8%, an improvement from last week's
projected decline of 5.8%, but revenue is on track for a 3.4%
decline, compared with last week projected decline of 3.5%,
according to John Butters, senior earnings analyst at FactSet.
Notable earnings reports this week
Report date Company/ticker (FactSet EPS / revenue estimate)
Mon., Feb. 8 21st Century Fox (44 cents / $7.53 billion) Hasbro Inc. US:HAS ($1.30 / $1.37 billion) Cognizant Technology Solutions Co. US:CTSH (78 cents / $3.24 billion)
Tues., Feb. 9 Disney ($1.45 / $14.79 billion) Coca-Cola (37 cents / $9.9 billion) CVS ($1.53 / $41.13 billion) Viacom ($1.18 / $3.26 billion)
Weds., Feb. 10 Cisco Systems (54 cents / $11.77 billion) Time Warner ($1 / $7.54 billion) Tesla Motors (16 cents / $1.85 billion) Twitter (12 cents / $710 million) Whole Foods Market Inc. US:WFM (40 cents / $4.81 billion) Expedia Inc. US:EXPE ($1.01 / $1.71 billion) Prudential Financial Inc. US:PRU ($2.30 / $11.53 billion)
Thurs., Feb. 11 PepsiCo ($1.06 / $18.59 billion) Reynolds American (50 cents / $3.05 billion) CBS (92 cents / $3.81 billion) Molson Coors Brewing Co. US:TAP (52 cents / $845.5 million) Activision Blizzard Inc. US:ATVI (86 cents / $2.2 billion) TripAdvisor Inc. US:TRIP (33 cents / $298.3 million) American International Group Inc. US:AIG (per-share loss of 91 cents / $13.58 billion)
Fri., Feb. 12 Interpublic Group of Cos. US:IPG (62 cents / $2.19 billion)
(END) Dow Jones Newswires
February 07, 2016 08:21 ET (13:21 GMT)
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