By Nathalie Tadena
A handful of big-name companies, including retailer behemoth
Wal-Mart Stores Inc. (WMT) and network-equipment giant Cisco
Systems Inc. (CSCO), are due to report their latest quarterly
results next week.
Next week is also a busy one for initial public offerings, with
textbook-rental platform Chegg Inc. and lodging company Extended
Stay America Inc. among those scheduled to begin trading. On the
economic data front, investors will be on the watch for reports on
the Treasury budget and data on import and export prices.
Wal-Mart, Cisco Projected to Record Top-, Bottom-Line Growth
Wal-Mart, the world's largest retailer, and Cisco, the world's
largest supplier of Internet routers and switches, are set to
release earnings next week. Analysts polled by Thomson Reuters
expect both companies to notch single-digit top- and bottom-line
growth.
Wal-Mart has previously warned it expects its low-income
customer base to remain cautious about spending and the company
will bring back its layaway program for the holidays. Wal-Mart has
missed Wall Street estimates in recent quarters as its core
customers contend with high gasoline prices and persistently high
unemployment levels. This year's comparable-store sales have also
been pressured by a delay in income-tax-refund checks, severe
weather conditions and a higher payroll tax. Wal-Mart will report
on Thursday.
Silicon Valley giant Cisco has also been hurt by a slow economic
recovery. When the company last reported earnings in August, it
also unveiled plans to cut 5% of its workforce, blaming the
decision largely on the sluggish recovery. Cisco, the biggest maker
of networking equipment, often sees business trends sooner than
other companies. Consequently, its results and comments about
business conditions are often seen as a harbinger of things to come
for other hardware and software companies. Cisco will report its
results for the fiscal first quarter Wednesday.
Other notable companies reporting results next week include
dairy giant Dean Foods Co. (DF), satellite-TV operator Dish Network
Corp. (DISH) and media conglomerate Viacom Inc. (VIAB, VIA).
Extended Stay America, Chegg, Houghton Mifflin to Debut
Following Twitter Inc.'s (TWTR) highly anticipated debut, next
week's initial public offering calendar remains busy, including
launches from textbook-rental hub Chegg, lodging company Extended
Stay and publisher Houghton Mifflin Harcourt Co.
Chegg, which purchases textbooks and rents them to students for
an academic term at a substantial discount from the list price of
the book, expects to raise about $173 million in its debut.
According to a filing with the Securities and Exchange Commission,
Chegg expects the 15 million shares being offered to price between
$9.50 and $11.50 a share.
Also slated next week is the debut from Extended Stay, which is
expected to raise about $593 million in its offering. The
once-troubled lodging company expects the offering of about 28.3
million shares to price between $18 and $21 each.
Both Chegg and Extended Stay are expected to begin trading on
the New York Stock Exchange on Wednesday, according to IPO
Boutique. Chegg will trade under the symbol CHGG and Extended Stay
will trade under the symbol STAY.
Houghton Mifflin, which publishes educational and consumer
books, plans to raise about $274 million in its offering. The
company said the offering of 18.3 million shares is expected to
price between $14 and $16 a piece. Houghton Mifflin's shares are
scheduled to begin trading on the Nasdaq on Nov. 14 under the
symbol HMHC.
Bankruptcy Court to Look at Plan to Pay Orchard Supply Creditors
On Wednesday, the U.S. Bankruptcy Court in Wilmington, Del.,
will take its first look at a plan to pay Orchard Supply Hardware
Corp.'s creditors following its sale to Lowe's Cos. (LOW).
Orchard, which operates home and garden retail stores in
California and Oregon, in August won bankruptcy-court approval to
sell itself to Lowe's for $205 million. Lowe's is continuing to
operate the stores it acquired under the Orchard name.
Orchard will use the sale proceeds and other cash to pay off its
creditors, including the lenders that provided the company with a
$176.3 million bankruptcy loan.
The bankruptcy court isn't considering the plan itself at this
time, just the disclosure statement. If the court approves the
document, Orchard's creditors will be able to start voting on the
plan.
Treasury Budget, Import and Export Price Data on Tap
In a light week for economic reports, the Treasury Department
will release its monthly statement of receipts and outlays on
Wednesday. The U.S. Treasury Department has recently said it will
pause efforts to scale back government borrowing, in a shift the
department said reflects uncertainty over economic implications
from the partial government shutdown and debt-ceiling impasse.
On Friday, the Labor Department will release data on import and
export price indexes. Weak economies in much of the world have held
down prices for goods and services, helping to keep inflation at
historically low levels in the U.S.
Markets Open on Veterans Day
Federal and state offices will be closed Monday in observance of
Veterans day, but stock markets will remain open.
Jacqueline Palank contributed to this article.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
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