By Wallace Witkowski, MarketWatch
Exxon Mobil, Disney, Merck report this week
SAN FRANCISCO (MarketWatch)--Investors will get a better idea of
how much consumers used their so-called gasoline "tax cut" to fuel
discretionary purchases this week as energy and consumer-oriented
earnings figure heavily in this week's results.
As oil prices have dropped dramatically since July, the
prevailing wisdom is that lower gasoline prices translate into more
money for the consumer to spend, and that should provide a boost to
consumer-oriented companies. That effect remains to be seen, as the
drag from energy appears to be exerting more force than a boost
from consumer spending.
This past week, consumer-tech giant Apple Inc. (AAPL) reported
record earnings driven by iPhone sales, while Chevron Corp. (CVX)
reported a 29% decline in fourth-quarter earnings and suspended its
share buybacks. As a whole, stocks finished lower as several
earnings reports disappointed and GDP figures came in lower than
expected.
Further mixing signals, consumer confidence rose to highs not
seen since 2007, but consumer spending in December is expected to
decline 0.3% in data to be released Monday.
This week, nearly 100 companies in the S&P 500 index will
report quarterly results with three of those Dow
components.(MRK)
On the energy side, fourth-quarter earnings for the sector are
expected to decline about 23%, according to John Butters, senior
earnings analyst at FactSet. That's slightly worse than the 17%
decline estimated at the end of the year. On Monday, Exxon Mobil
Corp. (XOM)reports earnings.
Over the past month as energy sector projections have dropped,
earnings growth estimates for the consumer discretionary sector
have grown slightly to 4.9% from 4.4%. This week sees Walt Disney
Co. (DIS), Chipotle Mexican Grill Inc. (CMG), and General Motors
Co. (GM.XX)
Health-care companies will also have a big say in earnings, with
reports from Merck & Co. (MRK), Gilead Sciences Inc. (GILD),
and McKesson Corp. (MCK)
Earnings growth for the energy sector is expected to decline
about 54% in the first quarter, threatening to pull the S&P 500
into its first year-over-year quarterly earnings decline in eight
quarters, according to FactSet's Butters.
Notable earnings reports this week
Report date Company/Ticker (FactSet EPS / revenue estimates)
Mon., Feb. 2 Exxon Mobil ($1.34 / $87.43 billion)Anadarko Petroleum Corp. (86 cents / $3.81 billion)Sysco Corp. (41 cents / $11.93 billion)
Tues., Feb. 3 Walt Disney ($1.07 / $12.87 billion)Chipotle ($3.79 / $1.07 billion)Gilead Sciences ($2.23 / $6.72 billion)
Weds., Feb. 4 Merck (86 cents / $10.48 billion)General Motors (83 cents / $38.88 billion)Keurig Green Mountain Inc. (89 cents / $1.49 billion)Yum Brands Inc. (66 cents / $3.93 billion)21st Century Fox Inc. (41 cents / $7.32 billion)Wynn Resorts Ltd. ($1.41 / $1.19 billion)
Thurs., Feb. 5 News Corp (24 cents / $2.25 billion)Expedia Inc. ($1.01 / $1.37 billion)GoPro Inc. (70 cents / $580.3 million)LinkedIn Corp. (53 cents / $617.5 million)McKesson ($2.61 / $44.81 billion)Philip Morris International Inc. ($1.06 / $7.1 billion)Twitter Inc. (6 cents / $454 million)
Fri., Feb. 6 CBOE Holdings Inc. (66 cents / $166.8 million)Moody's Corp. (95 cents / $851.3 million)
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