First-quarter earnings season gets well underway next week with results due from major players in the banking sector. A plethora of earnings reports are also due from heavyweights in the technology sphere, including International Business Machines Corp. (IBM), Microsoft Corp. (MSFT) and Intel Corp. (INTC). Meanwhile, investors will be looking for signs of recovery in the hard-hit housing sector next week when a gamut of housing data is released.
Quarterly Earnings Due From Goldman Sachs, Morgan Stanley
First-quarter results are due from banking giants Citigroup Inc. (C) and Bank of America (BAC) as well as the nation's largest investment banks--Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS).
Banks are benefiting from a rebound in business borrowing and investor-trading activity. However, their first-quarter revenue is expected to remain flat from a year earlier because loan books grew more slowly than in previous quarters and interest rates remain low, offsetting improved revenue from securities trading.
Meanwhile, a revival in bond trading will likely boost first-quarter earnings for Goldman Sachs and Morgan Stanley, but results should still fall short of tough comparisons to the year-earlier period. The period was very much a mixed bag for the pair as equities-trading volumes remained weak and investment-banking activity has been skittish, particularly on the mergers-and-acquisitions front.
Breadth Of Tech Companies To Report 1Q Results
A trio of big software names -- IBM, Microsoft and VMware Inc. (VMW) will release their results next week. Investors will likely focus on IBM's software-and-services business, which has buoyed Big Blue's recent results, as well as sales of Microsoft's flagship Windows operating system, which has suffered lately from declining personal-computer sales. VMware has already stated its first-quarter results would "broadly meet or slightly exceed" its original guidance.
Intel will be the first major semiconductor to report its quarterly earnings when it releases results on Tuesday. Analysts expect Intel, considered a bellwether for the broader industry because its chips run more than 80% of the world's PCs, to post weaker profits and revenue. The company faces soft PC sales in mature markets like the U.S., and hard-disk drive shortages hurt manufacturers' ability to build computers. Fellow chipmakers Qualcomm Inc. (QCOM) and Advanced Micro Devices Inc. (AMD) report on Wednesday and Thursday, respectively.
Internet giants Yahoo Inc. (YHOO) and eBay Inc. (EBAY) are set to release their latest results Tuesday and Wednesday, respectively. Investors await details about Yahoo's Chief Executive Scott Thompson's turnaround strategy as Yahoo struggles to revive its declining ad business, the cornerstone of its operations. Meanwhile, recent monthly sales data suggest eBay's core marketplace segment is on track to deliver stronger revenue, building on gains seen over the past year after the online retailer revamped the business with fee changes and other tweaks.
Other companies reporting next week include wireless carrier Verizon Communications Inc. (VZ), beverage giant Coca-Cola Co. (KO), pharmaceutical and health-care products company Johnson & Johnson (JNJ), railroads CSX Corp. (CSX) and Union Pacific Corp. (UNP) and newspaper publishers Gannett Co. (GCI) and New York Times Co. (NYT).
Housing Data On Tap For Next Week
Markets will examine a gamut of housing data next week, as investors look for signs of improvement in the depressed housing sector.
The National Association of Home Builder's housing index will be released Monday. U.S. home builders' confidence in the housing market held steady in March after five consecutive monthly gains, keeping sentiment at the highest level in nearly five years as the industry slowly regains its footing after a devastating bust.
March housing starts data will be released Tuesday. U.S. home building fell in February, but permits for new construction reached their highest levels since 2008.
Existing-home-sales data for March is due Thursday. Existing-home sales fell slightly in February after January's uptick.
Carlyle Group To Begin IPO Road Show
A road show will start as early as next week for the initial public offering of Carlyle Group that will value the private-equity firm at between $7.5 billion and $8 billion, The Wall Street Journal reported Wednesday, citing a person familiar with the matter.
Carlyle filed documents to the Securities and Exchange Commission earlier this month to sell a 10% stake. It is likely to generate as much as $800 million in proceeds, according to the person. The company's performance fee-generating funds climbed about 9% in the first quarter, with energy funds leading with a 14% rally, according to a securities filing on Tuesday.
US Officials To Review Cheniere Natural-Gas Export Plan
Federal-energy officials have decided to review a closely watched plan to export U.S. natural gas when they gather for a monthly meeting next week, paving the way for what could be the first set of federal permits for a string of proposals to ship the fuel overseas.
The Federal Energy Regulatory Commission said Thursday it plans to take up an application from Cheniere Energy Inc. (LNG)--which is seeking to export up to 2.2 billion cubic feet of natural gas per day--when members meet April 19 in Washington.
Cheniere is proposing to build an export facility in Louisiana, where it currently operates a facility to import natural gas.
If FERC approves the project, Cheniere will become the first company in years to get approval to export liquefied natural gas from the U.S., though it might not be the last. More than a half dozen companies are seeking permission from the federal government to ship the fuel abroad.
Kodak To Ask Bankruptcy Judge To Launch Process To Sell Times Square Billboard Lease
Eastman Kodak Co. (EKDKQ) on Monday will ask a bankruptcy judge to let it launch a competitive-bidding process to sell the lease to its giant billboard in Manhattan's Times Square.
Kodak, which is phasing out its digital-camera business, said it no longer needs to advertise those products on a 40-foot video screen that millions of people view each year.
The company has a leading bid of $3.7 million lined up for the lease from Orange Barrel Media, an advertising firm that already has two LED billboards in Times Square. Under Kodak's proposal, Orange Barrel would receive a $200,000 breakup fee if its bid loses.
Also on Monday, the judge will consider approving a committee to represent the interests of Kodak's retirees as the company gears up to slash a heavy load of debts related to retiree health and pension benefits.
World Bank Expected To Name Kim President
The World Bank board is expected to name its new president on Monday.
While global public-health expert Jim Yong Kim remains on track to win the World Bank presidency within days, he is the first U.S. nominee to face competition for the job.
His chief rival, Ngozi Okonjo-Iweala, the Nigerian finance minister and former senior World Bank official, is shaking up the process. This year's race is the first time any countries have nominated a challenger to the U.S. pick.
Kim, Dartmouth College President and an American physician who was born in South Korea and raised in Iowa, built his career working on public-health threats such as HIV/AIDS and tuberculosis in developing countries. He would become the first nonwhite president of the World Bank if he is approved by the bank's board.
Among the significant conferences next week are the Deutsche Bank Bridging the Gap Conference Monday through Wednesday in Washington, D.C.; IPAA's Oil & Gas Investment Symposia Monday through Wednesday in New York and the BioCentury and Thomson Reuters Future Leaders in the Biotech Industry Conference on Friday in New York.
-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; [email protected]
--Gregory Zuckerman, Alison Tudor, Tennille Tracy, Jacqueline Palank, Drew Hinshaw, Sudeep Reddy and Dow Jones Newswires staff contributed to this report.