I think it's fair to say that there's much trepidation about the earnings season that picks up steam this week. And for better or worse, numbers from the big financials have begun to roll in. Last week we saw profit sink for JPMorgan Chase (NYSE: JPM) and significant losses from Bank of American Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and Deutsche Bank (NYSE: DB).
Analysts surveyed by Thomson Reuters expect Bank of New York Mellon Corp. (NYSE: BK) to be among those financials reporting fourth-quarter earnings growth this week. They anticipate that Bank of New York will post a profit of $0.70 per share, compared to $0.67 per share a year ago and $0.72 in the previous quarter. Revenue is expected come to $3.8 billion, about the same as it was a year ago. Bank of New York has fallen short of earnings estimates in two of the past five quarters, by as much as 11.1%. For the full year, analysts are looking for $2.78 per share (+5.8%) on $14.8 billion (+4.2%). The consensus recommendation of analysts is to buy BK, and the long-term EPS growth rate forecast is 10.7%. Shares are 48.7% lower than a year ago. Other financials expected to report quarterly earnings growth this week include SunTrust Banks Inc. (NYSE: STI) and M&T Bank Corp. (NYSE: MTB).
Plenty of financials reporting this week are expected to post lower earnings, including US Bancorp (NYSE: USB), which acquired banks via the FDIC during the fourth quarter. Analysts anticipate that US Bancorp's profit will have fallen 58.5% in the past year to $0.22 per share, while revenues will have grown 7.5% to $3.8 billion. US Bancorp's profit has fallen short of estimates in three of the past four quarters -- by 31.2% in the third quarter. For the full year, the company's profit is expected to be $1.72 per share (-29.2%) on revenue of $14,9 billion (+7.3%). US Bancorp's long-range EPS growth forecast of 7.6% is better than Bank of America's, but still less than the S&P 500. Shares of US Bancorp are trading around the multiyear low of $20.22 from last November, and are down 39.4% from a year ago. Other expected quarterly earnings decliners include Capital One Financial Corp. (NYSE: COF), State Street Corp. (NYSE: STT), TD Ameritrade Holding Corp. (NASDAQ: AMTD), BB&T Corp. (NYSE: BBT), Blackrock Inc. (NYSE: BLK), and Northern Trust Corp. (NYSE: NTRS).
Meanwhile, Huntington Bancshares Inc. (NASDAQ: HBAN) is expected to swing to a profit of $0.20 per share from a year-ago loss of $0.65 per share. The Ohio-based lender is expected to post fourth-quarter revenue 13.5% higher to $628.2 million. Huntington's results have beat estimates in the past three quarters, and shares are down 40.5% just since the beginning of the year. CIT Group Inc. (NYSE: CIT), Fulton Financial Corp. (NASDAQ: FULT), Regions Financial Corp. (NYSE: RF), and KeyCorp (NYSE: KEY) are expected to have swung to losses in their fourth quarters.
But more than just financial companies are reporting this week. Google Inc.'s (NASDAQ: GOOG) fourth-quarter profit is expected to be 11.9% higher than a year ago, to $4.96 per share, on revenue of $4.1 billion (21.7%). And IBM (NYSE: IBM) is expected to post per-share earnings of $3.03 (+7.6%) on sales of $28.2 billion (-2.5%). Full-year results for both companies are also expected to be higher than a year ago. Their earnings have been close to estimates in recent quarters, and analysts on average recommending buying both stocks. Google's long-range EPS growth forecast of is 19.5% and its shares are 50.5% lower than a year ago. IBM's EPS growth forecast is 11.2%, less than the S&P 500, but its share price is down only 17.9%.
Microsoft Corp. (NASDAQ: MSFT), on the other hand, is expected to post fiscal second-quarter earnings that are the same as last year, with sales up slightly. And analysts are looking for Apple Inc. (NASDAQ: AAPL) to post a fiscal first-quarter profit that's 21.6% lower than a year ago, or $1.38 per share, on sales of $9.8 billion (+1.6%). The iPhone maker has topped estimates in recent quarters, by as much as 17.9%. The consensus recommendation remains to buy AAPL, and analysts forecast long-term EPS growth of 18.9%, though that may not have factored in news of CEO Steve Job's leave of absence for health reasons. Shares have fallen 49.3% in the past year. Other expected significant earnings decliners include eBay Inc. (NASDAQ: EBAY), cell phone giant Nokia Corp. (NYSE: NOK), and computer peripherals maker Logitech International (NASDAQ: LOGI).
Things look worse for Advanced Micro Devices Inc. (NYSE: AMD), which has already warned of lower revenues. The chip and processor maker is expected to post a deeper fourth-quarter loss of $0.54 per share, compared to the loss of $0.17 per share a year ago. Sales are expected to be down 30.6% to $1.2 billion. AMD did report a surprise profit in the third quarter, though. For the full year, analysts are looking for a per-share loss $1.54 on revenue of $5.8 billion. And in the long term they forecast EPS growth of 11.7%, less than that of rival Intel Corp. (NASDAQ: INTC) (which reported fourth-quarter results last week). AMD's share price is 65.8% lower than it was a year ago.
Analysts expect rail companies Union Pacific Corp. (NYSE: UNP), Burlington Northern Santa Fe Corp. (NYSE: BNI), and CSX Corp. (NYSE: CSX) to report earnings growth in their fourth quarters. Southwest Airlines Co. (NYSE: LUV) is expected report a lower fourth-quarter profit, while UAL Corp. (NASDAQ: UAUA), parent of United Airlines, is expected to have greatly widened its loss in the fourth quarter. And Harley-Davidson Inc.'s (NYSE: HOG) fourth-quarter earnings are also expected to be lower.
But that's still not all (yes, the earnings crunch has begun). Potash Corp. Inc. (NYSE: POT) is expected to be among the big earnings gainers this week, with fourth-quarter earnings forecast to more than double to $2.27 per share on revenue of $1.9 billion (+30.3%). Potash has beaten earnings expectations in recent quarters, by 36 cents per share in the third quarter. For the full year, the world's largest producer of potash is expected to report $10.70 per share earnings (+68.6%) and sales of $9.3 billion (+76.9%), which is in line with previous guidance. The share price is 2.8% lower than three months ago and down 40.0% from a year ago. More modest earnings gains are expected from the fourth quarters of defense plays United Technologies Corp. (NYSE: UTX) and Johnson & Johnson (NYSE: JNJ).
General Electric Co. (NYSE: GE), ostensibly another defensive play, is expected report that its fourth-quarter profit fell 45.6% to $0.37 per share. Revenue is expected to come to $48.9 billion, up only slightly for a year ago. For the full year, analysts anticipate $1.81 per share (-17.7%) on $187.4 billion (+8.5%). Earnings fell within about a penny of estimates in most of the recent quarters, but these EPS estimates are a little higher than GE's December forecast. The long-range EPS growth forecast is 9.5%. Shares are up marginally from the multiyear low of $12.58, and have fallen 13.8% just since the beginning of the year. More modest expected earnings decliners reporting this week include Xerox Corp. (NYSE: XRX) and Schlumberger Ltd. (NYSE: SLB).
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