Last week, Goldman Sachs Group Inc. (NYSE: GS) and JPMorgan Chase & Co. (NYSE: JPM) reported stellar quarterly results. Lots more third quarter reports from the big banks are due this week.
However, analysts surveyed by Thomson Reuters anticipate year-over-year earnings declines from Bank of New York Mellon (NYSE: BK), BB&T Corp. (NYSE: BBT), M&T Bank Corp. (NYSE: MTB), Northern Trust Corp. (NASDAQ: NTRS), PNC Financial Services Group Inc. (NYSE: PNC), State Street Corp. (NYSE: STT), US Bancorp (NYSE: USB), and Wells Fargo & Co. (NYSE: WFC).
The bright spot in the financial sector this week will be insurance, in particular, The Travelers Companies Inc. (NYSE: TRV). In its third quarter, Travelers appointed a new chief marketing officer and declared a quarterly dividend. Analysts surveyed by Thomson Reuters expect this St. Paul, Minn.-based business insurer to report a third-quarter profit of $1.32 per share, which is 58.3% higher than in the same period of last year. But revenue for the period that ended in September is expected to total $5.9 billion, 3.0% lower than a year ago. So far, the full-year forecast is for $5.28 per share, about the same as last year, on $23.5 billion (-4.0%). Travelers' earnings have been better than expected in two of the past three quarters, but missed by two cents per share in the second quarter. The long-term EPS growth forecast is 7.5% and the earnings multiple is 8.9x. The First Call consensus recommendation has been to buy TRV for more than 90 days, and the mean price target is $56.00. One analyst, however, just downgraded Travelers and others due to the financial outlook for property and casualty insurers. At $48.67, Travelers shares are 20.4% higher than three months ago.
Fellow insurer Chubb Corp. (NYSE: CB) is also expected to post double-digit earnings growth. But earnings declines are expected from American Express Co. (NYSE: AXP) and Capital One Financial Corp. (NYSE: COF), while Comerica Inc. (NYSE: CMA), Fifth Third Bancorp (NASDAQ: FITB), Huntington Bancshares Inc. (NASDAQ: HBAN), Marshall & Ilsley Corp. (NYSE: MI), Regions Financial Corp. (NYSE: RF), SunTrust Banks Inc. (NYSE: STI), and Zions Bancorp. (NASDAQ: ZION) are expected to post losses.
On the heels of strong results from International Business Machines Corp. (NYSE: IBM), Intel Corp. (NASDAQ: INTC), and Google Inc. (NASDAQ: GOOG) last week, this week's earnings winner in the tech sector appears to be Apple Inc. (NASDAQ: AAPL). During the fiscal fourth quarter in which its App Store reached two billion downloads and CEO Steve Jobs recovered from a liver transplant, analysts are looking the Cupertino, Calif.-based Mac and iPhone maker to report earnings of $1.42 per share, up 11.3% from the same period a year ago. Sales for the period that ended in September are expected to be 16.6% higher to $9.2 billion. For the fiscal year, the forecast is for $5.88 per share (+8.8%) on $35.9 billion (+10.4%). Apple's earnings have beat the Street view in the past five quarters, by as much as 39 cents per share. The long-term EPS growth forecast is 18.0%, which is better than that of Microsoft Corp. (NASDAQ: MSFT), and its earnings multiple is 15x. The consensus recommendation remains to buy AAPL, with a mean price target is $205.37. Apple shares have risen 23.9% in the past three months and reached a 52-week high of $192.32 last week.
Microsoft Corp. (NASDAQ: MSFT), on the other hand, is expected to report a year-over-year decline in its fiscal first-quarter earnings. And analysts are looking for lower EPS from AT&T Inc. (NYSE: T), Broadcom Corp. (NASDAQ: BRCM), Juniper Networks Inc. (NASDAQ: JNPR), Texas Instruments Inc. (NYSE: TXN), and Yahoo! Inc. (NASDAQ: YHOO) as well.
Analysts also have high expectations this week for consumer favorites Amazon.com Inc. (NASDAQ: AMZN), Hasbro Inc. (NYSE: HAS), Hershey Co. (NYSE: HSY), McDonald's Corp. (NYSE: MCD), and Netflix Inc. (NASDAQ: NFLX).
But Chipotle Mexican Grill Inc. (NYSE: CMG) could be one of this week's earnings winners in this category. Analysts expect this Denver-based restaurant chain to report a profit of $0.87 per share for the third quarter during which it became possible to order its offerings via iPhone. That profit would be 32.2% higher than last year. Revenue for the period that ended in September is expected to be 14.2% higher to $388.8 million. So far, the full-year forecast is for $3.46 per share (+31.8%) on $1.5 billion (+14.4%). Chipotle earnings have been better than expected in the past three quarters, beating estimates by as much as 22 cents per share. The long-term EPS growth forecast is 21.3%, which is higher than that of Yum! Brands Inc. (NYSE: YUM), one of the world's largest fast-food operators. Chipotle has hade more cash on hand than long-term debt in recent quarters, as well as rising net cash flow from operations. Investopedia recently said it expects another earnings beat from Chipotle. At $90.53, shares are 6.4% higher than three months ago, and 46.1% higher than a year ago.
Not quite so fortunate, Coca-Cola Co. (NYSE: KO), eBay Inc. (NASDAQ: EBAY), Philip Morris International Inc. (NYSE: PM), and United Parcel Service (NYSE: UPS) are expected to post lower earnings, while New York Times Co. (NYSE: NYT) is expected to report a narrow loss.
Gilead Sciences Inc. (NASDAQ: GILD) saw changes in management and to its board in the third quarter, and analysts are looking for the drug maker to report earnings of $0.67 per share, up from $0.59 per share in the same period a year ago. Sales for the three months that ended in September are expected to be 27.9% higher to $1.8 billion. And analysts foresee sequential growth in both EPS and revenue in the fourth quarter. Gilead Sciences has met or beat the Street view in the past four quarters. The long-term EPS growth forecast is 15.9%, which is better than rivals Bristol Myers Squibb Co. (NYSE: BMY) and GlaxoSmithKline (NYSE: GSK), and the earnings multiple is 16x. Net cash flow from operations has been growing in recent quarters. Analyst, on average, recommend buying GILD, with a mean price target is $55.63. Shares are 3.5% lower than three months ago to $46.17. They have met resistance from the 200-day moving average in that region since early August.
This week's other anticipated earnings gainers include Amgen Inc. (NASDAQ: AMGN), Bristol Myers Squibb Co. (NYSE: BMY), Kimberly Clark Corp. (NYSE: KMB), Merck & Co. (NYSE: MRK), Raytheon Co. (NYSE: RTN), and Quest Diagnostics Inc. (NYSE: DGX).
Analysts are looking for lower year-over-year earnings from Caterpillar Inc. (NYSE: CAT), Dow Chemical Co. (NYSE: DOW), DuPont (NYSE: DD), Eli Lilly & Co. (NYSE: LLY), Gannett Inc. (NYSE: GCI), Pfizer Inc. (NYSE: PFE), Potash Corp. (NYSE: POT), Schlumberger Ltd. (NYSE: SLB), Starwood Hotels and Resorts Worldwide Inc. (NYSE: HOT), 3M Co. (NYSE: MMM), United Technologies Corp. (NYSE: UTX), and Xerox Corp. (NYSE: XRX).
And Boeing Co. (NYSE: BA) and Nucor Corp. (NYSE: NUE) are expected to have swung to losses in the third quarter.











Reader Comments (Page 1 of 1)
10-19-2009 @ 6:47AM
Beltway Greg said...
$1.62
9 Million IPhones.
Highlights for Jon Stewart.
10-19-2009 @ 9:15AM
jolietjeff said...
Hedge Funds should be ILLEGAL!! They have almost no rules and really are Billionaire insider trading clubs!! They meet with other funds and invest in the same Futures markets literally fixing the market with their hundreds of Billions of Dollars! Yes they are the ones putting GOLD over $1000, a metal with little real value and that has hundreds of billions of lbs out there!! Yes they are the ones making OIL go up again even when supplies are overflowing and more hybrids are on the road!! I like that AOL puts the OIL story on Wall street 24/7 that you cannot comment on so they can PUSH their AGENDA and that of their Hedge fund buddies!! OIL is not in short supply, the demand is down with hybrids and soon electric cars out, so it this the hedge fund controlled FUTURES markets that are pushing it up and it will crash just like last time when they pull their money out!! Make HEDGE FUNDS and ENERGY FUTURES ILLEGAL mr OBAMA and stop trying to push us into your government run health care scam!! Do something to really stablize the economy instead of creating new taxes on my insurance plan and staying in wars costing billions. Want a war put troops on the Mexican border to stop the job banditos from coming across the border and stealing our jobs and money!!
10-19-2009 @ 9:14AM
Beltway Greg said...
And even if Apple fails to impress and we take a short term hit do you really believe that Apple will never pass $200/share again? Don't do anything stupid, but don't spend the day fretting.