Earnings Preview: 5 Companies That Could Surprise

It is going to be a very busy week. Earnings season continues, the economic calendar is pretty packed, the Fed will hold its April meeting and automotive makers face deadlines.

Nearly 800 companies will release profit reports, 154 of which are in the S&P 500. Dow components include Chevron Corporation (CVX), Exxon Mobil Corporation (XOM), Pfizer (PFE) and Procter & Gamble (PG).

We will get our first look at first-quarter GDP. The consensus estimate is calling for a contraction of 4.9%, from 6.3% in the fourth-quarter.

• Tuesday: April Conference Board consumer confidence, February S&P/Case Shiller housing price index
• Wednesday: Advance first-quarter GDP, weekly crude inventories
• Thursday: April Chicago PMI, March personal income and spending, weekly initial jobless claims
• Friday: April ISM manufacturing index, April revised University of Michigan consumer confidence, March factory orders, April auto sales

The Fed will hold a 2-day meeting starting on Tuesday. The statement will be released on Wednesday at about 2:15 ET. No change in interest rates will be announced.

The statement will be analyzed for any suggestions that the rate of economic contraction has slowed (which it has). Bond traders will also look for an update to the Fed's strategy of expanding its balance sheet.

The Federal Reserve web site is not listing any upcoming speeches.

It will be interesting to see if the automotive sector has any impact on trader sentiment. Chrysler could file for bankruptcy ahead of its Apr 30 deadline to form an alliance with Fiat. Events could unfold over this weekend and/or Fiat could wait for Chrysler to enter bankruptcy before forming the alliance.

General Motors (GM) is working on an offer for its unsecured debt. Bloomberg News is quoting unidentified sources that a proposal could be given by as soon as Monday.

As I said before, this is going to be a busy week. At the same time, the charts are not providing clear signals - especially with volume trending below average. We're just going to have to wait for the week to unfold and see what the reaction is.

Companies That Could Issue Positive Earnings Surprises

Brokerage analysts have recently become more optimistic about Ameristar Casinos (ASCA). During the past 30 days, analysts have raised both their first-quarter and full-year profit forecasts.

For the first quarter, 2 analysts changed their projections. The revisions pushed the consensus earnings estimate one-cent higher to 33 cents per share. The most accurate estimate is even more bullish at 35 cents per share. ASCA has topped expectations twice during the past four quarters, though its second-quarter results were disappointing. Ameristar Casinos is scheduled to report on Wednesday, Apr 29, before the start of trading.

Corning Inc. (GLW) told shareholders last month that it was "experiencing increasing glass orders". As a result, the company anticipated that first-quarter glass volume would be down just slightly, if not flat. (The company had previously warned that volume would be 20-25% lower.)

About a third of the covering analysts adjusted their first-quarter profit projections in response. These changes pushed the consensus earnings estimate 2 cents higher to 6 cents per share. The most accurate estimate is more bullish at 7 cents per share. GLW did miss estimates last quarter, so this call does carry some risk. Corning is scheduled to report on Monday, Apr 27, before the start of trading.

After being slashed in February, first-quarter earnings estimates for Commscope Inc. (CTV) have started to rebound. During the past 30 days, 3 of the 12 covering brokerage analysts have raised their forecasts. The positive revisions pushed the consensus earnings estimates 1-cent higher to 10 cents per share and resulted in a most accurate estimate of 11 cents per share. This communication networking company has a long history of topping expectations. CommScope is scheduled to report on Tuesday, Apr 28, after the close of trading.

Two brokerage analysts recently raised their first-quarter profit projections on Monolithic Power Systems (MPWR). The changes resulted in a most accurate estimate of -2 cents per share. However, the consensus earnings estimate is basically unchanged at a per share loss of 5 cents per share as a total of 9 analysts cover the stock. Nonetheless, the positive revisions follow a trend of higher earnings estimates that is also occurring with many other semiconductor companies. MPWR has topped expectations during 3 out of the last 4 quarters. Monolithic Power Systems is scheduled to report on Tuesday, Apr 28, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Textron (TXT) warned a few weeks ago that most of its "commercial markets continue to soften". The company also said that it continues to reduce production at Cessna. Though guidance was not provided, one-third of the 10 covering analysts cut their first-quarter earnings estimates. As a result, the consensus earnings estimate fell to 6 cents per share, a 2-cent reduction. The most accurate estimate is far more bearish and calls for a loss of 12 cents per share. TXT has missed for 2 consecutive quarters.

-- Charles Rotblut