10 Most Important Earnings Reports For This Upcoming Week

With earnings season beginning in earnest next week, we thought it would be helpful if we previewed the most important reports coming out and what investors may be looking at with each report. Among the many names reporting, the following 10 are judged to be the most important to focus on:

MONDAY:

Charles Schwab Corp. (SCHW): Not looking to play this report, we feel that it will be more important to see what Schwab says about the retail investor and the money-flows they are seeing from the “Mom and Pop investor.”

TUESDAY:

CSX Corp (CSX): With the railroads being known as a good early-cycle indicator, nascent economic recovery should be first detected in railroads such as CSX. Both sales and earnings are expected to each be down about 20% year over year.

Intel Corp. (INTC): Having pre-announced a strong Q3, investors should also expect a positive Q4 outlook by Intel Corp. Should INTC deliver, this report is certain to move the markets to the upside. Analysts are looking for a 5% sequential jump in Q4 revenues to $9.5 Billion.

WEDNESDAY:

Adtran Inc. (ADTN): Telecom equipment supplier Adtran was recently upgraded by Thomas Weisel and given a $32 price target. With its exposure to the fiber and Ethernet markets, Weisel feels that Adtran will benefit from a shift in telco capital spending towards wireless backhaul upgrades. Adtran’s report should be a good barometer for others in the group and it should also provide a glimpse into the timing of telco stimulus spend.

JP Morgan Chase & Co. (JPM): JP Morgan’s report should give us a feel for how the earnings season is shaping up for the big banks. In a report dated September 15th, Morgan Stanley reiterated a Strong Buy rating on JPM with a $58 price target. After recently testing its 50 Day Moving Average, JPM seems poised to break out to new 52 week highs on the heels of a strong report.

THURSDAY:

Goldman Sachs Group Inc. (GS): In the past 90 days, estimates for Goldman’s current quarter have risen by almost 50%, from $2.82 to the current $4.24 estimate. For GS, $200 seems inevitable. The only question is when.

Google Inc. (GOOG): Google has received three upgrades in the past few weeks on the heels of a pick-up in ad spending. Expect an upbeat report and outlook from them.

International Business Machines (IBM): IBM broke out on Friday to new highs after Barclays Capital raised its price target to $140. We are long IBM and expect to see its P/E multiple expand as investors begin to value the tech giant based on forward 2010/2011 estimates.

FRIDAY:

Bank of American Corp. (BAC): Watch for comments from BAC on credit card trends and credit losses. The shorts have backed off of the name somewhat in the past month, with short interest declining from 82 Million shares short to its most recent reading of 78 Million shares. Unlike JPM, BAC’s stock still sits well off its 52-week highs registered last fall.

Mattel Inc.(MAT): Toy-maker Mattel should provide a glimpse into consumer discretionary spending with its report on Friday. Last quarter the company beat estimates by $.06. Analysts are calling for $1.2 in earnings for 2009 and $1.46 for 2010.

Disclosure: Currently long IBM calls and stock and planning on putting on earnings trades via call options on ADTN, INTC, JPM just ahead of respective reports.

Comments

[MarvinMBA:]

The most interesting earnings are going to be Intel. Of course the future is technology and communications and Intel results will be the kick off to a new beginning for the USA. In fact Intel's success is vital to the progress and economic futre of the planet///believe it or not...buy some...MarvinMBA PS I own a few.

Oct 13 02:13 AM

[Joe Kunkle:]

Think ADTN going to get hit on earnings judging from recent put buying at the Oct 25 strike...

Oct 13 07:57 AM

[aaavoid:]

isnt C reporting on 15th oct?

Oct 13 12:02 PM

[The Inflect...:]

Nice catch on the Option activity in ADTN. I like the 3 year chart on ADTN and do not have much conviction on the name into numbers. Did just take a small probe on the $22.5 calls expiring this week. We will see. Best, John


On Oct 13 07:57 AM Joe Kunkle wrote:

> Think ADTN going to get hit on earnings judging from recent put buying
> at the Oct 25 strike...

Oct 13 12:55 PM

[The Inflect...:]

Thanks for the correction - sorry about that. C comes out on the 15th. Best, John


On Oct 13 12:02 PM aaavoid wrote:

> isnt C reporting on 15th oct?

Oct 13 02:28 PM

[ebworthen:]

Is anyone going to report bad news?

Honestly, the groupthink combined with the incentive to fudge numbers is so big, I don't trust most of the earnings reports.

Combine that with "less worse than expected" news that says "Down 22% from last year but stock is rallying!".

It's either a recovery, or the blowing of another bubble.

Oct 14 10:42 AM