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Summary

  • Investors will get the latest trends in drug store sales, apparel, agriculture and food production this week.
  • Notably earnings from Walgreen, Nike and General Mills could stir things up a bit.
  • Please consider the risks when investing in shares over earnings; only hold a position if you are a long-term investor.

Traders will keep their eyes on corporate America again this week with a few big names across a wide range of industries set to report their earnings.

Strong results, notably from FedEx (NYSE:FDX), Kroger (NYSE:KR) and the likes of Adobe Systems (NASDAQ:ADBE) propelled equity markets higher last week, of course aided by comments from the Fed's Janet Yellen as well.

This week a few large U.S. names are expected to open their books as well. Among the largest are Walgreen (NYSE:WAG), Nike (NYSE:NKE), Monsanto (NYSE:MON) and General Mills (NYSE:GIS).

The following is a quick overview of the expectations from each of those earnings.

Walgreen

The operator of drug stores is scheduled to release its earnings on Tuesday the 24th of June before the market open.

Expectations for the quarter have been on the increase, as shares have risen 15% over the past three months alone. Consensus estimates for the quarter stand at earnings of $0.94 per share, nine cents higher than last year. A beat is probably required to keep investors happy, given the strong momentum this year, as shares have already risen 30% so far in 2014.

Revenues are anticipated to increase by 6.4% to $19.48 billion. Last week, competitor Rite Aid (NYSE:RAD) reported some disappointing earnings after a warning about gross margin compression. Any signs for similar moves will be closely watched when Walgreen releases its earnings.

Another key point would be a potential ¨inversion¨ move which the market starts to anticipate. Following the complete acquisition of Boots in Europe, the company could make a move, as I recently contemplated, in order to cut its tax bill significantly.

Nike

Nike is scheduled to release its earnings on Thursday, the 26th of June, after the market close. Of course, all eyes are on the World Cup, which is a key selling season for Nike and its major German competitor, Adidas.

Analysts are looking for earnings of $0.75 per share, which implies that earnings are down a penny compared to last year. Shares have consolidated this year, and are actually down by about 5% following very decent momentum in 2013.

Sales are anticipated to increase by 9.7% to $7.34 billion. Of course all eyes will be on the outlook and comments regarding demand related to the World Cup.

Monsanto

The often controversial seeds & genomics as well as agricultural productivity supplier is expected to release its earnings on Wednesday the 25th of June, before the market opens.

Investors have good hopes for the quarter, with shares trading up 8% over the past three months alone. This is as analysts are looking for earnings of $1.56 per share, which is down ten cents compared to the year before. Note that Monsanto's earnings tend to be volatile given the reliance on weather and key commodity prices for its end-user clients. Sales are seen up by 3.7% to $4.41 billion.

Of course, any comments about the anticipated performance for the rest of the year will be key. Comments about the very interesting acquisition of The Climate Corporation will be watched as well. With this deal and other initiatives, Monsanto aims to blend technology, farming, seeds and applications all together, boosting farmers' productivity by another big step.

General Mills

Consumer goods processor General Mills will report its results on Wednesday the 25th of June, before the market open.

Analysts are looking for healthy profits, with earnings per share seen at $0.72 versus just $0.53 per share reported last year. Revenues are anticipated to rise by merely 0.3% to $4.42 billion. Again all eyes are on the outlook, with investors and analysts keeping a close eye on signs of food cost inflation. After shares have risen by 7% in merely three months, investors are most likely looking for a healthy set of numbers.

Last week competitor ConAgra Foods (NYSE:CAG) pre-warned about the market in what was essentially a big profit warning. ConAgra saw weakness in private brands as well as its consumer brands business.

Takeaway For Investors

Earnings reports, notably from economy bellwethers like FedEx which reported last week, do have the potential to move markets. This week, investors will focus on signs of food inflation, the impact from the Affordable Care Act and general signs of economic growth.

While things are looking good for corporate America, the lack of revenue growth is a major concern for many, as share repurchases and margin expansion have fueled operating margins to date. To sustain earnings growth, revenues will have to increase going forward.

Please consider the risks when investing in companies when holding your positions over their earnings release, unless you are a truly long-term investor with a long time horizon. Good luck!

Source: 4 Large U.S. Corporations Set To Publish Earnings The Week Of The 23th Of June