Earnings Season Kicks Off Today

 |  Includes: AA, ALUM, JPM, MAR, SHAW, WFC, YUM
by: David Sims

The 2nd Quarter of 2012 has ended and earnings season will begin with Alcoa releasing earnings news this afternoon. Almost two hundred companies will report this week and investors will be watching in anticipation. A big surprise can move sectors higher or lower, depending on the result.

Key Earnings Releases

  • Alcoa Inc (AA) - July 9th
  • Yum! Brands Inc (YUM) - July 9th
  • Shaw Group Inc (SHAW) - July 10th
  • Marriott International Inc (MAR) - July 11th
  • JPMorgan Chase & Co (JPM) - July 12th
  • Wells Fargo & Co (WFC) - July 12th

Alcoa is expected to earn 6 cents per share on $5.8 billion in revenue for the 2nd Quarter. The last earnings release beat analyst expectations by 14 cents. Given the fall in aluminum prices over the past quarter, it should be interesting to see how Alcoa's results fare. The Global X Aluminum ETF (ALUM) has fallen from $10.40 at the beginning of April to $8.77 at the end of the June.

Yum! Brands should earn 70 cents on $3.1 billion in revenue, according to analysts. The owner of the KFC, Taco Bell, and Pizza Hut brands has been expanding in China. The company also released a new higher quality Cantina Bell menu at Taco Bell and in 2011, they shed unpopular brands like Long John Silver and A&W.

Analysts expect Shaw to earn 58 cents per share on $1.5 billion in revenue. Last quarter, the company hit earnings targets right on the nose. The company recently announced the sale of its Energy and Chemicals business for $300 million to Technip.

YTD Percentage Price Change (SHAW, AA, YUM)

SHAW ChartClick to enlarge

SHAW data by YCharts

Marriott International is expected to earn 42 cents per share on revenue of $2.8 billion. Last quarter, the company beat expectations by one penny. Weakness in Europe may have an impact on this quarter's results. The company has hundreds of properties in Europe and according to the last 10Q filing, the company records about ten percent of revenue from international properties.

Earnings per share for JP Morgan is forecast to be 79 cents on revenue of $21.9 billion. JP Morgan was recently hit with negative news surrounding a rogue trader in London that made massive bets, losing possibly $9 billion. Additionally, increased repurchase claims may lead to bigger mortgage losses. Offsetting the repurchase claims could be good news from the housing market, in terms of home prices, which may show loss reversals for mortgages.

Wells Fargo is expected to earn 81 cents per share on $21.3 billion in revenue. Like JP Morgan, they may be affected by increased repurchase claims and improving home prices. Last quarter, Wells Fargo beat analyst expectations by 2 cents.

YTD Percentage Price Change (MAR, JPM, WFC)

MAR ChartClick to enlarge

MAR data by YCharts

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.