Q2
Earnings – Week 4
By the end of the last week 314 out of
S&P 500 companies reported what gives us a pretty decent overview of how
the companies and economy is doing. The overall expectations declined as more
companies from real economy and consumer staples reported. A sort of mirror
view of the US economy in the form of Q2 GDP miss just underscored the real
situation on Friday. Actually, the worse Advance Q2 GDP figure was a bit of
surprise as the US data of late would point to +2.6% growth while the actual number was +1.2% only. At the same time the final Q1 was
revised down to +0.8% from +1.1%. In other words the US GDP rose less than 2%
over the past three quarters. The revenue of US companies is slightly higher,
EPS stay negative while their EU peers reported even gloomier picture with both
revenue and EPS declines.
Last
Week
Caterpillar
Inc – its results pointed to lower global demand
for its products, thus indicating that world economy has still some bumps ahead.
As mentioned last week, consumer names
face some headwinds and despite the better headline figures from McDonald’s, the closer look revealed
some issues.
Ford
Motor Co – as the market was checking on North
American sales that were strong in Q1 and good results from Europe, we learnt
from the CEO that the US market is still under pressure and company may have
difficulties to keep up with its plans and forward guidance.
The tech giants Alphabet Inc, Amazon.com Inc
and Facebook Inc briefed the
market on their business model Brexit resistance, cloud business and web
services. All of them beat the market expectations on internet services.
Apple
Inc – the lower iPhone sales translated to lower
revenue already 2nd consecutive quarter but apparently, the company
is gaining optimism on new smartphone cycle. Here, we should stay very cautious
as Samsung and especially Chinese manufactures can offer the same if not better
devices at much lower price.
Chevron
Corp & Exxon
Mobil Corp – the market was not expecting any deviation from industry trend
on weaker commodity prices and both companies experienced the 20% decline in
revenue, while Exxon also suffered the 60% fall in profits on y/y basis.
Enbridge (pipelines) and Imperial Oil
(integrated refiner and oil producer) were hurt by wildfires what was seen in
the earnings reports as well.
This
Week
Well, after last week’s avalanche of
earnings reports from big names we keep going with smaller companies despite
more summer kind of mood everywhere.
The biotech
or health care names will be watched
from their valuation and regulatory perspective, especially in US in the light
of upcoming US presidential elections (Obamacare).
EU
banks – not only Italian banks but the whole
Eurozone banking system that is still under stress will catch some attention of
market even after Friday’s stress results. There are also signs of some issues
with USD funding of EU banking system appearing.
One would think that ECB is helping
banks by providing them liquidity and buying bonds but on the other hand all
the liquidity provisions are being sterilized via other channels and keeping
the interest rates extremely low is not helping the banks at all as it bites
into their profitability.
Let’s see how it goes….check the below:
Monday
Heineken
Holding NV (NL) – estimated EPS 3.34, +15.0% Y/Y;
Revenue 21 225 mln
Loews
Corp – estimated EPS 0.57, +26.9% Y/Y; Revenue …
mln
Veolia
Environment SA (F) – estimated EPS 0.51, +9.9% Y/Y;
Revenue 11 952 mln
Tuesday
BMW
AG (DE) – estimated EPS 2.67, +0.6% Y/Y; Revenue 24
552 mln
In case of BMW the German precision and
technology combined with Italian kind of emotions is still perfectly working.
But really is? The emerging markets (especially China) are still strong as
Daimler-Chrysler showed.
Ferrari
NV (IT) – estimated EPS 0.44, …% Y/Y; Revenue 773
mln
Tuesday
CVS
Health Corp – estimated EPS 1.30, +6.8% Y/Y;
Revenue 44 281 mln
METRO AG (DE) – estimated EPS 0.19, +272.0% Y/Y; Revenue 13 816 mln
Procter
& Gamble Co – estimated EPS 0.75, -25.5% Y/Y;
Revenue 15 832 mln
The market will be interested in seeing
how the company copes with its product portfolio vs cost cutting.
Saputo Inc (CA) – estimated EPS 0.40, +18.5% Y/Y; Revenue 2
662 mln
American
International Group Inc – estimated EPS 0.92,
-33.7% Y/Y; Revenue 13 217 mln
The recent market volatility and lower
investments in hedge funds will definitely leave a print on earnings.
Intesa
Sanpaolo SpA (IT) – estimated EPS 0.04, -39.0% Y/Y;
Revenue 4 034 mln
The results may brief us on the
situation in Italian banking sector coping with excessive amount of troubled
loans. For those looking at having an exposure to European banks that are
trading at lowest levels in more than two decades, of course after considering
all the risks even after stress test results, the better option in Italy may be
Unicredit.
Pfizer
Inc – estimated EPS 0.62, +11.1% Y/Y; Revenue 13
005 mln
The investors will check the comments on
unfinished merger with Allergan Inc and the cash flow from off patent drugs.
Deutsche Lufthansa AG (DE) – estimated EPS 0.69, -42.2% Y/Y; Revenue 8
167 mln
Mitsubishi
Corp (JP) – estimated EPS 40.46, -12.6% Y/Y;
Revenue 1 734 520 mln
Wednesday
Continental AG (DE) – estimated EPS 4.10, -2.7% Y/Y; Revenue 10
534 mln
Tesla
Motors Inc – estimated EPS -0.56, -16.7% Y/Y;
Revenue 1 647 mln
Twenty-First
Century Fox Inc – estimated EPS 0.37, -5.4% Y/Y;
Revenue 6 683 mln
Tesoro Corp – estimated EPS 1.76, -61.8% Y/Y; Revenue 6 146
mln
AXA SA (FR) – estimated EPS 1.08, -10.4% Y/Y; Revenue … mln
HSBC Holdings PLC (GB) – estimated EPS 0.13, -45.7% Y/Y; Revenue 13
602 mln
ING Groep NV (NL) – estimated EPS 0.28, -10.8% Y/Y; Revenue 4
214 mln
Komercni Banka a.s. (CZ) – estimated EPS 14.16, -15.5% Y/Y; Revenue 8
076 mln
May be a nice exposure to CEE region via
bank name. Komerni Banka is a traditional retail bank from Czech Republic
offering complete services to retail or corporate clients.
MetLife
Inc – estimated EPS 1.35, -13.3% Y/Y; Revenue 17
266 mln
Societe
Generale SA (FR) – estimated EPS 1.18, -27.9% Y/Y;
Revenue 6 777 mln
Standard
Chartered PLC (GB) – estimated EPS 0.29, -41.0%
Y/Y; Revenue 6 697 mln
Unicredit
SpA (IT) – estimated EPS 0.13, +9.6% Y/Y; Revenue 5
714 mln
Check the comment at Intesa Sanpaolo SpA
above (Tuesday).
Humana Inc – estimated EPS 2.22, +33.2% Y/Y; Revenue 13 594
mln
First
Solar Inc – estimated EPS 0.54, +5.1% Y/Y; Revenue 869
mln
Check the comment for more at Tesla
above (Wednesday)
Rio Tinto PLC (GB) – estimated EPS 0.80, -49.6% Y/Y; Revenue 16
520 mln
Thursday
Toyota
Motor Corp (JP) – estimated EPS 145.46, -29.2% Y/Y;
Revenue 6 583 510 mln
Kraft
Heinz Co – estimated EPS 0.72, +17.3% Y/Y; Revenue 6
802 mln
Manulife
Financial Corp (CA) – estimated EPS 0.46, +4.5%
Y/Y; Revenue 12 158 mln
Merck
KGaA (DE) – estimated EPS 1.52, +17.2% Y/Y; Revenue
3 817 mln
LinkedIn
Corp – estimated EPS 0.78, +41.82% Y/Y; Revenue 898
mln
The acquisition from Microsoft and
especially rising demand for hiring services will be of interest.
Nokia
OYJ (FI) – estimated EPS 0.04, -64.3% Y/Y; Revenue 5
872 mln
The company once the leader of the
segment now benefits from extensive portfolio of patents that brings a steady
cash flow and its corporate business.
BCE Inc (CA) – estimated EPS 0.91, +4.7% Y/Y; Revenue 5 383 mln
Bell Canada is the largest telecommunication
company in Canada that will provide us with an insight on how this sector
performs in maple leaf country.
Duke
Energy Corp – estimated EPS 1.01, +6.2% Y/Y;
Revenue 5 682 mln
Friday
Magna International Inc (CA) – estimated EPS 1.34, +4.1% Y/Y; Revenue 9
217 mln
Allianz SE (DE) – estimated EPS 3.60, -20.8% Y/Y; Revenue 28
218 mln
Power
Corp of Canada (CA) – estimated EPS 0.74, -19.2%
Y/Y; Revenue … mln
For those who search for a Berkshire
Hathaway kind of diversified across many sectors company focussing on finding
the value deals, this Canadian peer to Warren Buffet’s imperium may be a good
choice.
Royal
Bank of Scotland Group PLC (GB) – estimated EPS
0.05, -62.2% Y/Y; Revenue 3 055 mln
Novo Nordisk A/S (DK) – estimated EPS 3.88, +20.0% Y/Y; Revenue 28
360 mln
Bombardier Inc (CA) – estimated EPS -0.03, -153.3% Y/Y; Revenue 4
183 mln
A short of cash company that had troubles
to finalize their CSeries jets will be under the scrutiny of the market
especially, after receiving a hand from Province of Quebec. The green light for
CS 300 jets was awarded, so let’s see how they can fly…
LafargeHolcim
Ltd (CH) – estimated EPS 0.82, -46.2% Y/Y; Revenue 7
622 mln
The results of the merger company having
a significant market share in producing construction materials can give us some
hints on how the construction business in Europe looks like.
Good luck Champs!
Mr Hawk
DISCLAIMER: This material was created
for informational purposes only and represents the Land of Trading team’s view
of the past and current economic and capital market environment. It is not an
investment advice and should not be viewed that way at all, and the creators of
this material cannot be held liable for any potential losses resulting from
trading, where despite this disclaimer someone would consider this material as
an investment advice. All rights reserved ©2016. Contact: landoftradingATgmail.com
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