14 MIN. DE LECTURA
(The Day Ahead is an email and PDF publication that includes the day's major stories and events, analyses and other features. To receive The Day Ahead, Eikon users can register at . Thomson One users can register at RT/DAY/US. All times in ET/GMT) Apple Inc is expected to report one of its strongest quarters ever, helped by strong unit sales of its larger-screen iPhone 6 and 6 Plus. The new iPhones are helping Apple chip away at Samsung Electronics' dominant position in its home turf of South Korea, according to a monthly report released by Hong Kong-based market research company Counterpoint. November was the first full month that the iPhones were sold in the country. Some analysts have speculated that Apple, which gets more than half its revenue from outside the United States, will feel the weight of a surging dollar on its results.
Wall Street expects Pfizer Inc, the largest U.S. drugmaker by sales, to report higher fourth-quarter results, helped by sales of new cancer treatments and growing sales of mainstay brands such as Lyrica for pain and its Prevnar vaccine against pneumococcal infections. Investors will look for clues about whether Pfizer is still interested in a mega-merger to help bolster future earnings, following its failed efforts last year to buy British drugmaker AstraZeneca and move its tax base to Britain.
The Federal Open Market Committee begins a two-day meeting on interest-rate policy. Separately, the Federal Reserve Bank of Richmond issues manufacturing and services indices for January (1000/1500), while the Federal Reserve Bank of Dallas releases the service sector outlook survey for January. (1030/1530)
Consumer goods giant Procter & Gamble, which said in August last year it would sell half its brands in the next two years and cut jobs to revive sales growth and save costs, reports earnings before the market opens. The company has since sold brands including Duracell and has undertaken several management reshuffles. Investors will look for more details on how it plans to fix its ailing beauty business, which brands the company plans to sell next and where it will look to cut costs, as well as comments on impact of a stronger dollar, which hurt quarterly sales at rival Kimberly-Clark.
AT&T Inc, the No. 2 U.S carrier, will report fourth-quarter earnings following a flurry of promotional activity in the holiday season that analysts expect to have squeezed margins and pressured subscriber churn and addition of new postpaid users. Investors will look for details on 2015 guidance and AT&T's investments in the AWS-3 spectrum auction as the telecom price war mounts and the company readies to close its deal to buy DirectTV later this year.
Amgen Inc is expected to post a higher fourth-quarter profit and provide its first forecast for 2015. Investors will look for news on the ongoing restructuring at the world's largest biotechnology company and any new insight into the potential impact of the approval of the first U.S. biosimilar of the company's drug Neupogen, as well as how foreign exchange rates will influence 2015 earnings.
Bristol-Myers Squibb Co is expected to report lower fourth-quarter sales and earnings, amid falling sales of its treatments for HIV and the loss of diabetes drugs that it sold off earlier in the year to AstraZeneca Plc. Investors will focus on how the company's promising array of immuno-oncology drugs are faring in clinical trials, and how well Opdivo is doing after being approved in Japan and the United States to treat melanoma.
The Commerce Department's durable goods orders report is expected to show orders rose 0.5 percent in December after falling 0.9 percent in November. Core capital goods orders are expected to have risen 0.5 percent last month after declining 0.5 percent in November (0830/1330). Commerce Department data is expected to show new home sales increased in December to 450,000 units from 438,000 units in November (1000/1500). The Conference Board is expected to report that its consumer confidence index rose to 95 in January from 92.6 in December (1000/1500). Separately, Standard & Poor's releases its S&P Case/Shiller Home Price Index for November. (0900/1400)
Diversified manufacturer 3M Co's fourth-quarter revenue is expected to rise by about 3 percent. Investors will be looking at the extent of the fallout from the strong dollar, given that 3M gets more than 60 percent of its sales from outside the United States.
Chemical company DuPont is expected to report a higher fourth-quarter profit on expectations that it benefited from a rise in operating margins in most of its businesses. The focus this quarter will be on the company's response to activist investor Nelson Peltz's call to break up the conglomerate. Peltz, who nominated himself and three other members from his Trian Fund to DuPont's board earlier this month, has been stepping up pressure on the company to break up. DuPont has insisted that it is more beneficial to keep all its businesses together, but with a proxy fight for the board underway, the company could look to strike a compromise. DuPont has already announced plans to spin off its performance chemicals business and it expects to record a related $315 million charge this quarter. Investors will look for details on the spin-off and subsequent listing.
Yahoo Inc CEO Marissa Mayer is set to outline the company's plans for the 15 percent stake in Chinese ecommerce giant Alibaba, when it reports fourth-quarter results after markets close. Investors are pressuring Yahoo to sell the stake, worth nearly $37 billion, in a tax-efficient manner and return the money to shareholders. But Yahoo, which is struggling to turn around its core business, may want to use some of the proceeds for acquisitions. Yahoo's plans for the stake could set the stage for a confrontation with shareholders and put Mayer's future at risk.
Caterpillar Inc is expected to report fourth-quarter earnings before markets open. Analysts will be watching to see whether strength in the company's construction business in the United States offsets a slump in earth-moving equipment in the mining industry. A big question for Caterpillar's business moving forward is what impact the drop in oil prices will have on its business supplying equipment to the oil and gas industry. The market expects earnings per share of $1.59 for the quarter.
Specialty glass maker Corning Inc is expected to post fourth-quarter revenue marginally above expectations, according to Thomson Reuters StarMine, due to increased demand for its Gorilla Glass. The company expected core sales in its specialty materials business to fall in the quarter as there were no major mobile launches. Analysts will look for a forecast for its cover glass business. UBS analyst Amitabh Passi sees an incremental upside if the company undertakes strategic alternatives such as the divestment/consolidation of Dow Corning.
Lockheed Martin Corp, the Pentagon's No. 1 supplier, is expected to report higher fourth-quarter profit and revenue despite pressure on U.S. defense spending, as sales to commercial customers in United States as well as international governments picked up. Lockheed gets 17 percent of its revenue from international markets and 1 percent from U.S. commercial customers.
Canadian National Railway reports fourth-quarter results after markets close. The Canadian company may be asked about the impact of lower oil prices on its crude-by-rail business, and about how its operations are running after last year's serious congestion problems. CN is expected to report a rise in earnings, to 97 Canadian cents a share from 76 Canadian cents, and revenue of C$3.12 billion, up from C$2.75 billion a year earlier, according to Thomson Reuters I/B/E/S.
American Airlines Group Inc reports fourth-quarter results. While analysts were mildly disappointed with the company's lower-than-expected guidance for unit revenue in the fourth quarter, they expect bullish guidance for 2015, thanks to the plummeting price of oil. The largest U.S. airline by passenger traffic has participated in the full price drop because it does not hedge its fuel consumption.
Hard-disk drive maker Western Digital Corp is expected to report second-quarter profit and revenue above analysts' estimates, according to Thomson Reuters StarMine, benefiting from businesses upgrading computers and higher demand for storage used in servers and data centers. An improving PC market is also expected to help the company. Investors will look out for updates on the company's full-year forecast.
Video game publisher Electronic Arts Inc is expected to a third-quarter report profit above estimates, according to Thomson Reuters StarMine, as it focuses more on its big selling titles such as "FIFA". The company might see revenue fall after the smash success of "Battlefield 4" a year earlier. The videogame developer has been making a push to a "freemium" model, where games are free to download and revenue is generated through in-game purchases. Analysts believe the company's mobile growth may soon outpace the already rapidly growing mobile market.
Virtualization software maker VMware Inc is likely to report a fourth-quarter profit above estimates, according to Thomson Reuters StarMine. The company is expected to benefit from new license sales and contract renewals. Activist-investor Elliot Management, which has been pushing parent EMC Corp to spin off VMware since October, reached a standstill agreement with EMC this month, easing pressure on the company until September. Investors will look for commentary from VMware on the spin-off prospects and growth outlook.
Freeport-McMoRan Inc, the world's biggest listed copper producer, is expected to report lower fourth-quarter earnings on the back of weaker metal and oil prices and volumes. Freeport, whose debt has ballooned to $19 billion in the wake of several oil acquisitions, is likely to announce capital spending cuts as it deals with a funding shortfall of up to $5 billion this year due to weak cash flow. Analysts expect the Arizona-based miner to cut dividends and announce a slowdown in the development of its deepwater Gulf of Mexico oil assets. It could also delay completing the expansion of its Cerro Verde copper mine in Peru. Asset sales and joint venture agreements may also be on the cards. The market will want an update on Freeport's negotiations with the Indonesian government on its contract in that country.
New York-based Coach Inc reports second-quarter results before the bell. The company, known for its poppy handbags, has struggled to keep up with its affordable luxury competitors, particularly Kate Spade & Co and Michael Kors Holdings Ltd. The accessories retailer said this month it would buy privately held women's luxury shoe company Stuart Weitzman Holdings LLC for about $574 million, in an attempt to better compete with its fast-growing rivals. Printer maker Lexmark International Inc is expected to report a fourth-quarter profit slightly below estimates, according to Thomson Reuters Starmine. Analysts expect currency pressure to have affected operating profit by about 20-25 percent and believe the company has cut costs to compensate. Analysts also expect lower revenue from the hardware and supplies segment for 2015. Nucor Corp's fourth-quarter results are expected to be hurt by the rising tide of steel imports thanks to the strong U.S. dollar, falling domestic steel prices, and ongoing complications at an iron facility in Louisiana. Analysts expect earnings per share of 55 cents for the quarter. AK Steel Holding Corp also reports fourth-quarter results, with analysts watching for insight on steel prices and demand moving forward. The market expects AK Steel to report quarterly earnings per share of 7 cents.
Network gear maker Juniper Networks Inc is expected to post fourth-quarter revenue marginally above expectations, driven by a rise in Web 2.0 customers and cable offerings. However, analysts expect to see weakness in routing, switching and security in the quarter and the first half of 2015, due to lower spending by U.S service providers.
Coal miner Peabody Energy Corp is expected to report a bigger fourth-quarter loss, hurt by tepid demand in an oversupplied U.S. coal market. Coal producers are struggling with weak met coal demand and a U.S. rail jam that has impeded efforts to ride on a recovery in thermal coal demand. Investors will look for comments on the company's cost-cutting efforts as they expect Peabody to benefit from falling oil prices and a weaker Australian dollar. The company gets about 40 percent of its revenue from Australia. Investors will also look for more information on Peabody Energy and Glencore's joint venture at two neighboring mines in Australia's Hunter Valley in November.
Canadian business-software maker Open Text Corp is expected to post a higher second-quarter profit, driven by demand for its cloud service business. A strong average selling price is also expected to help the company, which bought data analytics provider Actuate in January. Investors will look for comments on how the Actuate acquisition will help the company.
Semiconductor maker Applied Micro Circuits Co will likely include an update on its progress selling new low-power server chips when it reports third-quarter results after markets close. The company is one of a handful to use technology adapted from smartphones to challenge Intel's dominance of the data center.
Mexico releases economic activity data which will reveal how growth fared in November (0900/1400). Trade balance data will show how factory exports behaved in December, after posting their biggest decline in nearly two years the prior month (0900/1400).
Compiled By Astha Rawat in Bengaluru; Editing by Simon Jennings