Second Quarter Earnings Season Starts Strong
The second quarter earnings season has gotten off to a strong start with the first seven Dow stocks all delivering better than expected earnings results. The markets have responded positively to the strong earnings performance with Dow Jones industrial average up 565 points since Alcoa kicked off the earnings season on July 9.
Alcoa’s [[AA]] quarterly results may be the most surprising of this earnings season. The company turned in a quarterly loss of $.26 per share, but that was considerably better than the $.38 loss the Street was expecting. The last time that Alcoa had delivered an earnings beat was for the fourth quarter of 2007.
This last week started with strong quarterly results from Intel [[INTC]] which not only delivered better than expected results, but also raised guidance. Johnson & Johnson [[JNJ]], General Electric [[GE]] and IBM [[IBM]] then followed the pattern by beating Wall Street’s expectations.
Even the battered financial sector has turned in strong results for the second quarter. Bank of America [[BAC]], JP Morgan [[JPM]] and even former Dow component Citigroup [[C]] all reported second quarter results that exceeded Wall Street’s expectations.
So now all eyes are focused on the twelve Dow stocks that report earnings this week. Should we expect more strong results or are these stocks going to deliver earnings misses that will sink the market? Here are exclusive earnings previews of these Dow stocks second quarter results:
Despite the global recessionary environment, we anticipate KO will once again deliver solid results this quarter.
UTC’s strong track record of outperforming Wall Street’s expectations reinforces our belief that they will at least be able to meet consensus expectations again this quarter.
Based on our analysis, we are expecting CAT to report disappointing results that fail to meet Wall Street’s consensus expectations.
Similar to our call last quarter, we are expecting DuPont to deliver disappointing top-line results while earnings will likely come in close to Wall Street’s expectations.
During the second quarter, economic conditions did improve if only marginally and we expect Merck’s earnings performance to reflect that improvement.
We are anticipating another disappointing quarter from Boeing as the global economic recession continues to impact the company’s commercial aircraft segment.
While declining sales & earnings are likely to capture the headlines, we expect Pfizer to post second quarter results that are slightly ahead of Wall Street’s estimates.
Despite concerns surrounding the economy, we believe that McDonald’s is well positioned to continue growing their earnings.
If flat is the new growth, then investors should like AT&T. The company continues to benefit from the popularity of Apple’s iPhone.
We believe the economic environment improved somewhat in the second quarter which should enable AXP to deliver better than expected results once again, but remain concerned about increasing credit losses and declining consumer spending.
While Microsoft has certainly been feeling the impact of the recessionary environment, we feel that Intel’s strong second quarter performance could be indicative of what we can expect from Microsoft.
3M’s business performance has continued to deteriorate in the face of the current global recession.