Earnings Preview For July 28 - Aug 1

Four Dow components will report this week: Chevron (CVX), Exxon Mobil (XOM), Verizon (VZ) and Walt Disney (DIS).

We have confirmed reports from nearly 800 companies, including 120 S&P 500 members.

Energy will be a big focus with more than 60 oil and gas companies reporting. Second-quarter results should be good, given the heights that both crude and natural gas prices reached last month.

July employment figures headline the economic calendar. Key reports include:

• Tuesday: July Conference Board consumer confidence survey, May Case-Schiller home price index
• Wednesday: Weekly oil inventories
• Thursday: Advance second-quarter GDP, July Chicago Purchasing Managers Index, Weekly initial jobless claims
• Friday: July nonfarm payrolls and unemployment, July ISM manufacturing index, June construction spending

The Federal Reserve’s web site lists Governor Frederic Mishkin speaking about the Fed’s communication strategy on Monday, Jul 28.

The August Fed meeting will be held a week from Tuesday, on Aug 5. I expect the Fed to leave interest rates unchanged.

Companies That Could Issue Positive Earnings Surprises

Continental Resources (CLR) has exceeded analysts’ expectations during 3 out of the past 4 quarters by an average margin of 4 cents per share. Recent revisions suggest another upside surprise from the oil and gas company could be forthcoming. Within the past 30 days, 2 of the 6 brokerage analysts have raised their forecasts, pushing the second-quarter consensus earnings estimates 6 cents higher to 69 cents per share. Continental Resources is scheduled to report on Tuesday, July 29, before the start of trading.

Approximately half of the covering brokerage analysts have raised their second-quarter forecasts on Southwestern Energy (SWN) in recent weeks. The changes have pushed the consensus earnings estimate 10% higher to 37 cents per share. The most accurate estimate is even more bullish at 38 cents per share. SWN has topped expectations for three consecutive quarters. Southwestern Energy is scheduled to report on Wednesday, July 30, after the close of trading.

Waste Management (WMI) recently raised its second-quarter earnings guidance to between 61 and 62 cents per share, reflecting anticipated revenue growth of 3.9%. Nearly all of the covering brokerage analysts responded with higher projections, sending the consensus earnings estimate two cents higher to 60 cents per share. The most accurate estimate is slightly more bullish at 61 cents per share. WMI has surprised to the upside during three out of the past four quarters. Waste Management is scheduled to report on Tuesday, July 29, before the start of trading.

The average second-quarter earnings projection for Whiting Petroleum (WLL) has risen 14 cents this month to $2.01 per share. The most accurate estimate is even more bullish at $2.03 per share. This energy company has topped expectations for 4 consecutive quarters by an average margin of 15 cents per share. Whiting Petroleum is scheduled to report on Wednesday, Jul 30, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

Genworth Financial’s (GNW) first-quarter results were seven cents below expectations. Ahead of the company’s second-quarter report, 4 out of the 13 covering brokerage analysts have lowered their projections. The revisions have caused the consensus earnings estimate to fall 3 cents to 55 cents per share. The most accurate estimate is more bearish at 51 cents per share. Genworth Financial is scheduled to report on Tuesday, July 29, after the close of trading.

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