US Stock Market: Earnings Preview For Dec 1 - 5

December greets investors with a light earnings calendar and a large amount of economic data.

The week’s biggest scheduled event will be the Big 3 bailout. American automakers Chrysler, Ford Motor Co. (F) and General Motors Corporation (GM) are required to provide Congress with a turnaround plan by Tuesday, Dec 2. Hearings are scheduled for the end of the week, with a vote occurring as soon as Dec 8. (A suggestion to the CEOs, don’t use the corporate jets to travel to Washington.)

Just 47 companies are confirmed to report. The largest companies are S&P 500 members Big Lots (BIG), Novell Inc. (NOVL), Sears Holdings (SHLD) and Staples Inc. (SPLS).

Key economic data will include the November ISM manufacturing index (Monday), Beige Book (Wednesday) and November employment numbers (Friday).

• Monday: November ISM manufacturing index, October construction spending
• Tuesday: November auto sales
• Wednesday: November ISM services index, Revised third-quarter productivity, Federal Reserve Beige Book (afternoon release), weekly crude inventories
• Thursday: October factory orders, weekly initial jobless claims
• Friday: November unemployment and nonfarm payrolls, October consumer credit

No Fed members are scheduled to deliver speeches.

December is typically a bullish month; however, given the current economic backdrop and continued volatility, the markets remain unpredictable. Black Friday sales data could have an impact early in the week, while reaction to the automakers’ turnaround plans could affect market direction late in the week.

Unscheduled events remain a wildcard, including any new actions taken by Treasury Secretary Henry Paulson or new economic proposals from President-elect Barrack Obama.

Companies That Could Issue Positive Earnings Surprises

Casey’s General Stores (CASY) has topped expectations during 3 out of the last 4 quarters. Ahead of the company’s fiscal second-quarter report, 2 out of the 3 covering brokerage analysts have raised their forecasts on the gas and convenience store chain. These revisions have pushed the consensus earnings estimate 6 cents higher to 58 cents per share. The most accurate estimate is even more bullish at 61 cents per share. CASY is scheduled to report on Wednesday, Dec 3, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Sigma Designs (SIGM) recently warned that third-quarter revenues would be well below its previous guidance. The company now expects to report revenues of $46.5 million. Previously, the company projected that third-quarter revenues would stay near those of the second-quarter, which totaled $58.2 million.

Nearly all of the 5 covering brokerage analysts cut their guidance in response, causing the consensus earnings estimate to fall 10 cents to 24 cents per share. The most accurate estimate is more bearish at 21 cents per share. The semiconductor company has missed earnings once in the past 2 quarters. SIGM is scheduled to report on Tuesday, Dec 2, after the close of trading.

Earnings Calendar

Here is a list of companies that we have confirmed will report during the week of Dec 1 - 5¹. Prices are as of Tuesday’s, Nov 25, close.

BMO = Before The Market Open, AMC = After Market Close

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