US Earnings Preview For Feb 16 - 20: WMT, HPQ, TSO, APA, XEC

Earnings season will shift to the retailers with Wal-Mart Stores, Inc. (WMT) releasing results on Tuesday morning. Nearly 1 out of every 10 reports will come from the retail sector.

We have confirmed earnings announcements from 277 companies, including 30 S&P 500 members. WMT and Hewlett-Packard Co. (HPQ) will represent the Dow Jones Industrial Average (^DJI).

Minutes from the January Fed meeting will be published on Wednesday afternoon.

• Tuesday: Empire State Manufacturing Index
• Wednesday: January housing starts and building permits, January Fed meeting minutes, January industrial capacity and utilization, January import and export prices, weekly crude inventories
• Thursday: January Producer Price Index, January Leading Indicators, February Phili Fed survey, weekly initial jobless claims
• Friday: January Consumer Price Index

Fed Governor Elizabeth Duke will speak about the housing markets on Monday morning, at an American Bankers Association conference. Chairman Ben Bernanke will give a presentation about the Fed’s lending programs at a National Press Club luncheon on Wednesday.

February stock options will expire on Friday.

The U.S. financial markets will be closed on Monday, in observance of President’s Day.

Even though it is a holiday-shortened week, there will be a lot of data for traders to look at. Furthermore, Washington will play a role with the stimulus bill likely to be signed and discussions about new bank and housing rescue packages.

In addition to week’s news, traders will be watching support levels for the Dow and the S&P 500 (^GSPC). Should a downward breakout occur, a steep drop could occur.

Companies That Could Issue Positive Earnings Surprises

Hewlett-Packard Co. (HPQ) has a long history of beating expectations. The most accurate estimate of 94 cents is signaling that another positive surprise could be forthcoming. (The consensus earnings estimate is unchanged at 93 cents per share.) Hewlett-Packard is scheduled to report on Wednesday, Feb 18, after the close of trading.

Last month, Tesoro Corporation (TSO) said that fourth-quarter profits should be in a range of 89 cents to $1.04 per share, exclusive of one-time adjustments. Most of the covering brokerage analysts raised their forecasts in response, doubling the consensus earnings estimate to 92 cents per share. The refining company topped expectations last quarter by 8 cents with profits of $1.63 per share. Tesoro is scheduled to report on Thursday, Feb 19, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

More than half of the covering brokerage analysts have lowered their quarterly forecasts on Apache Corporation (APA) over the past 30 days. The negative revisions resulted in a 22-cent drop in the consensus earnings estimate, sending it down to $1.26 per share. The exploration and production company missed expectations last quarter by 79 cents. Apache is scheduled to report on Thursday, Feb 19, before the start of trading.

Nearly all of the covering brokerage analysts have cut their forecasts on Cimarex Energy Co. (XEC) in recent weeks. As a result, the consensus earnings estimate has fallen by 28 cents to 48 cents per share. The exploration and production company’s third quarter results were 13 cents below expectations. Cimarex Energy is scheduled to report on Wednesday, Feb 18, before the start of trading.

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