After an eerily calm preannouncement period, earnings season officially gets under way in the holiday-shortened coming week.
"It's been pretty quiet on the earnings front for the past few weeks, but you can't read too much into that, because companies really don't have to say anything," says Brian Williamson, equity trader at Boston Company Asset Management. "And the stakes have definitely been raised, because the market still wants to see earnings growth in the face of high gas prices and the
Thomson First Call currently projects first-quarter
earnings growth of 10.4%, down from the fourth quarter's 14.4% rise. If the forecast holds true, it would mark the 11th consecutive quarter of double-digit profit growth, according to First Call analyst John Butters. That sort of growth streak hasn't been seen since the early 1990s.
Earnings season kicks off Monday, when
reports results. Analysts surveyed by Thomson First Call expect the aluminum producer to post a profit of 51 cents a share, up from the 40 cents a share it earned last year, on $7.15 billion in revenue.
Tuesday's lineup is light, though
( DNA) may provide some action. The biotech powerhouse is expected to report first-quarter EPS of 41 cents, up from 29 cents last year, on $1.96 billion in revenue.
On Wednesday, the market will hear from the likes of
( HDI) earnings report is also on tap for Wednesday. Analysts expect the motorcycle maker to drive home a first-quarter profit of 86 cents a share for the quarter, up from 77 cents a year ago, on $1.29 billion in revenue.
The news will be all about newspaper stocks on Thursday, when
New York Times
( TRB) report their earnings.
Also scheduled for Thursday will be the quarterly report from
. Analysts predict that the conglomerate's first-quarter earnings grew to 39 cents a share from 34 cents last year. On the top line, Wall Street expects a whopping $37.36 billion.
On Friday, the market is closed for the Good Friday holiday.
Earnings will be at the fore of traders' minds in the coming week, but a healthy dose of economic data will add to activity.
February trade balance figures are set for release Wednesday before the bell. Economists surveyed by First Call project that the nation's trade deficit narrowed to $68 billion from $68.5 billion in January.
Later in the day, the Treasury budget for March will be reported. Economists are looking for the deficit to hold steady at $71.2 billion from the prior month.
Thursday will be a big day on the economic front, starting with February business inventories. The inventories are expected to drop 0.3%, after a 0.4% rise in January. Fed-watchers will also surely tune in to the release of March import and export prices to see whether inflation is rearing its ugly head.
Rounding out Thursday's data will be March retail sales figures and the preliminary Michigan consumer sentiment. Economists are predicting that retail sales jumped 0.6% in the month, a turnaround from a 1.4% drop in February. Retail sales excluding autos are expected to rise 0.5% after a decline of 0.6% in February.
Robert Pavlik, chief investment officer for Oaktree Asset Management, believes retail sales will be the most important economic figure to watch this week after Thursday's lighter-than-expected same-store sales reports.
Last week, the International Council of Shopping Centers reported that overall same-store sales, a key metric measuring sales at stores open at least a year, rose 1.9% in March from a year earlier, according to a survey of more than 60 chains. The ICSC had lowered its expected gain for the index to a range of 2% to 2.5% a week ago, but results still fell a bit short.
"The chains are blaming it on the so-called Easter shift, saying the holiday moved three weeks later this year, but it's probably due to higher energy prices for both gas and heating oil," says Pavlik. Light sweet crude prices rose from below $64 to the $67 range at the end of the month.
"Retail sales will be vital because people need to know how the consumer is holding up," says John Silvia, chief economist at Wachovia. "Income growth has been solid, but the consumer is getting nitpicked with higher energy prices and a short-term rise in adjustable mortgage rates."