What Investors Should Watch For Today
The Dow Jones Industrial Average (INDEX: ^DJI) saw its first loss of the week yesterday on poor earnings results from the highest-weighted Dow component, IBM, along with chipmaker Intel. Today, earnings from five Dow components will help drive any market moves. Here's who's reporting, and what to expect.
Both Bank of America (NYS: BAC) and Travelers report earnings before the market opens. Bank of America is currently working on its two-phase restructuring named "Project New BAC," hoping to trim some fat and improve profits with $5 billion in cost savings by 2014. Fellow Fool Anand Chokkavelu argues that this restructuring could double or triple its stock price, especially once it improves its mortgage operations. Well-received earnings could be extra proof for Bank of America's bulls.
Travelers has missed most of the rally this year, partly because the insurance company had the worst weather-related losses in its history during 2011. However, as fellow Fool Jason Moser notes when recommending it for your IRA, "management is 'fully committed' to returning capital to shareholders via share repurchases and dividends." Barring any catastrophes, analysts expect Travelers to earn $1.51 per share.
Consistently beating expectations
Chemical maker DuPont (NYS: DD) also reports earnings today and typically beats analyst expectations by an average of 11%. The company recently increased the price for titanium dioxide -- a chemical pigment used in paint, toothpaste, concrete, food, sunscreen, and plastic, among other things -- and has plans to expand its production of the chemical to keep its leadership in titanium dioxide. The company also looks to launch 150 new seed and corn products this year in its agriculture segment. If price increases and new products improved revenue, look for another earnings beat from DuPont.
The earnings call
Verizon Communications (NYS: VZ) reports before the market opens today, with an estimated 12% growth in earnings from the previous year. Investors should get a peek at the progress of its cross-selling partnership with Comcast, which began in January, along with the big sales driver of smartphones. Fellow Fool Anders Bylund expects "yet another steady-as-she-goes quarter out of Big Red."
Another potential disappointing tech stock?
IBM and Intel's earnings miss might extend to Microsoft (NAS: MSFT) , which reports after the market closes today. IBM reported revenues from hardware down 6% from a year prior, which doesn't bode well for Microsoft. However, global PC sales rose almost 2% in this first quarter, so analyst expectations of a 4.6% growth in revenue over the previous year might come true.
Prepare for the rest of earnings season
Stocks can jump or fall on any tidbit of news, but over the long term it's the underlying business in which you invest and that drives solid long-term returns. Earnings reports are a great peek into how a business is performing, as well as how it might deliver over several years. Make sure to check out our free report, "5 Stocks Investors Need to Watch This Earnings Season."
At the time this article was published Fool contributorDan Newmanholds no shares of the companies mentioned above. Follow him on Twitter, where he goes by @TMFHelloNewman.The Motley Fool owns shares of IBM, Intel, Microsoft, and Bank of America.Motley Fool newsletter serviceshave recommended buying shares of Microsoft and Intel and creating a bull call spread position in Microsoft. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.
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