5 Things to Watch Next Week: Potter Mania, Brokers, Apple, Ballmer on Trial

Rick Aristotle Munarriz
Updated
Harry Potter
Harry Potter

There's no such thing as a summertime lull when earnings season is upon us. Even if you don't feel like alerting the "sell in May and go away" camp of investors, there are plenty of headlines to be written about the week ahead.

Here are some of the items that will help shape the week ahead.

1. Welcome back, Potter: If you find any sleepy-eyed drivers on the road wearing wizard robes today, don't panic. They're probably just Harry Potter fans trying to stay awake after catching one of the midnight premieres for Harry Potter and the Deathly Hallows Part 2 earlier today.

Why is today's debut something to watch for next week? Good question, my fellow muggle. We'll be getting the first tallies of box office receipts on late Sunday and early Monday, and how well the movie fares at a multiplex near you this week may move some of the related stocks:

  • Time Warner (TWX) is the company behind the eight-film series. Some have wondered what the studio will do for an encore, but life after Potter isn't a question that Warner Bros. will need to answer now. DVD, Blu-ray, digital distribution, and TV broadcasting rights will keep Time Warner milking J. K. Rowling's magical franchise for a long time.

  • RealD (RLD) and IMAX (IMAX) may have even more at stake once the weekend numbers are made public. RealD is the leading outfitter of 3-D screens around the country. IMAX has spent decades building out its network of supersized cinematic solutions, but it's really come into its own in recent years as a global phenomenon as its emphasis has shifted from museum documentaries to blown-up Hollywood blockbusters remastered on its gargantuan screens. Potter is available in 3-D and IMAX beyond the conventional 2-D screens. It will either validate premium cinema or lead investors to wonder if it was all a passing craze.


2. Discount brokers on parade: Discount brokers are the gateways of empowerment for individual investors. The E*TRADE Baby is just as ubiquitous as the E. F. Hutton ads were a generation ago.

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Charles Schwab (SCHW), TD AMERITRADE (AMTD), and E*TRADE (ETFC) are three of the country's largest discounters, and they will all be stepping up to report their quarterly financials next week.

We'll have daily dissections. Niche pioneer Schwab reports Monday. TD AMERITRADE -- the company formed as the result of merging TD Waterhouse with Ameritrade -- reports Tuesday. And then it's E*TRADE, baby, on Wednesday.

The firms report monthly metrics, so we know that investors haven't been doing a whole lot of trading this past quarter. However, analysts still see Schwab and E*TRADE posting healthier profitability than they did a year ago.

3. An Apple a Day: Everybody seems to have an opinion on the class act of Cupertino, and understandably so. Apple (AAPL) has grown to become the country's most valuable tech stock, second only in the investing universe to ExxonMobil (XOM) in terms of market capitalization.

Apple reports Tuesday after the market close. Wall Street is targeting a profit of $5.73 a share out of Apple, a healthy gain from the $3.51 a share it rang up a year earlier. Don't be surprised if Apple earns more than that, since the tech bellwether has routinely blasted past analyst estimates.

The real meat in the report will be how many Macs, iPhones, and iPads the company sold in the past three months. Investors hoping for news on the next iPhone or clarification on rumors that the third generation of iPad tablets may hit the market later this calendar year will be out of luck. Apple saves those unveilings for announced media events.

4. Office gossip: Few investors have Tuesday's quarterly report from Cintas (CTAS) circled as "must watch" viewing. But that's a mistake.

Cintas is the country's leading provider of uniform rentals and other corporate consumables. In other words, it's a great proxy for the state of corporate America. If Cintas is leasing out more freshly washed uniforms, it's a good sign that companies are hiring again.

Office furniture specialist Knoll (KNL) also reports Tuesday, but Cintas is still the better proxy given its wide-reaching popularity.

5. Mr. Softy v. The Angry Mob: There's a lot of drama heading into Thursday's quarterly report out of Microsoft (MSFT), and it has little to do with numbers.

Institutional investors and hedge fund managers have gone public with calls for CEO Steve Ballmer to step down and for the world's largest software company to ramp up its dividend and share buybacks.

The root of the criticism stems from Microsoft's stagnant share price over the past decade and iffy prospects for its future as cheaper operating systems and productivity software grow in popularity.

Ballmer isn't likely to go anywhere for now, and no analysts on the conference call will likely be brave enough to bring up the matter. Returning money to investors through one-time dividends or massive stock repurchases is fairer game, but good luck trying to tell Microsoft what to do.

Longtime Motley Fool contrbutor Rick Munarriz does not own shares in any of the companies in this story. The Motley Fool owns shares of Microsoft and Apple.

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