Wall Street Remains on Earnings Watch
Wall Street will be closely watching corporate profits. The parade of quarterly results has reached roughly its midpoint, and the so-far mostly robust results helped pull markets higher last week. Dozens of major companies are expected to report strong earnings growth this week and investors are watching closely to see whether or not the reports pull the stock market out of its recent slump. Industries to be heard from in large numbers this week include oil producers, chemicals, railroads and insurance. Eight Dow components will report, with the big day Tuesday for Exxon Mobil (XOM), DuPont Co. (DD), SBC Communications (SBC), and Minnesota Mining and Manufacturing (MMM).
Research firm First Call/Thomson Financial said that as of late Wednesday, 228 of the Standard and Poor’s 500 companies had reported first-quarter earnings. Of them, 72% had topped analysts’ consensus estimates.
In the technology sector, the biggest news may be Nortel Networks on Tuesday. Analysts now expect Nortel, the world’s No. 2 network equipment supplier, to report lofty first-quarter financial results, lifted by strong sales for its optical and wireless communications gear. Some analysts expect Brampton, Ontario-based Nortel to better consensus estimates by 1 to 2 cents per share. On average, 25 brokers polled by First Call estimate the company will report a profit of 18 cents per share. IBES International Inc. carries an average estimate of 19 cents from 25 brokers. Nortel develops and sells equipment for wireless communications, central office switching, transmission, access, optical and business networks. Nortel rival Lucent Technologies reported a better-than-expected second-quarter April 19 that some view as a harbinger for Nortel’s numbers.
Several major companies will report earnings today, including American Express Co., which is expected to post a 13% rise in first-quarter earnings. Also expected to report strong earnings today are Conoco, Northrop Grumman, WellPoint Health Networks, GTE, Global Crossing and Merck. Among the companies issuing earnings later in the week are MCI WorldCom, Anheuser Busch and Lockheed Martin.
