Earnings Expected to Disappoint Investors

Investors will get a reality check in this holiday-shortened week when some of America’s biggest companies, including Intel Corp. and Microsoft Corp., hand in quarterly scorecards.

About 1,300 companies are reporting results, and many have warned that the numbers and the trends will disappoint.

“A lot of big names will be reporting, and I don’t think the tone will be very strong, so the market will be facing some risk,” said Michael Kayes, chief investment officer of Eastover Capital Management, which oversees about $300 million.

“The economy has slowed in the first quarter with people glued to their TV screens watching the war and with the weather awful,” Kayes said.

Financial results are due from one-third of the 30 firms that make up the Dow industrials.

Among other household names set to report results: Kraft Foods Inc., Caterpillar Inc., Coca-Cola Co., PepsiCo Inc., Ford Motor Co., General Motors Corp., Citigroup Inc., Hughes Electronics Corp., Wells Fargo & Co., General Dynamics Corp. and Mattel Inc.

Earnings growth for the companies in the Standard & Poor’s 500 index is seen rising 7.4% for the first quarter from a year ago, a decline from earlier estimates, said Joe Kalinowski, chief investment officer of Ehrenkrantz King Nussbaum.

“There has been significant deterioration in the [estimates] numbers because of all the negative pre-announcements we’ve been getting,” he said, referring to recent profit warnings.

For every positive pre-announcement, there have been three negative ones, Kalinowski said.