What to Watch in the Day Ahead - Thursday, April 27

Sigma Advanced Systems

26/04/2017 19:47

(The Day Ahead is an email and PDF publication that includes the day's major stories and 
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Google parent Alphabet Inc is expected to report a rise in quarterly revenue as advertisers 
spend more to reach out to a wider range of users. While advertising still accounts for the 
lion's share of revenue, the company has been looking to diversify its business beyond 
advertising and focus on other areas such as hardware and cloud business, where it sees a lot of 
growth potential. The company is expected to release its results after the closing bell. 
 
Microsoft Corp is expected to report a rise in profit for the fourth straight quarter, according 
to Thomson Reuters data. Microsoft's flagship cloud product, Azure, and its Office 365 software 
suite have contributed to a burgeoning cloud business, and analysts expect growth to continue. 
The company's personal computing business should also see some improvement, helped by 
stabilizing demand. 
 
Durable goods data for March is expected to show a slight decline to 1.2 percent from 1.8 
percent in February. (0830/1230) Weekly jobless claims data is expected to show a higher reading 
of 245,000 from 244,000 in the previous week. (0830/1230) The Commerce Department will issue its 
"Advance Economic Indicators Report", which includes advance wholesale inventories and advance 
retail inventories excluding autos for March. (0830/1230) The National Association of Realtors 
will release its pending home sales for March. The monthly pending sales change is expected to 
have contracted 1 percent from a 5.5 percent rise in February. (1000/1400) The KC Fed Composite 
Index for April is expected soon after. (1100/1500) 
 
The European Central Bank is scheduled to hold a press conference following the governing 
council monetary policy meeting in Frankfurt. (0930/1330) 
  
Intel Inc, the world's largest chipmaker, is expected to report a rise in quarterly revenue. 
Intel's $14.7 billion acquisition of Mobileye in March puts the company at the forefront of the 
driverless car industry. However, the company still faces a challenge in turning its core 
businesses around. Bright spots exist in the data center group business and Intel has so far 
been successful at maintaining its manufacturing lead in the chip industry. 
 
Ford Motor Co is scheduled to report lower earnings per share in the first quarter and lower 
pretax profit in 2017 due to higher spending on commodities, warranties and investments as well 
as a drop in sales volumes, especially fleet sales. According to the company, U.S. auto industry 
sales in 2017 are likely to dip slightly to 17.7 million units from a record of 17.9 million in 
2016. The company said sales should hit 17.5 million in 2018.  
 
Amazon Inc is expected to report a rise in quarterly revenue, as the online retailer's dominance 
in the e-commerce marketplace, as well as continued investments in its data centers, warehouses 
and video content take hold. Amazon's continued cash burn, however, puts it at odds with its 
profit-seeking investors, and some analysts say that more disappointing operating income 
guidance could put some pressure on the stock. 
     
Seeds and chemicals maker Dow Chemical Co, which is merging with DuPont, is expected to report a 
surge in first-quarter profit, mainly as its year-ago results included a $835 million charge to 
settle a decade-long lawsuit. The company has also said that improving economic growth worldwide 
would boost demand in its consumer-focused businesses such as packaging, consumer care and 
electronics. Investors will seek details of asset sales required to win regulatory clearance for 
Dow's merger with DuPont.  
     
Package delivery company UPS reports first-quarter results before the bell. Much like its rival 
FedEx, UPS has seen its margins pressured by e-commerce deliveries, which typically are not as 
geographically concentrated as business deliveries. Conference call with Chairman and Chief 
Executive Officer David Abney and Chief Financial Officer Richard Peretz will follow. 
     
Bristol-Myers Squibb Co will report first-quarter results before market opens. The drugmaker's 
result is likely to be hurt by a strong dollar. Investors will want a better picture of whether 
the company's cancer drug Opdivo can perform better in future studies in combination with other 
drugs and whether the company can rebound following trial setbacks for its flagship drug. 
     
Johnson Controls Inc, which makes air conditioning and heating equipment and automotive 
batteries, is expected to report higher revenue and profit for the second quarter, helped by the 
acquisition of fire protection and security company Tyco International Plc last year. Investors 
will look for an update on the company's full-year financial forecast. 
     
Raytheon Co, the maker of Patriot missile systems, is expected to report higher revenue for the 
first quarter ended March 31, helped by higher sales and better margins for its Intelligence and 
Information Systems segment, which  provides software and engineering services for homeland 
security and other national and tactical intelligence systems. Investors will look for comments 
on 2017 financial forecast and business environment under President Donald Trump. 
     
Drugmaker AbbVie Inc, which announced the failure of two key studies testing its cancer drug 
last week, is expected to report its results for the first quarter before the bell. The focus 
will be on AbbVie's flagship blockbuster treatment Humira as the company battles to block the 
launch of biosimilar competition from Amgen Inc. 
     
Celgene Corp will report its first-quarter results before market opens. Analysts expect the U.S. 
biotechnology company's results to benefit from price increases of its flagship multiple myeloma 
drug, Revlimid, as well as its psoriasis drug Otezla. Drug pricing has become a lightning rod 
for criticism with several drugmakers coming under federal investigation for steep price 
increases. 
     
CME Group is expected to report a rise in first-quarter profit helped by a fall in operating 
expenses. One of the world's biggest exchanges, plans to close two operations in London by year 
end after they ran up losses of more than $100 million as customers preferred using its U.S. 
operations. 
     
Marathon Petroleum Corp is expected to report a loss in the first-quarter, compared with a 
year-ago profit, as it processed fewer barrels of crude oil during the quarter due to scheduled 
refinery maintenance activities. Investors will seek details of the refiner's outlook for 
inventories of refined products, and margins. 
 
Under Armour Inc is scheduled to report its first-quarter results. The sportswear maker has 
forecast 2017 sales well below analysts' estimates, a sign that the company is finding it tough 
to replicate its past rapid growth as competition intensifies. Both Under Armour and larger 
rival Nike are having to contend with slowing demand for athletic apparel in North America, 
while Under Armour also seems to be losing out on innovation to Nike, whose VaporMax has quickly 
become one of 2017's most sought-after sneakers. 
     
Boutique investment bank Lazard Ltd is expected to report a rise in first-quarter profit on 
higher fees from advising on deals. A slowdown in dealmaking amid worries about China and 
sliding oil prices weighed on Lazard's profit in the year-ago quarter. The firm is expected to 
show a 26 percent rise in fees from M&A advisory, when it reports results. 
     
GoPro Inc is expected to report its second straight rise in quarterly revenue, as the action 
camera maker restructures itself in a bid to return to profitability. Amid production issues for 
its Hero 5 cameras and Karma drones, GoPro cut jobs and closed its entertainment business. The 
company will also incur costs from the restructuring in the quarter. Investors and analysts will 
look for guidance on GoPro's product roadmap for 2017. 
     
GrubHub Inc is expected to report a rise in quarterly revenue. The company, which faces 
competition from Amazon's Prime Now and Yelp's Eat24, has been investing heavily in its delivery 
services to attract more people. 
     
Potash Corp of Saskatchewan, the third-largest global producer of potash fertilizer, is expected 
to report a slightly more profitable first quarter than a year ago, as prices creep higher off 
multi-year lows. Any progress on completing a pending merger with rival Agrium will be of 
interest to investors. The deal is under consideration by U.S. and Canadian regulators. 
     
Crescent Point Energy Corp is expected to post a smaller quarterly loss when it reports results. 
Separately, Canada's No. 1 oil and gas producer, Suncor Energy holds a conference call to 
discuss first quarter results, followed by its annual general meeting later in the day. 
 
The province of Ontario will release its budget and is expected to balance its books in the 
current fiscal year after running deficits every year since 2008-09, when the economy was hit by 
the global financial crisis. Investors will look for any further moves to address affordability 
issues in Toronto's housing market after the provincial government announced a number of 
controlling measures this week, including a 15 percent tax on property purchases by foreign 
buyers in Toronto and the surrounding area. 
     
Brazil's Producer Price Index for March is expected. (0900/1300) Mexico's trade balance figures 
for March is expected to show a slightly higher reading of $950 million from $684 million in 
February. (0900/1300) 
     
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 (Compiled by Nandi Kaul in Bangalore; Editing by Shounak Dasgupta) 
 ((Nandi.Kaul@thomsonreuters.com;)) 
 
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