The week ahead: Earnings heat
Investors will particularly watch for the fourth-quarter earnings of marquee tech companies such as IBM, Microsoft, Intel, eBay and Nortel Networks.
Following are some of the notable tech-related events scheduled for the week of Jan. 14 to Jan. 18. Wall Street will start to feel the heat from the upcoming earnings season and see if news from major technology companies can thaw the current recession that grips the U.S. economy.
Investors will particularly watch for the fourth-quarter earnings of marquee tech companies such as IBM, Microsoft, Intel, eBay and Nortel Networks, and try to read the tea leaves for any signs of recovery in the future.
If earnings pre-announcements are any indication, it seems like tech companies at least have a better idea of where their business is headed.
Of the 1,500 tech companies followed by First Call, 140 made negative pre-announcements for the fourth quarter. That compares with 245 earnings warnings in the same period for the third quarter and 361 warnings in the first quarter.
Earnings performance looks like it will show less encouraging signs for the broader economy. First Call predicts that earnings from the 500 companies in the Standard & Poor's 500 index will fall 22.6 percent from last year's fourth quarter versus a drop of 21.6 percent in the third quarter, which would be the first time that year-to-year growth fell more than 22 percent since the second quarter of 1991 when earnings fell 24.2 percent.
Wall Street will also get information about the state of business in America with the government's December report on the Consumer Price Index, which measures price changes at the consumer level and is used by many economists to track inflation.
But inflation might not be as big of a concern right now as consumer spending is. Wall Street will scrutinize December retail sales numbers for signs of which way consumer demand is headed, since demand accounts for the majority of economic activity in the United States and is a key barometer of the economy.
The information was gathered from First Call, Hoover's Online, CCBN's StreetEvents and CNET Investor.
Other events scheduled this week:
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- Consulting firm Frost & Sullivan will hold a conference on customer relationship management technology at the Sunburst Resort in Scottsdale, Ariz., Jan. 13 to Jan. 17. Microsoft and Siebel Systems will make presentations.
- Data hosting company Scale Eight will announce its biggest deal to date on Jan. 14, a contract with Microsoft worth more than $1 million to house digital music. The service will enable at least 20,000 simultaneous streams of audio to be sent over the Internet.
- Storability will announce a deal on Jan. 14 worth $3 million to $5 million to license its storage system management software to Compaq Computer. Under the deal, some of what customers pay Compaq for use of the managed storage service will flow back to Storability.
- CIROptics 2002 takes place at the Radisson Suite Hotel Meadowlands in Secaucus, N.J., Jan. 14 to Jan. 15. The conference is for executives at telecom service and equipment companies and features a keynote speech by Ciena CEO Gary Smith.
- Jupiter Media Metrix will hold a free teleconference on how financial service companies can improve their Internet banking business.
- CIBC World Markets will host its Metropolitan Communications Conference at the Ritz Carlton in San Francisco on Jan. 16. Equipment makers like Cisco Systems, Time Warner Telecommunications and ONI Systems will make presentations as well as privately held companies.
- InfoWorld will conduct a conference on Web services at the Westin St. Francis in San Francisco, Jan. 16 to Jan. 17. The event will focus on how to use the Internet to streamline business practices inside and outside of a company. Executives from Microsoft, Sun Microsystems, IBM and BEA Systems will make keynote speeches.
- Jupiter Media Metrix will hold a free teleconference on music-subscription Web sites and the challenges that face the new industry.
- Layoff Lounge will hold an event for job seekers at Twirl in New York City on Jan. 17 at 6:30 p.m. The gathering features keynote speeches by executives from talent search and consulting firms, as well as time for "structured networking."
- The Mission Critical Storage Networking conference takes place at the Sheraton San Marcos in Phoenix, Ariz., Jan. 17 to Jan. 18. The event is for those interested in computer data storage technology; it features presentations by IBM, Bank One and Visa International.
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Monday, Jan. 14
- E*Trade provides online stock trading and banking services. Per-share consensus estimate for the fourth quarter: profit of 4 cents.
- Check Point Software makes network protection software. Per-share consensus estimate for the fourth quarter: profit of 29 cents.
- DoubleClick provides advertising services for Web sites. Per-share consensus estimate for the fourth quarter: loss of 5 cents.
- eBay is an auction Web site. Per-share consensus estimate for the fourth quarter: profit of 13 cents.
- Handspring makes handheld personal computers. Per-share consensus estimate for the second fiscal quarter: loss of 14 cents.
- Hughes Electronics is a subsidiary of General Motors that operates a satellite TV network and is currently pursuing a merger with EchoStar Communications. Per-share consensus estimate for the fourth quarter: loss of 12 cents.
- Intel makes chips for many types of electronics, including PCs and networking equipment. Per-share consensus estimate for the fourth quarter: profit of 11 cents.
- Juniper Networks makes optical gear for telecom carriers. Per-share consensus estimate for the fourth quarter: profit of 5 cents.
- Linear Technology makes chips used in cell phones, satellite gear, and industrial equipment. Per-share consensus estimate for the second fiscal quarter: profit of 14 cents.
- RF Micro Devices makes chips for cell phones and wireless network equipment. Per-share consensus estimate for the third fiscal quarter: profit of 2 cents.
- Teradyne makes test equipment for chipmakers. Per-share consensus estimate for the fourth quarter: loss of 42 cents.
- Advanced Micro Devices makes chips for PCs and networking equipment. Per-share consensus estimate for the fourth quarter: loss of 18 cents.
- Apple Computer makes desktop PCs and laptops. Per-share consensus estimate for the first fiscal quarter: profit of 11 cents.
- Compaq Computer makes PCs, servers and other computer equipment for consumers and businesses, and is currently planning to merge with Hewlett-Packard. Per-share consensus estimate for the fourth quarter: loss of 1 cent.
- Conexant makes chips for communications and network equipment. Per-share consensus estimate for the first fiscal quarter: loss of 44 cents.
- Extreme Networks makes optical telecom gear for carriers. Per-share consensus estimate for the second fiscal quarter: profit of 1 cent.
- Inktomi makes network software for companies. Per-share consensus estimate for the first fiscal quarter: loss of 11 cents.
- Macromedia makes animation and graphics-design software for the Web. Per-share consensus estimate for the third fiscal quarter: loss of 15 cents.
- Redback Networks makes optical gear for telecom carriers. Per-share consensus estimate for the fourth quarter: loss of 21 cents.
- Symantec makes computer security software for companies. Per-share consensus estimate for the third fiscal quarter: profit of 64 cents.
- Yahoo operates a portal Web site. Per-share consensus estimate for the fourth quarter: profit of 1 cent.
- Lucent Technologies spinoff Avaya makes communications gear and software for large businesses. Per-share consensus estimate for the first fiscal quarter: profit of 1 cent.
- IBM, which offers consulting services, makes laptops and mainframe computers. Per-share consensus estimate for the first fiscal quarter: profit of $1.32.
- Kulicke & Soffa makes manufacturing gear for chipmakers. Per-share consensus estimate for the first fiscal quarter: loss of 22 cents.
- Microsoft is a major developer of personal and business software. Per-share consensus estimate for the second fiscal quarter: profit of 45 cents.
- Network Associates makes security and network management software for individuals and businesses. Per-share consensus estimate for the fourth quarter: profit of 8 cents.
- Nortel Networks is a major producer of telecom gear for carriers. Per-share consensus estimate for the fourth quarter: loss of 17 cents.
- Sabre operates a computerized travel reservation system and owns the Travelocity.com Web site. Per-share consensus estimate for the fourth quarter: profit of 2 cents.
- Scientific-Atlanta makes cable set-top boxes. Per-share consensus estimate for the second fiscal quarter: profit of 20 cents.
- Transmeta makes chips for PCs. Per-share consensus estimate for the fourth quarter: loss of 18 cents.
- Unisys makes mainframe computer hardware and also provides consulting services. Per-share consensus estimate for the fourth quarter: profit of 11 cents.
- Xilinx makes chips used by telecommunications, networking, aerospace and military industries. Per-share consensus estimate for the third fiscal quarter: profit of 4 cents.
- Sun Microsystems makes computer servers and software. Per-share consensus estimate for the second fiscal quarter: loss of 4 cents.
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Tuesday, Jan. 15
- Retail Sales figures for December are expected to fall 1.1 percent compared with November's drop of 3.7 percent, according to a Commerce Department report. Excluding automobile sales, Wall Street expects retail sales to stay flat compared with the previous month's fall of 0.5 percent.
- The Consumer Price Index is expected to rise 0.1 percent in December from flat during the previous month. The core CPI, which excludes food and energy prices, is expected to rise 0.2 percent from the 0.4 percent increase in November. This Labor Department index measures price changes at the consumer level, a key way for economists to track inflation.
- Business Inventories is a measurement of the change in the amount of goods in inventory in the United States as reported by the Department of Commerce. Wall Street predicts inventories will fall 0.5 percent in November compared with a 1.6 percent decrease in October.
- Industrial Production represents the monthly percentage change in industrial output as measured by the Federal Reserve. The number measures the physical quantity of items produced, unlike sales value, which combines quantity and price. Analysts believe production will stay flat for the month of December compared with last month's drop of 0.3 percent.
- The monthly Capacity Utilization report from the Federal Reserve indicates the percentage of industrial capacity in use. Economists expect this measurement of industrial activity to slide to 74.6 percent in December from the previous month's 74.7 percent.
- The Federal Reserve will release the Summary of Commentary on Current Economic Conditions, also known as the Beige Book. The study comes out eight times a year and gathers anecdotal information from business leaders on the economic climate in each Federal Reserve district.
- The commencement of construction on new homes, known as Housing Starts, is expected to fall to 1.61 million for December, down from 1.645 million in November, according to Department of Commerce reports. Economists use this statistic to gauge the health of consumer spending on large items in the economy.
- Initial Claims refers to the number of people who filed for unemployment benefits each week as reported by the Department of Labor. Claims will be reported for the week ending Jan. 12.
- The Michigan Consumer Sentiment Index is a measure of consumer confidence as reported monthly by the University of Michigan. No estimates were available for preliminary forecast numbers for January.