Two big events will command most of the attention this week: earnings from Cisco Systems and an interest policy meeting at the Federal Reserve.
Telecom equipment maker Cisco will report earnings for its third fiscal quarter on Tuesday. Analysts surveyed by First Call expect the bellwether company to report earnings of 9 cents a share versus the 3 cents it reported a year ago.
The Federal Open Market Committee also meets on Tuesday. This policy arm of the Fed, chaired by Alan Greenspan, is responsible for setting interest rates, which influence the direction of the stock market and the U.S. economy. Most Wall Street watchers expect the Fed to make no changes.
Technology gurus will have the chance to attend a couple of conferences this week to monitor developments throughout the industry. Investors can attend the 30th annual J.P. Morgan H&Q Technology Conference in San Francisco, which features presentations by executives from many top-tier tech companies.
Those interested in the fate of the telecom industry can flock to Las Vegas for NetWorld+Interop, where companies such as 3Com, Agere Systems, AT&T, Nortel Networks, Intel and Cisco will exhibit their wares.
First-quarter earnings season has hit Wall Street over the past few weeks and First Call has a preliminary tally of the performance of corporate America.
With 433 of the 500 companies in Standard & Poor's 500 Index having reported so far, earnings for the first quarter were 12.2 percent lower than the same quarter a year ago--the fifth consecutive quarterly decline. First Call expects earnings to fall 11.4 percent when all companies report, but also estimates that earnings will rise 6.7 percent in the second quarter from last year.
The fortunes of the 84 tech companies in the S&P 500 will most likely have taken a more severe beating over the past quarter. First Call predicts a 30 percent drop in first-quarter earnings from a year ago, but believes earnings will rebound and grow 33 percent in the second quarter.
Other events scheduled this week:
- The NetWorld+Interop conference takes place at the Las Vegas Convention Center in Las Vegas, May 5-10. The event will focus on communication technology and features keynote speeches by Cisco Chief Executive John Chambers, Alcatel CEO Serge Tchuruk and Extreme Networks CEO Gordon Stitt.
- Apple Computer will hold its developer conference at the San Jose Convention Center in San Jose, Calif., May 6-10. Apple CEO Steve Jobs will make the opening keynote speech.
- The J.P. Morgan H&Q Technology conference takes place at the Westin St. Francis Hotel in San Francisco, May 6-10. The event includes presentations from senior executives of more than 200 public companies such as Analog Devices, RealNetworks, Sun Microsystems and RSA Data Security. Featured speakers include U.S. Senator John Kerry and J.P. Morgan Chief Economist John Lipsky.
- Wireless Internet 2002 kicks off at Sunset Village on the campus of the University of California at Los Angeles, May 6-7. The conference will address issues in wireless technology and features speeches by top executives from companies such as Broadcom, Intel, Texas Instruments, Qualcomm and Cingular Wireless.
- Investment bank Lehman Brothers will stage its conference on global services at the Millennium Hotel in New York, May 7-9. The event will address issues in business and professional services, security and facilities management, IT consulting, advertising and marketing services, education services, and consumer services. Scheduled speakers include former U.S. National Security Advisor Sandy Berger, IBM Global Services Group Chief Executive Doug Elix and Electronic Data System CEO Dick Brown.
- IBM's developerWorks Live takes place at the Moscone Center in San Francisco, May 7-10. The conference is geared toward software developers who work with IBM products and features speeches by IBM executives, along with tutorials and workshops.
- After months of fighting to complete their merger, Hewlett-Packard and Compaq Computer will introduce the new HP at an event at HP's Cupertino, Calif., offices on May 7 beginning at 10:30 a.m. PDT. HP CEO Carly Fiorina and President Michael Capellas (formerly the CEO of Compaq) will speak.
- Venture capital firm Garage Technology Ventures will host a fireside chat between Garage CEO Guy Kawasaki and Dawn Lepore, vice chairman of technology at brokerage Charles Schwab. The event starts at 5 p.m. PDT on May 8 in Redwood City, Calif. Kawasaki and Lepore will discuss new technologies that start-ups can sell to large businesses.
Monday, May 6
- BMC Software makes database and storage software. Per-share consensus estimate for the fourth fiscal quarter: profit of 11 cents.
- Cisco makes networking and telecom equipment. Per-share consensus estimate for the third fiscal quarter: profit of 9 cents.
- Activision designs home computer games. Per-share consensus estimate for the fourth fiscal quarter: profit of 11 cents.
- Compuware makes software for large corporate computer networks. Per-share consensus estimate for the fourth fiscal quarter: profit of 7 cents.
- TMP Worldwide operates the job placement Web site Monster.com. Per-share consensus estimate for the first quarter: profit of 14 cents.
- WebMD runs Web sites that provide medical information to consumers and medical professionals. Per-share consensus estimate for the first quarter: profit of 1 cent.
- Terra Lycos is an online media company that operates a variety of Web sites. Per-share consensus estimate for the first quarter: no estimates were available.
- Electronic Arts makes home computer games. Per-share consensus estimate for the fourth fiscal quarter: profit of 28 cents.
Tuesday, May 7
- The Federal Open Market Committee, the policy-setting arm of the Federal Reserve, meets to discuss interest rates. The general consensus on Wall Street is that interest rates will not be changed.
- Quarterly Productivity figures from the Labor Department track the quantity of goods and services produced relative to the amount of labor and capital used in the process, and basically provides a picture of the economy's efficiency. Economists expect this closely watched figure to climb 6.5 percent for the first quarter compared to the fourth-quarter's rise of 5.2 percent.
- Wholesale Inventories represents the percentage change in the amount of goods in wholesale inventories in the United States. Economists expect inventories to fall 0.4 percent for the month of March versus the previous month's drop of 0.7 percent.
- The Consumer Credit report by the Federal Reserve shows the monthly debt assumed by consumers for purposes other than home mortgages. Wall Street predicts debt to increase to $8.0 billion in March from $7.1 billion in February.
- 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 May 4.
- The Import and Export Price Index from the Department of Commerce indicates the percentage change in import and export prices for April. No estimates were available.
- The Producer Price Index is expected to climb 0.5 percent in April from last month's rise of 1 percent. The core PPI, which excludes food and energy prices, is expected to gain 0.2 percent versus March's increase of 0.1 percent. This Labor Department index tracks the cost of what manufacturers pay for raw goods to make products.