This Coming Week’s Top Earnings Projections (JNJ, AAPL, BNI, EBAY, AMD, GOOG, MSFT, GE, SLB)

January 19, 2009 by Douglas A. McIntyre

Money_stack_picThis week is the launch of earnings season, and we have outlined the companies which we believe will have the largest impact on their sector or on the overall market. Johnson & Johnson (NYSE: JNJ) is the big company reporting Tuesday.  On Wednesday, we get earnings from Apple, Inc. (NASDAQ: AAPL), Burlington Northern Santa Fe Corp. (NYSE: BNI), and eBay Inc. (NASDAQ: EBAY).  Advanced Micro Devices Inc. (NYSE: AMD), Google Inc. (NASDAQ: GOOG), and Microsoft Corporation (NASDAQ: MSFT) report on Thursday.  On Friday we get earnings from General Electric Co. (NYSE: GE) and oil field services giant Schlumbrger Limited (NYSE: SLB).

Johnson & Johnson (NYSE: JNJ) earnings will givemore insight into consumer products and drug/medicalcompanies which start reporting next week  Estimates are$0.92 EPS on $15.93 billion in revenue. Analysts expect earnings for the next quarter of $1.25 EPS and $15.65 billion in revenue.  As this is one of the few companieswhich has visibility we’d expect it to offer annual guidance.Estimates for Fiscal DEC-2009 are $4.61 EPS (2% estimated growth) with$63.6 billion in revenues (about 1% decline).

On Wednesday we are going to hear again about thehealth issues around Steve Jobs.  Apple Inc. (NASDAQ: AAPL) is expected to report$1.38 EPS and $9.76 billion in revenue.  We are somewhat cautious here since consumers may be less willing to pay premium prices for Apple products.  We think it will offer guidance for one quarter only.  Analysts expect the iPod maker to earn $1.13 EPSand $8.24 billion in revenue in the current quarter.

Burlington Northern Santa Fe Corp. (NYSE: BNI) will be one of the firstof the large rail and transport companies, and will possibly set the tone for transportation stocks.  Warren Buffet’s Berkshire Hathaway(NYSE: BRK-A) is also a huge holder.  Estimates are $1.76 EPS and$4.42 billion in revenue. Analysts expect $1.23 EPS and$3.9 billion in revenue for the coming quarter.  As shares have continued losing their value, the word isout that the rail business is plummeting rapidly and continues to showweakness.

eBay Inc. (NASDAQ: EBAY) is also set to report earnings after the closeon Wednesday.  The online auction giant is expected to show earnings of$0.39 EPS on $2.12 billion in revenues.  The company generally doesoffer guidance, and estimates are $0.40 EPS and $2.12 billion inrevenues next quarter and $1.62 EPS and $8.67 billion revenues forFiscal DEC-2009.  There has been a lowering of expectations fromanalysts, although nowhere near what has been seen elsewhere inInternet and tech stocks.  These forward numbers are an extra risk asthere are many concerns over the constant changes brought up over themodel and its sideshow efforts like Skype.  But if the company does notguide down very much for 2009, we will all need to ask ourselves evenwith no earnings growth if 8-times forward earnings sound expensive.

On Thursday we get the number two processor and graphics chipsetearnings from the troubled Advanced Micro Devices Inc. (NYSE: AMD).Intel already set up the tone for awful earnings and extremely limitedforward guidance.  We expect the same here. And NVIDIA set up the tonefor awful graphic chipsets.  Estimates here are -$0.54 EPS and $1.23billion in revenue.  This one is not crucial to the global tech world,but its future is becoming more of a question.  We won’t beshocked if it speaks about even the possibilities of additional fundsthis year.  Lastly, the Intel case should come front and center.

Google Inc. (NASDAQ: GOOG) also reports Thursday after the close.  Thiswill set up the tone for the rest of the content, search, and mediabusinesses which are dependent almost entirely upon online advertisingfor revenus.  Also, keep in mind that Google offers NO guidance andthe estimates are on an ex-TAC (traffic acquisition costs).  Estimatesare $4.96 EPS and $4.12 billion in revenues.  Ninety days ago estimateswere $5.17 EPS.

Microsoft Corporation (NASDAQ: MSFT) is under the same cloud asIntel and other tech companies.  At least it has otherforms of revenues now, but the spending weakness is present in all ofits segments.  Analysts are looking for $0.50 EPS and $17.12 billion inrevenue.  Next quarter estimates are $0.48 EPS on $15.2 billion inrevenues, and estimates for Fiscal June-2009 are $1.96 EPS and $63.76billion.  We expect Steve Ballmer and friends to either take their ownnumbers down a bit further or to at least comment on the lack ofvisibility.  90-days ago the estimates were $0.55 EPS for the lastquarter and $2.11 EPS for fiscal June-2009.

General Electric Co. (NYSE: GE) is set to report earnings early Fridaymorning.  It’s nearly impossible to get excited here, particularlyas the ratings agencies have fired a shot across the bow of this shipwith what further earnings declines will do to that "AAA" rating.  The companyhas already said it will not make micro-guidance and will go for moretargeted earnings.  Estimates for this last quarter are $0.37 EPS and$48.86 billion in revenue.  Analysts are looking for earnings andrevenue contraction in 2009.  To show how far estimates have come down,the consensus estimate for Q4-2008 was $0.52 EPS just 90 days ago.

Schlumberger Limited (NYSE: SLB) also reports on Friday morning, andhere we will get the first real look at just how much these lower oilprices are going to affect the forward cap-ex and project advancementfor 2009 now that oil is under $40 per barrel.  We’ll also likely getmore detailed data on all the layoffs we previously outlined.Estimates for this last quarter are $1.08 EPS and $7.08 billion inrevenues.  Oil companies give no real earnings guidance, but analystsare looking for a 5% revenue decline and a drop of almost 20% in EPSfor all of 2009 over 2008.

As a reminder, these numbers are based on the most current ThomsonReuters (First Call) data available.  These estimates will likely havechanged at least marginally by the end of the week when other earningsand more news items have been released.

Jon C. Ogg
January 19, 2009