Investing

Next Week's Top 10 Earnings on Deck (CHK, F, KFT, MA, CSCO, CMCSA, QCOM, BRK-A, SIRI, VG)

NYSE Floor ImageEarnings season may be winding down, but next week still has some very important companies that are economic indicators in and of themselves or are key stocks that have broad customer and investor bases.  Picking only ten companies leaves many key stocks out, but we have some here which will appeal to most investors and traders.  Among next week’s top earnings are Chesapeake Energy Corporation (NYSE: CHK), Ford Motor Company (NYSE: F), Kraft Foods Inc. (NYSE: KFT), MasterCard Incorporated (NYSE: MA), Cisco Systems Inc. (NASDAQ: CSCO), Comcast Corporation (NASDAQ: CMCSA), QUALCOMM Inc. (NASDAQ: QCOM),  and Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B).

We also have the biggest cult stocks of all with SIRIUS Satellite Radio (NASDAQ: SIRI) and Vonage Holdings Corp. (NYSE: VG) reporting next week.  We have offered some color on each stock along with chart data where relevant, along with Thomson Reuters consensus estimates.

Chesapeake Energy Corporation (NYSE: CHK) is on deck for Monday and this will be a key stock to see how it is navigating its past woes and the natural gas market.  Estimates are $0.65 EPS and $1.9 billion in revenues, while next quarter estimates are $0.66 EPS and $2.02 billion in revenue.  September was a stellar month and the stock hit our ‘energy stocks to double target’ and then some.  But then it went higher in October, right before the rug was yanked out from under it.  Shares are now back under $25.00.

Ford Motor Company (NYSE: F) is on deck for Monday.  America’s ONLY car company not under government care has estimates as -$0.13 EPS and $28.2 billion in revenues, while next quarter estimates are -$0.06 EPS and $28.26 billion in revenue.  There is one thing we are looking at and one thing only.  2010 is expected to be a year of growth with $111.2 billion in revenues AND a PROFIT with $0.11 EPS.  If Mulally can still pull that off, then America owes that man a kiss right on the lips.  Ford shares have been very range-bound of late and have been in a $7.00 (actually more like $6.75) to $7.75 trading band.  We did get a Alan Mulally exclusive interview last month.

Kraft Foods Inc. (NYSE: KFT), a DJIA component, is on deck for Tuesday.  Estimates are $0.48 EPS and $10.3 billion in revenues, while next quarter estimates are $0.48 EPS and $11.26 billion in revenue. Kraft has been range-bound between $26 and $28.50 since the start of July and the recent strength only highlights that issue.

MasterCard Incorporated (NYSE: MA) may have already had a bias set by the report this week from Visa Inc. (NYSE: V).  It reports on Tuesday and estimates for the credit card processing giant are $2.92 EPS and $1.34 billion in revenues, while next quarter estimates are $2.56 EPS and $1.29 billion in revenue.  We are not sure about that drop in revenue expected.

Cisco Systems Inc. (NASDAQ: CSCO) may be the tell here for enterprise spending on equipment and cap-ex.  Its earnings are due on Wednesday and estimates are $0.31 EPS and $8.74 billion in revenues, while next quarter estimates are $0.32 EPS and $8.96 billion in revenue.  While there is real damage done on a longer-term uptrend, today’s weakness and recent pullback did damage a near-term uptrend.  It will be interesting to see if Cisco addresses the Tandberg bid of $3.1 billion before or concurrent with earnings.

Comcast Corporation (NASDAQ: CMCSA) is also up for earnings on Wednesday and while it has been range-bound this one broke what was acting as near-term support.  A wildcard is if any pending NBC Universal deal with General Electric Co. (NYSE: GE) comes into play.  Estimates are $0.25 EPS EPS and $8.85 billion in revenues, while next quarter estimates are $0.27 EPS and $8.99 billion in revenue.

QUALCOMM Inc. (NASDAQ: QCOM) is a favorite for all smartphone investors. Estimates are $0.52 EPS and $2.72 billion in revenues, while next quarter estimates are $0.56 EPS and $2,84 billion in revenue.  The stock has been very weak of late after it petered out and sold off, and if there are any real levels under $40.00 as a key support, then you can count on technicians calling for QUALCOMM to head down to $38 or even lower.  But if there is a surge, then there is $3.00 to $5.00 in upside before any serious chart levels come into play.  QUALCOMM is right around its key 200-day moving average ($41.65 today) and did violate that key moving trend line last week and this week before a pop-up and subsequent sell-off.

Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) is a bit of an unknown as it may or may not report next Friday.  We have a suspicion that Mr. Buffett will report but our own telephone call into the company yesterday yielded nothing more from our contact than “call us next week, maybe.”  Estimates are also so sparse here that you better not rely on many other metrics other than what Warren leaves you with and how much the book value has grown. Estimates are ‘roughly’ $1,308.00 EPS. There is an inflection point that appears evident on the chart here for Berkshire, and based on what we are seeing we could easily expect a 5% easy move or an 8% harder move under extremes after the event.  Buffett’s earnings should look great as there were no hurricanes this year.  Unless the market rolls over further, then there should also be a significant boost to its book value.  While we watch Berkshire, we have been of the opinion that its earnings are too convoluted and differ in the reporting of most by enough measure that the real reactions and trends are not really set for a few days after the event.  But that is an opinion, and it is not shared by every Buffett-ite.

Two of the biggest cult stocks of all are also on deck.  Be advised that “consensus estimates” are only rough guides here as these are both low-priced stocks and many of the old analysts that did cover these are no longer following the companies.

SIRIUS Satellite Radio (NASDAQ: SIRI) is on deck for next Thursday.  The satellite radio monopoly has recovered tenfold from an absolute low and is up almost 300% from the March 9 close that traders use to mark the end of the bearish death spiral we were in. Estimates are -$0.02 EPS and $608.7 million in revenues, while next quarter estimates are -$0.02 EPS and $628.7 million in revenue.  As always, positive cash flow and the comments on the EBITDA will be what many look for.  Frankly, we are not overly trusting of the few estimates out there from Thomson Reuters because the sampling is as small as Berkshire Hathaway’s.

Vonage Holdings Corp. (NYSE: VG) is set to report on early Wednesday morning.  We really only have one estimate and we are not too sure how accurate that is.  About all we can say here is to watch that recent upgrade we had where Citi took its target to $1.50 from $0.50.  Even though this one has pulled back from its iPhone App launch highs above $2.00, this one is up about 300% from the March 9 close that traders use to mark the end of the bearish death spiral we were in.

As a reminder, any of these dates can change and many of the estimates will have changed before the reporting dates as analysts make their last-minute changes to estimates.

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JON C. OGG
OCTOBER 30, 2009

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