Next Week's Can't Miss Earnings (AA, INFY, CSX, INTC, JPM, JBHT, YUM, SCHW, AMD, GOOG, ISRG, BAC, GE)

Didn’t earnings season just end?  It sure feels that way.  The earnings season floodgates are about to open.  The media will try to tell you this is the most critical earnings season ever, but you already know where we stand.  You will see earnings gains.  There is no way not to when you consider where the economy was in Q1-2009 and that many Americans were buying bullets, gold, and food rations.  The big earnings will come from Alcoa, Inc. (NYSE: AA), Infosys Technologies Ltd. (NASDAQ: INFY), CSX Corp. (NYSE: CSX), Intel Corporation (NASDAQ: INTC), JP Morgan Chase & Co. (NYSE: JPM), YUM! Brands, Inc. (NYSE: YUM), Charles Schwab Corp. (NASDAQ: SCHW), Advanced Micro Devices Inc. (NYSE: AMD), Google Inc. (NASDAQ: GOOG), Intuitive Surgical, Inc. (NASDAQ: ISRG), Bank of America Corporation (NYSE: BAC), and General Electric Co. (NYSE: GE).

We have provided consensus estimates from Thomson Reuters, current share prices, historical prices, and other relevant color on each where applicable.  Get ready, this looks like 5 DJIA components are reporting earnings.

Monday after the close will be the kick-off for earnings season with Alcoa, Inc. (NYSE: AA).  The aluminum giant’s Thomson Reuters estimates are $0.11 EPS on $5.19 billion in revenue.  This will be versus a loss of -$0.59 EPS a year ago.  It is hard to know if Alcoa wants to give solid guidance, but the estimates are $0.24 EPS for next quarter and $0.77 EPS for fiscal 2010. At around $14.26, the stock is trading at 18-times forward earnings.  The 52-week range is $8.10 to $17.60 and the drop from the 52-week highs came after its last earnings.  The bias here seems to be neutral where good news will be rewarded and bad news will bring punishment, which is different from last quarter when companies had to blow out estimates.

Tuesday morning will be Infosys Technologies Ltd. (NASDAQ: INFY) is on deck for Tuesday morning.  The India-based IT outsourcing operation is expected to post $0.57 EPS on $1.26 billion in revenues.  That is only about 4% expected earnings growth on over 12% expected sales growth.  With shares up over $60.00, the 52-week trading range is $26.12 to $62.37.  With fiscal March-2011 estimates of $2.46 EPS, this trades at almost 25-times forward earnings.

CSX Corp. (NYSE: CSX) is going to tell us how well Buffett’s all-in bet on America on BNSF is panning out.  The rail giant is expected to post $0.69 EPS, up from $0.62 EPS a year ago.  The $3.25 earnings estimate for December 2010 gives CSX a 16.2-times earnings multiple for  2010; the $3.93 EPS target for 2011 gives this a forward multiple of 13.4-times 2011 earnings.

Intel Corporation (NASDAQ: INTC) is set Tuesday afternoon and the chip and processor giant is expected to post $0.38 EPS on $9.81 billion in revenues.  Keep in mind that some estimates are $0.40 and even $0.41 EPS and some revenue expectations are above $10 billion.  With shares just under $22.50, the 52-week range is $14.96 to $22.75.  Analysts are expecting shares to rise to over $25.00 over the next year.  With $1.67 EPS targeted for 2010 from Thomson Reuters, the stock trades only at 13.4-times this year’s expected earnings.  For a monopoly, sorry — nearly a monopoly — this is not expensive.  Still, based on the run it seems as though Intel has to beat and raise guidance to please the bulls. Intel was at $20.79 before last earnings and ran above $21.00 before going back under $20.00 all in January.

JP Morgan Chase & Co.  (NYSE: JPM), the best bank in America, is set for Wednesday morning.  Jamie Dimon and friends are expected to report $0.64 EPS, up from $0.40 a year ago.  With estimates at $2.99 for 2010, the best bank in America trades at 15-times forward earnings, which sounds expensive.  Conversely, it trades at 9.7-times the 2011 estimate of $4.68 EPS.  We will be looking for marked declines in delinquencies and charge-offs.  There is no more Uncle Sam’s issue other than banking reform.  If there is not an improvement in the metrics, even the best bank may need a breather.  With shares around $45.50, the 52-week trading range is $28.87 to $47.47.

YUM! Brands, Inc. (NYSE: YUM) is expected to post $0.52 EPS next week on $2.26 billion in revenues.  This would be up 8% on earnings and up almost 2% in revenues.  The big issue here is China growth, where Yum! is adding a store per day.  With annual estimates for 2010 at $2.41 EPS, this trades at over 16-times earnings.

Charles Schwab Corp. (NASDAQ: SCHW) is expected to have a poor showing on earnings.  It just isn’t able to make any spread on its customers’ cash versus what it can make in short-term investments on its own.  The $0.11 EPS expected compares to $0.19 EPS a year ago and the $982.26 million in revenues expected would be a 11.6% drop.

Advanced Micro Devices Inc. (NYSE: AMD) is going to be unexciting next Thursday as far as we are concerned unless it can show an unexpected profit or show that profitability is coming much quicker than expected.  Thomson Reuters estimates are -$0.10 EPS and $1.53 billion in revenue; next quarter estimates are -$0.09 EPS on $1.52 billion in revenue.  Estimates for 2010 are -$0.17 EPS and it is expected to earn $0.15 EPS on $6.89 billion in revenues for 2011.  At $9.35, its 52-week trading range is $3.17 to $10.04.  Meeting estimates won’t be good enough.

Google Inc. (NASDAQ: GOOG) is what traders and investors will be licking their chops over.  With estimates of $6.57 EPS and $4.93 billion in revenue, this would be earnings growth north of 25% and revenue growth of 21%.  The company also never gives guidance, and the revenue is of course ex-TAC.  At $565 now, the 52-week range is $364.16 to $629.51.  This trades at 20-times 2010 expected earnings and less than 18-times 2011 earnings expectations.  Here is the problem, and admittedly one that may be arguable.  Ad rates on CPMs took a dip in February in many sectors of advertising.  This was seen personally and has been confirmed from different ad-dependent entities.  This came back up in March and so far April is strong.  But there is a discrepancy over how this will have worked in February as almost one-third of the quarter.  If Google blows out numbers, its ad clients may (and should) start asking for a better breakdown of the calculations.

Intuitive Surgical, Inc. (NASDAQ: ISRG), the maker of the DaVinci robotic surgery system, is expected to report $1.68 EPS on $294.58 million in revenues next Thursday.  It has beat earnings estimates in the last 3 reports, but at almost $350 this high beta name trades at well over 40-times 2010 earnings and over 35-times 2011 estimates.  The 52-week range here is $103.75 to $367.00, so at almost $350 today it seems as though it will have to keep beating earnings expectations.

Bank of America Corporation (NYSE: BAC) is firmly under its new CEO now, who wants to keep executing on its strategy with earnings next Friday morning.  Thomson Reuters has estimates of $0.09 EPS and $0.17 EPS next quarter. Just like JPMorgan, the estimates for 2010 and 2011 have a wide discrepancy ($0.80 EPS in 2010 and $1.95 EPS in 2011).  That again makes it seem expensive this year and cheap next year if those normalized earnings come up as expected.  The reality is that at $18.55, the 52-week range is $7.00 to $19.10.  Just like in JPMorgan, we want to see better terms of delinquencies and lower charge-offs.  Meeting estimates probably won’t make a rally here.

General Electric Co. (NYSE: GE) is up for earnings next Friday morning.  GE estimates are $0.16 EPS and $37.08 billion in revenues, which would translate to a drop from $0.26 EPS a year ago and a 3.5% drop in revenue.  Estimates next quarter are $0.25 EPS and $38.8 billion in revenue.  With earnings estimates of $1.02 EPS in 2010 and $1.24 EPS in 2011, the stock either has to beat estimates and raise guidance or it is no longer a dirt cheap stock.  We noted that Morningstar gave a $25 fair value target, but that is a much longer-term target.

As a reminder, there will likely be changes on each earnings estimate from Thomson Reuters as each earnings reports gets nearer.  There is always the chance that some dates will change or that some may have already changed.

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JON C. OGG