Earnings Predictions That Matter
A breakdown of this week's reports.
Editor's Note: This was originally posted on the Buzz & Banter. It's being republished here for the benefit of the Minyanville community.
Howdy from New York, where I'm transitioning computers and its making me a lunatic because I just made an Unmuzzled which I can't send. So now I'm going textual with the videos. For full effect, picture me dressed Jimmy the Greek, only sober.
As a final note, plenty of companies report this week. These are simply the ones I believe matter:
Apple (AAPL) and Texas Instruments (TXN). Both are going to beat, but Texas Instruments is going to be up against dramatically downgraded estimates. That makes Apple and its quarterly boot-stomping of wildly low-balled estimates critical. The stated estimates are 1.42 EPS and $9,204 billion in revenues. Anything less will push Apple further down the skids it started riding last week.
My position: Sidelines or hedged.
Coke (KO). Estimates are for 0.82 EPS and $8.12 billion in revenue. When it's suggested by conspiracy theorists such as me that the Dollar is being destroyed to help multinationals, Coke is more or less who I mean. Volumes may be light but the target numbers will, in my opinion, be soundly beaten.
My position: Have enough cash on hand to buy it on a pullback.
Yahoo (YHOO). Yes, it still exists; just not as a stock you should own under any circumstances.
My positions: In a hazmat suit very far away from the phone.
McDonalds (MCD). One of the best-run companies on Earth. My one concern is its missing SSS during the quarter. That very rarely happens and is, obviously, not a good sign. Still, I'm long and happy about it.
eBay (EBAY). Someday I'm going to tell my kids that eBay and Yahoo were once cool. They will never, ever, believe me.
My Position: See Yahoo.
A double whammy of United Parcel Service (UPS) and Potash (POT). A month ago, Potash warned that it was seeing no demand and a dramatic slow-down in usage. Think it fixed that in 30 days? Neither do I. UPS better beat as Fed Ex (FDX) is beating them by about 100% off the lows of March. UPS is coming off a 50% drop in earnings last quarter. I wouldn't trust it with with the money I have in my pocket, let alone make a real investment in UPS.
My position: Cash & Fetal.
Amazon (AMZN). Have I mentioned my love for Amazon? Yes, I believe I have. Suffice it to say I'm less than terrified by the Kindle-killing Sony (SNE) e-reader. Amazon is up against $0.33 EPS and $5.021 billion revenues. It has had a great run, so I'm not sure you'll get more than an opening pop on Friday. You trading types may want to trim the positions if and when that happens.
Microsoft (MSFT). Intel (INTC) beat last week. Apple is going to beat in about an hour. If Microsoft manages to miss, expect to hear nothing but good things about the new operating system ("We're almost done repairing that horrible mess for you!").
My position: Long a little now, by some more later.
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