Big banks, tech giants and economic bellwethers such as General
Electric Co. (GE) are among the companies reporting second-quarter
results next week.
Economic reports are expected to show some increases in
wholesale and consumer inflation in June.
The Senate begins confirmation hearings on Supreme Court nominee
Judge Sonia Sotomayor on Monday.
Big Banks See Fees Up, Suffer Loan Losses
Some of the nation's largest banks, and a former Wall Street
firm turned bank-holding company, report second-quarter results
next week. The latter, Goldman Sachs Group (GS), which reports
Tuesday, is expected to post a profit of $3.42 a share, down from
$4.58 a share a year earlier. Analysts predict Goldman will post
the best quarter-on-quarter increase in investment-banking revenues
compared with rivals, with stronger fee income, especially from
debt and equity underwriting, as the main earnings driver.
Investment banking and a boom in mortgage refinancing also are
likely to help big banks offset rising losses from bad loans.
JPMorgan Chase & Co. will post results Thursday, and Citigroup
Inc. (C) and Bank of America Corp. (BAC), both Friday. JPMorgan and
Bank of America's earnings should be far below a year earlier,
while Citi's loss is likely to narrow.
Intel 2Q Earnings Likely Down; IBM, Google Up
Intel Corp. (INTC) is expected to post significantly lower
second-quarter results Tuesday, underscoring how the broad economic
slump is weighing down the chip industry. But Wall Street also sees
the world's largest maker of computer microprocessors pointing to
signs of a stabilizing market after a sharp drop in demand last
fall.
International Business Machines Corp. (IBM) and Google Inc.
(GOOG), which report Thursday, are likely to post earnings gains
from a year earlier. IBM's per-share earnings are expected to be up
slightly with revenue down about 12%, while Google is seen with
higher earnings and revenue despite the weak economy and sagging
advertising prices. But the search-engine company's results may lag
behind its first-quarter results.
Foreign-Exchange Rates Hurt Pharma In 2Q
Unfavorable currency-exchange comparisons are expected to hurt
second-quarter earnings of major U.S.-based pharmaceutical
companies. But the quarter could be the nadir for negative currency
impacts, which analysts expect to ease in the second half of the
year. Overall, Big Pharma continues to face sales pressure from
generic competition, the weak economy, increased scrutiny of drug
safety and difficulties bringing new products to market. The
companies are cutting costs to bolster profits in the face of such
challenges.
Health-care giant Johnson & Johnson (JNJ) reports results
Tuesday, followed by Abbott Laboratories (ABT) on Wednesday. This
could be the last earnings season for drug makers Wyeth (WYE) and
Schering-Plough Corp. (SGP) if their impending acquisitions by
Pfizer Inc. (PFE) and Merck & Co. (MRK), respectively, close
before third-quarter results are due in October.
Low Expectations For GE Results
General Electric reports second-quarter results next Friday,
with concerns rampant regarding proposed new financial regulations
that some observers say eventually could push the conglomerate to
spin off its big finance arm, GE Capital. Investors will be closely
scrutinizing GE's comments regarding the matter.
They will also be looking to GE's big industrial businesses,
which make everything from aircraft engines to locomotives, for
clues about the economy's direction. Expectations are low, with GE
forecast to earn 23 cents a share, compared with 54 cents a year
earlier.
AMR's 2Q Loss Likely To Narrow
AMR Corp. (AMR), parent of American Airlines, is expected to
report a narrower second-quarter loss Wednesday. The company
projected mainline unit revenue fell 16% to 17% in the quarter,
while total cargo and other revenue dropped 7.8% to 8.8%. Slumping
demand for travel and higher fuel prices prompted American
Airlines, and others, to further reduce the number of flights it
operates. It recently raised fares, although it matched a limited
sale by Southwest Airlines Co. (LUV).
Harley-Davidson 2Q Results Seen Down
Harley-Davidson Inc. (HOG) is expected to report second-quarter
per-share earnings of 25 cents on revenue of $1.18 billion. That is
compared with 95 cents and $1.57 billion, respectively, a year
earlier. Citigroup estimated U.S. retail sales could be down in the
high-teens as it cut the stock to sell from hold recently. Citi
also expects international sales will remain weak. The seizing up
of credit markets last fall has wreaked havoc on Harley-Davidson's
finance unit.
June Inflation Measures Estimated Higher
Economists predict June measures of wholesale and consumer
prices will show larger increases than in recent months. The
Producer Price Index, out Tuesday, is expected to climb 0.8%,
compared with 0.2% in May, and the Consumer Price Index, out
Wednesday, is seen up 0.6%, compared with 0.1% last month. The
government also reports on June retail sales Tuesday and industrial
production Wednesday.
A government report Friday is expected to show lower housing
starts in June but an increase in building permits. The National
Association of Home Builders issues its July housing market index
Thursday.
Regional manufacturing reports will be released by the New York
Fed on Wednesday and Philadelphia Fed on Thursday. The Federal
Reserve issues minutes from its June meeting on interest rates
Wednesday.
GM To Resume Production Next Week
General Motors Corp. (GMGMQ) plans to resume production as
General Motors Co. next week. The Detroit auto maker surprised many
industry analysts by exiting bankruptcy Friday, 40 days after its
filing. One of its first hurdles will be dealing with a battered
supplier base littered with companies that are either in or close
to filing for Chapter 11.
NY Lawyer Dreier To Be Sentenced Monday
High-profile New York lawyer Marc Dreier, who pleaded guilty in
May to eight felony charges, will be sentenced Monday. This week,
he asked the court to sentence him to no more than 12 1/2 years in
prison. Under federal sentencing guidelines, Dreier, 59, faces a
possible sentence of 145 years. He pleaded guilty to charges
related to fraud and money laundering related to a scheme to sell
bogus promissory notes to investors.
Sotomayor Confirmation Hearing To Start
The Senate Judiciary Committee will start its confirmation
hearing Monday for President Barack Obama's Supreme Court pick,
Judge Sonia Sotomayor. Outnumbered nearly 2-to-1 on the panel and
almost as badly on the Senate floor, Republicans have concluded
they have almost no chance of defeating her nomination but will use
her confirmation hearing to promote conservative legal ideas they
hope will pay off in future political battles, particularly if
Obama gets to fill additional vacancies on the Supreme Court.
Paulson To Testify On Bank Of America Deal
Former Treasury Secretary Henry Paulson is expected to testify
Thursday before U.S. lawmakers on the government's role in Bank of
America Corp.'s (BAC) acquisition of Merrill Lynch. Paulson's
testimony will mark the third in a series of high-profile hearings
held by the House Committee on Oversight and Government Reform. He
is likely to discuss when federal officials became aware of
mounting losses at Merrill Lynch and the decision to give Bank of
America an additional $20 billion rescue in January.
SEC Chairwoman To Discuss Agency At Hearing
Securities and Exchange Commission Chairwoman Mary Schapiro will
testify Tuesday before a House panel to discuss the challenges the
SEC faces in a post-Madoff world. The hearing will be held by the
House Financial Services Capital Markets Subcommittee, which has
jurisdiction over the SEC.
Obama Will Visit Ghana After G8 Meeting
After the conclusion of the meeting of the eight largest
industrialized nations in Italy, President Obama travels to the
West African nation of Ghana on Saturday. He plans to tell that
country's parliament that recipients of U.S. assistance must bring
to their agricultural-aid programs the same efficiencies and
effectiveness that have been applied recently to health efforts,
especially on AIDS and education.
Conferences
Among the significant conferences next week are the Oppenheimer
& Co. Consumer, Gaming, Lodging & Leisure Conference on
Tuesday and Wednesday in Boston, and Private Equity International
Strategic Financial Management Conference on Wednesday and Thursday
in New York.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com
(Bob Sechler, Peter Loftus and other Dow Jones Newswires staff
contributed to this report.)