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Ahead of earnings season: POST forecast

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Staff Writer | October 10, 2016
Earnings season
Earnings reports   Brexit will impact expectations

The earnings season is to start this week with Alcoa traditionally being the first to report, followed by CSX and big banks.

This U.S. earnings season will be influenced by the British decision to exit the European Union and the fluctuation of the British pound will be mentioned not as much as a reason for lower revenues, but in expectations because the UK is a large market for the U.S. companies and it is not clear yet how the exit will unfold and how long it would last.

The earnings season starts with the aluminum producer Alcoa, which could report slightly lower revenue than the last year, but earnings could be higher.

The aluminum deficit in the markets, a slight growth in the auto industry and deliveries of aircraft, call for EPS with the top guidance of $0.34. The company is set to split into two companies on November 1.

Rail operator CSX Corp. will post its third-quarter results on Wednesday. The company is focused on the shipments for the agricultural, metal and chemical industry. Taking into account conditions in those industries, EPS is expected to be $0.46-$0.47, while revenue is expected to be $2.70 billion.

Citigroup is set to report its third-quarter results early Friday. The bank may expect good consumer banking revenues growth in Asia and Mexico, and that, together with focusing on its core business, would result in EPS of $1.10 to even $1.20 on $17+ billion in revenue.

JPMorgan Chase & Co. will report its third-quarter results Friday morning. Interest by big investors and their increase in stake call for good results with revenue to be $24 billion or slightly lower, while EPS should move around $1.40.

Wells Fargo & Co. is set to share its quarterly earnings on Friday. The bank has serious problems with attacks from all sides and with loss of trust it simply needs good results.

However, the quarter is concluded and the fine the bank paid - and may pay in the future - is not a heavy burden. Its EPS should be around $1.00, while revenue could come in around $23.20 billion.


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