Notable earnings
* Google (GOOG) is set to report Q1 results today after the close with a conference call to follow at 4:30pm. GOOG reported Q1 results at 4:03pm. Current Capital IQ consensus stands at EPS of $6.42 (vs. $5.79 last year) on revenues of $15.5 bln (+11%). We would note that the stock split and the Motorola divestiture are complicating EPS estimates; we would be cautious using this headline number when judging results. Revenues as well as the Cost per Click (CPC) and Paid Clicks will provide a better read for participants. The search results for YHOO have helped raise expectations for GOOG ahead of the report. However, Google's results have been volatile.
* IBM (IBM) is expected to report Q1 non-GAAP EPS of $2.55 (vs. $3.00 last year) on sales of $22.95 bln (-2%). IBM has posted YoY rev declines the past seven quarters running, and has missed sales expectations four quarters in a row. Sales are expected to fall 0.5% this year after falling 4.6% in 2013. Sentiment remains negative as sales growth is elusive (currently expected to grow ~1% next year) and EPS growth is dependent on the co's aggressive share repurchases. Co guided for FY14 in its last earnings release, calling for EPS of at least $18; consensus now stands at $17.83 on sales of $99.24 bln.
* SanDisk (SNDK) is expected to report Q1 EPS of $1.25 (vs $0.84 last year) on revs of $1.49 bln (+11% y/y) vs. $1.45-1.525 bln guidance. Co has guided for FY14 revs of $6.4-6.8 bln (consensus is at $6.67 bln). SNDK also guided for Q1 non-GAAP gross margins of 47-49% (Street expectations are near 48%) and FY14 margins of 45-48% (Street expectations are near 47.5%). The co is expected to guide on the conference call (starts at 17:00 ET) for Q2 revs where consensus stands at $1.58 bln and Q2 gross margins, with Street expectations coming in slightly below 48%.
Consumer finance: * American Express (AXP -- high end credit card issuer and payment network) is expected to report Q1 EPS of $1.30 (vs. $1.15 last year) on rev of $8.37 bln (+6%). * Capital One (COF -- credit card issuer/regional bank) is expected to report Q1 EPS of $1.69 on sales of $5.45 bln (-2%).
Tomorrow morning:
* General Electric (GE) is expected to report Q1 adj. EPS of $0.32 (Vs. $0.39 last year) on rev of $34.4 bln (-1.7%). In March, GE filed a registration statement for IPO of its North American Retail Finance business, Synchrony Financial, expected sometime this year.
* Schlumberger (SLB) is expected to report Q1 EPS of $1.20 (vs. $1.01 last year) on rev of $11.45 bln (+7%). SLB has recently broken out to a near 6 year high as money has shifted away into the energy sector (away from growth/technology and biotech stocks). This oil services company is a customer of the E&Ps; oil service peers: HAL, BHI (also reporting tmrw morning) WFT.
* Chipotle (CMG) is expected to report Q1 earnings tomorrow morning before market open, with a conference call to follow at 11am. Capital IQ consensus calls for EPS of $2.85 (vs $2.45 last year) on sales of $873 mln (+20% y/y). Last quarter CMG's EPS was inline while sales beat consensus as comps grew 9.3% vs the 6.7% consensus. Following the release, shares surged and eventually reached new all-time highs before pulling back recently, as growth stocks fell out of favor. Rising food costs may be a concern for margins.
* Goldman Sachs (GS) is set to report earnings tomorrow before the open with a conference call to follow at 8:30am ET. GS reported Q4 results at 7:30am. Capital IQ consensus stands at EPS of $3.43 (vs. $4.29 last year) on rev of $8.7 bln (-13%). Goldman has had a history of big upside surprises on both the top and bottom line. Investment Banks operated in a difficult environment in Q1.
* Morgan Stanley (MS) is set to report earnings at 6:45am ET tomorrow with a conference call to follow at 8:30am. Capital IQ consensus stands at EPS of $0.59 on revenues of $8.52 bln. MS continues to evolve from a pure Investment Bank it a wealth manager as it grows out its Global Wealth Management unit. Even with the new direction, MS has been able to surprise investors with improved performance at its IB unit as it attempts to close the gap between it and GS. However, returns have slowed with the new business model and that has made investors cautious. Still, with the stock trading below book value this name remains one of the more attractive plays in the finance space.
