Earnings Preview for Oct 7 - 10

As I write this on Friday morning, there is scuttlebutt that several central banks could announce rate cuts on Monday morning. Though the rumors are unconfirmed, fed fund futures are pricing in a significantly higher probability of a half-point cut occurring at the late-October meeting.

Alcoa (AA - Snapshot Report) will "officially" kick off earnings season when it reports on Tuesday afternoon. The aluminum maker is expected to announce profits of 60 cents per share.

Joining AA throughout the week will be fellow S&P 500 members: Costco (COST - Snapshot Report), Chevron (CVX - Analyst Report), General Electric (GE - Analyst Report), Host Hotel & Resorts (HST - Snapshot Report), Monsanto (MON - Snapshot Report), Progressive (PGR - Analyst Report), Safeway (SWY - Analyst Report) and Yum! Brands (YUM - Analyst Report).

The minutes from the September Fed meeting will be released on Tuesday afternoon. If a rate cut is announced on Monday morning, the significance of these minutes would be reduced. Nonetheless, the notes will be scrutinized for anything that could unnerve traders or give them hope that things are better than thought.

The week's key economic data will include:

• Tuesday: August consumer credit, Fed minutes
• Wednesday: August pending home sales, weekly crude inventories
• Thursday: September import and export prices, weekly initial jobless claims
• Friday: August trade balance

Fed Chairman Ben Bernanke is scheduled to speak at the National Association of Business Economics' annual meeting on Tuesday afternoon. He will discuss the economy and financial markets.

Yom Kippur, the Jewish day of atonement, starts Wednesday at sundown. This should result in lower volume on Thursday. The Stock Trader's Almanac says buying on Yom Kippur and selling at the start of Passover has been a profitable strategy.

Companies That Could Issue Positive Earnings Surprises

This past Thursday, Monsanto (MON - Snapshot Report) boosted its fiscal 2008 earnings outlook for the second time in as many months. MON cited strong performance from its Roundup business as the reason for the recent bullishness.

Brokerage analysts accordingly narrowed their fiscal fourth-quarter projections to a loss of 12 cents per share from a previously forecasted loss of 16 cents per share. The most accurate estimate is more bullish at a loss of 10 cents per share. Monsanto is scheduled to report on Wednesday, Oct 10, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

General Electric (GE - Analyst Report) recently cut its profit guidance, as volatility in the credit markets hurt its finance arm - GE Capital. The division contributes about 45% to GE’s earnings. All of the covering brokerage analysts lowered their profit estimates, sending the third-quarter consensus earnings estimate down to 45 cents per share. The Zacks #4 Rank ("sell") company has missed consensus in 2 of the last 4 quarters. GE is scheduled to report on Friday, Oct 10, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com.

Earnings Calendar

Here is a list of companies that we have confirmed will report during the week of Oct 7 - Oct 10¹.

BMO = Before The Market Open, AMC = After Market Close

Aditi Samajpati contributed to this article.

¹Some of the companies listed in the earnings calendar may not be in the Zacks Rank universe.