Earnings Reports Up Next
The three major stock indexes are bouncing between positive and negative today, showing relatively small fluctuations. =They're now in positive territory after being in the red for over an hour.
Everyone's looking to earnings reports to get an idea of companies' outlooks. This week, IBM and Google have been bright spots for the Nasdaq, after reporting solid results. On the other hand, shares of firms like Ebay have been hit hard after warning that its holiday sales would be much softer this year.
Here's a few companies planning to report earnings next week: Boeing, American Express, Apple, Microsoft and Xerox.
Although third-quarter earnings won't entirely reflect the current economic situation, most analysts and investors are most interested in the outlooks for the fourth quarter, and trying to get an indication of what to expect in 2009.
AT&T will also report earnings next week, the first of the major telecom companies to give an indication of their expectations for the coming months. I checked in with Todd Rosenbluth, equity analyst with Standard & Poor's covering the telecom industry, to get his take on what to expect in the sector.
Wireless services continue to be a driver for AT&T, Verizon and Sprint Nextel. Consumers may cut back on buying the more-expensive smart phones for a while, but cellphones will still be purchased, he said.
The fourth quarter "used to be a big quarter, but as new phones and devices come out in other periods, we see them become less dependent," he said.
He also expects to see people dropping traditional land-line phones to save money--meaning they will be more reliant on wireless services. And if two-year contracts are due to be renewed, the key will making sure customers want to stay.
"Carriers are becoming a little more aggressive in subsidizing phones" and moving customers to newer, faster networks, he said. "That's going to impact profitability until we see growth outweighing costs."
AT&T shares were down 12 cents to $25.35, Verizon shares were down 9 cents to 27.32, and Sprint Nextel shares were down 14 cents to 3.19.
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