Tickers in this Article: GOOG, JPM, BAC, GE, AA
Earnings season officially begins on April 12, with Alcoa (NYSE:AA) leading off as usual. Investors should expect the season to start fast and heavy after that with many large cap companies reporting the first week. These and other reports will provide clues as to the strength and direction of the economy, and may validate the huge market rally over the last year.

IN PICTURES: 20 Tools For Building Up Your Portfolio

Google It
Google (Nasdaq:GOOG) reports on April 15, 2010, and analysts are expecting the company to report $6.57 in earnings and revenues of $4.93 billion. Both numbers represent strong year-over-year growth, as Google emerges from the recession relatively unscathed.

Investors should look in detail at the report to see whether advertising by important industry verticals has returned to levels seen before the recession, which will be seen as a sign of confidence by the business community. Google should also be swamped with questions about its high profile war with China over censorship of its search engine.

Imagination at Work
Another company to watch is General Electric (NYSE:GE), which reports on April 16. General Electric is expected to report 16 cents per share in earnings, down from the 26 cents per share reported in the same quarter last year. The company has beaten earnings estimates for four straight quarters, and may do it again. Since General Electric owns a host of industrial businesses, these should be watched for signs of order growth.

Bank On It
On the financial side, JP Morgan (NYSE:JPM) reports earnings on April 14, followed by Bank of America (NYSE:BAC) on April 16.

Analysts expect JP Morgan and Bank of America to report earnings per share of 64 cents and 9 cents, respectively.

Look for investors to grill the managements of JP Morgan and Bank of America on credit trends in its large consumer loan portfolios as key indicators of the strength of the consumer and the economy. There is also concern on rising delinquencies in the Commercial Real Estate) (CRE) sector, and much attention will be focused on these loan portfolios as well.

Also, populist rage will be focused on compensation trends at JP Morgan and Bank of America, and investors should expect some negative headlines to accompany the earnings release.

The Bottom Line
Earnings season begins soon, and although following these reports can be exhausting for investors, they will provide pertinent data on the strength of economic growth and consumer spending. This data will be the fodder of endless commentary by pundits to either justify the stock market rally, or try to tear it down. (For some helpful tips, check out Strategies For Quarterly Earnings Season.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

comments powered by Disqus

Trading Center