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Earnings Expectations: Will GE And IBM Disappoint?

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Earnings Expectations: Will GE And IBM Disappoint?
  • Fourth-quarter earnings so far have offered little hope for a bottom to the falling markets.
  • Results from old-school sector leaders General Electric Company (NYSE: GE) and International Business Machines Corp. (NYSE: IBM) are among the week's highlights.
  • However, consensus forecasts call for declining earnings from both of them.

With investors and traders looking for any good news to signal the retreating markets have found a bottom, there has been little to hang their hopes on in the fourth-quarter earnings reports thus far.

And it doesn't look like old-school sector leaders General Electric Company or International Business Machines Corp. will have much to offer on that score when they report this week, judging by the expectations of Wall Street analysts. Not unless one or both can come up with a big positive surprise.

Below is a quick look at what is expected from the reports of GE and IBM. That is followed by a quick peek at some of the week's other most anticipated earnings.

GE

Wall Street's fourth-quarter forecast for GE calls for earnings per share (EPS) to have retreated from $0.56 in the year ago period to $0.49. Some 40 Estimize respondents predict EPS will be a bit higher at $0.51. Note that GE's extensive restructuring may complicate year-over-year comparisons.

Revenue missed consensus estimates in the previous period. This time, Estimize is looking for about $35.91 billion, essentially in line with the $35.99 billion Wall Street expects. Both estimates are about 14 percent lower than year-ago revenue. The company is scheduled to report before Friday's opening bell.

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IBM

When this tech giant shares its results late Tuesday, the Estimize consensus forecast is that it will show a profit of $4.78 per share for the fourth quarter. That would be down from EPS of $5.81 in the same period of last year. Wall Street is looking for a few pennies more, though the consensus estimate has ticked down recently.

The company's revenue for the three months that ended in December will be $22.11 billion, or down more than 8 percent year-over-year, if the 121 survey respondents are correct. For the full year, Wall Street sees revenue down nearly 12 percent to $81.76 billion, as well as EPS less than 10 percent lower to $2.23.

And Others

Investors may have to look elsewhere for more encouraging signs. At least some growth on the bottom line is coming in this week's reports from Bank of America, Delta Air Lines, Starbucks and Verizon Communications, if Wall Street expectations come true.

However, American Express and Netflix will need to post big numbers to exceed the earnings declines forecast by the analysts at large.

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