More DJIA Earnings Pressing (MO, MRK, PG, XOM)

We are over half-way through earnings season now, but we still have four DJIA components set to report earnings this week.  We’ve also provided a link here to see which targets are there in our own Dogs of the Dow targets if applicable.

On Wednesday, we have two more DJIA components posting earnings:

• Altria (NYSE: MO) will post  earnings for Big Tobacco.  First Call has estimates at $0.97 EPS and $9.19 Billion in revenues.  If it offers 2008 guidance, the estimates are $4.74 EPS on $39.6+ Billion in revenues. What we are most interested is this spin-off of Phillip Morris International.  This has been in the works for longer than we care to think about, but we literally be on the doorstep of the formal spin-off plan.  Also after the spin-off and after the remaining cases in Florida are quantified, we’ll also get to see what may end up being a huge share buyback.  We aren’t banking on a 100% certainty that we’ll these answers after tomorrow’s earnings, but these are perhaps the only real issues we care about.
• Merck (NYSE: MRK) is expected to show earnings also.  First Call has estimates pegged at $0.74 EPS on almost $6.3 Billion in revenues. As the problems that have risen are not ‘backward looking’ we haven’t seen estimate changes on Q4-2007.  But estimates have started coming down mildly for 2008 with consensus now at $3.37 EPS on $24.76 Billion in revenues.  This report is going to watched much harder than before because of the Vytorin problems that surfaced last week and since shares are down almost 20% in just over two-weeks.

On Thursday, we’ll see the mega-consumer products giant Proctor & Gamble (NYSE: PG) report earnings.  It is hard to imagine that it will be able to avoid making the comments about higher raw materials costs, although the company has managed its earnings rather well so far.  First Call has estimates at $0.97 EPS on roughly $21.25 Billion in revenues.  If the company follows suit with other big multi-nationals and offers 2008 guidance, those estimates are $3.49 EPS & $82.15 Billion in revenues for fiscal June-2008 and $3.92 EPS & $87.25 Billion in revenues for fiscal June-2009.

On Friday we get to see earnings from the most valuable company in the U.S. measured by market cap.  ExxonMobil Corp. (NYSE: XOM) is expected to post $1.95 EPS.  Revenues are not projected as commonplace as earnings but the estimate we saw was over $114 Billion.  The company does not usually offer guidance but it does discuss how higher oil prices affect its costs along with its revenues.  Estimates have risen ahead of earnings in recent weeks, although we’d caution that Exxon does not have any solid history of late in beating earnings despite our pain at the pump and all the price-fixing accusations from the public and from critics.

Jon C. Ogg
January 29, 2008