24/7 Wall St. is probably not alone in noticing that there were very few earnings warnings issued by the major companies that dictate market trends going into the end of June. That and some recovering economic trends and lower commodity prices have all contributed to a feeling that the woes of Europe, as well as the woes of Japan and the tightening of China, are not quite as strong of headwinds that will easily kill the bull market. Earnings season is approaching fast and we are soon to get a direct reporting bias from many of the country’s top corporations. Whatever the reporting trend comes out to, the rest of the summer’s stock market bias is about to be set by this wave of earnings reports.

We have identified 15 of the first corporate earnings reports due in the next two weeks that are likely to set the broad tone for the market this summer. These top 15 companies are as follows: Alcoa, Inc. (NYSE: AA), Yum! Brands Inc (NYSE: YUM), J.P. Morgan Chase & Co. (NYSE: JPM), Google Inc. (NASDAQ: GOOG), Citigroup Inc (NYSE: C), Amazon.com Inc. (NASDAQ: AMZN), AMR Corporation (NYSE: AMR), Autonation Inc (NYSE: AN), International Business Machines Corporation (NYSE: IBM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Coca Cola Co. (NYSE: KO), Johnson & Johnson (NYSE: JNJ), UnitedHealth Group Inc (NYSE: UNH), Intel Corporation (NASDAQ: INTC), and EMC Corp (NYSE: EMC).

We looked at the current Thomson Reuters expectations for the past quarter and the coming quarter, and we have also added in data on prices and on recent trading ranges.  More importantly, we have shown why these matter, what other companies or sectors they matter to, and added in additional color of what to look for on each.

Alcoa, Inc. (NYSE: AA) will kick earnings off for the summer on Monday, July 11 and Thomson Reuters has estimates of $0.35 EPS and $6.32 billion in revenues; next quarter estimates are $0.36 EPS and $6.36 billion in revenues. At $16.23, the market cap is roughly $17 billion and the 52-week trading range is $9.92 to $18.47. Alcoa has a dual purpose for investors. It can influence all of the metals and industrials, but some even try to interpolate “The Alcoa Effect” to a broader earnings season.  Just because it is a DJIA component does not give it that right, but that is how some try to think. It did actually make our value screen of basic materials stocks in recent days. The obvious area to watch is future orders and pricing. We are not overly concerned with what it says about last quarter, but whether or not it comments about business picking up now for the second half. The look-back question is whether higher alumina prices have offset weakness out of Japan, India and China.

Yum! Brands Inc (NYSE: YUM) reports on Wednesday, July 13, and Thomson Reuters has estimates of $0.61 EPS and $2.70 billion in revenues; next quarter estimates are $0.84 EPS and $3.03 billion in revenues. At $56.30, the market cap is roughly $26 billion and the 52-week trading range is $38.43 to $57.04.YUM! is no McDonald’s, but the investment community is likely to treat many aspects of the fast-food and casual dining segment based upon its report. What will matter is whether or not it offers a clearer picture for the casual dining trends domestically. It will also act as a bellwether for the Chinese food and entertainment spending markets, where it is the go-to stock to make that determination.  YUM! is also still working through PR issues at the Taco Bell level, even if the ‘problems’ were not exactly correct.  Yum! could still be a top dividend rival of McDonald’s in the years ahead.

J.P. Morgan Chase & Co. (NYSE: JPM) reports on Thursday, July 14, and Thomson Reuters has estimates of $1.22 EPS and $25.22 billion in revenues; next quarter estimates are $1.19 EPS and $24.65 billion in revenues.  At  $40.56, the market cap is roughly $161 billion and the 52-week trading range is $35.55 to $48.54.  Chase Bank is not the bank of the U.S., but it is “The Bank of the Privileged.”  Investors will still try to use this as a benchmark “for the rest of us.”  We continue to expect the individual credit metrics in credit card delinquencies and also in charge-offs to show improvement and we expect this bank to have been a beneficiary of all of the recent consumer credit improvements.  The wild card is going to be the aftermath of Dodd-Frank and the higher imposed reserves that will be implemented after this year.  It could be a serious drag to that continued earnings recovery.  Another hint we will be looking for is a “raised guidance” of a sort as far as its dividend is concerned.

Google Inc. (NASDAQ: GOOG) did not confirm its earnings report until just this week.  It is set to report earnings on Thursday, July 14.  The online search giant, and online conglomerate, has estimates of $7.86 EPS and $6.53 billion in revenues; next quarter estimates are $8.30 EPS and $6.85 billion in revenues.  As a reminder, those sales are ex-TAC, or ex-Traffic acquisition cost revenues.  This matters for anything internet-related.  It also matters for anything related to off-line advertising as well.  It was just a short period ago that Google was tanking and heading well under $500.00, but a recent analyst call reiterated its same $800 price target.

Citigroup Inc (NYSE: C) is due to report on Friday, July 15, and this will likely reset the tone for the rest of the banks.  Thomson Reuters has estimates of $0.97 EPS and $19.94 billion in revenues; next quarter estimates are $1.01 EPS and $19.89 billion in revenues.  At $41.90, the market cap is roughly $122 billion and the 52-week trading range is $36.30 to $51.50.  Citi is going to prelude BofA this year and we are looking at Citi as the bank that will be used for the rest of the sector.  With Vikram Pandit having given a stated book value of $58.50 and a tangible book value of $46.90, shares are currently under $42.00.  Just like with JPMorgan, we expect to hear about ongoing credit metric improvements.

Amazon.com Inc. (NASDAQ: AMZN) is due on Monday, July 18. Thomson Reuters has estimates of $0.35 EPS and $9.36 billion in revenues; next quarter estimates are $0.49 EPS and $10.31 billion in revenues.  At  $214.40 today, the market cap is roughly $97 billion and the 52-week trading range is $105.80 to $214.45.  Amazon may have tax issues in states, but the reality is that consumers buy items when there is tax and when there is not.  We now use Amazon for the proxy for online and offline consumer spending because this offers a live reality in what would be a price-match environment.  This can have ramifications far and wide in retail.  On a more specific note, we have been amazed at how the investing community has accepted that Amazon’s major margin shrinkage has been without any real challenge to the stock.  If investors cheer Amazon for one more quarter of earnings, it will be the next mega-cap stock as we have opined before.

AMR Corporation (NYSE: AMR) is also tentatively due on Monday, July 18 and Thomson Reuters has estimates of a loss of -$0.58 EPS and $6.17 billion in revenues; next quarter estimates are effectively $0.00 EPS and $6.41 billion in revenues.  At  $5.29, the market cap is roughly $1.8 billion and the 52-week trading range is $5.25 to $8.98.  AMR is going to be the first of the legacy carriers with earnings by our first look at the forward calendars so far. It is also being driven by its international segment, a trend to watch.  AMR has now reported that June capacity was up 1.8% and traffic was up 1.3% with an 86.3% load factor. It boarded 7.7 million passengers and International traffic rose while domestic traffic actually decreased. The airline had nearly $6 billion in restricted cash as of its last earnings report and the company’s prior guidance offered was: “AMR expects its full-year mainline capacity to be 1.4 percentage points lower than originally planned or up 2.2 percent versus 2010, with domestic capacity down 0.5 percent and international capacity up 6.2 percent compared to 2010 levels. On a consolidated basis, full-year capacity will be up 2.8 percent.”

Autonation Inc (NYSE: AN) is due Monday, July 18, and it has estimates of $0.47 EPS and $3.45 billion in revenues; next quarter estimates are $0.47 EPS and $3.51 billion in revenues.  At  $37.82 today, the market cap is roughly $5.6 billion and the 52-week trading range is $18.08 to $37.86.  This is going to have to act as a prelude to Ford, GM, Toyota, and other auto sales figures for both new cars and used cars.  The data has already shown some improvement in June, perhaps even better than what we would have expected when considering other slowdown data.

International Business Machines Corporation (NYSE: IBM) is due on Monday, July 18 and it has estimates of $3.03 EPS and $25.35 billion in revenues; next quarter estimates are $3.18 EPS and $25.65 billion in revenues.  At about $177.50 today, the market cap is roughly $214 billion and the 52-week trading range is $122.17 to $177.77.  Keep in mind that this $177.77 high was just hit on Wednesday.  IBM may matter less to the boots on the ground, but investors have to understand that its $170+ stock price influences the Dow Jones Industrial Average more than any other stock by a considerable amount due to the DJIA’s price-weighted index status rather than being tied to market caps.  IBM, of course, impacts many stocks as other tech giants do, but it is this dominance of the DJIA that makes the most difference.  We always look at the backlog, listed as $142 billion last quarter, but the key we are looking for is whether or not IBM still communicates that $20.00 EPS long-term goal or not.

Microsoft Corp (NASDAQ: MSFT) has estimates of $0.58 EPS and $17.27 billion in revenues; next quarter estimates are $0.67 EPS and $17.43 billion in revenues.  At  $26.33 today, the market cap is roughly $222 billion and the 52-week trading range is $23.32 to $29.46.  Steve Ballmer has many things going for the company, and a whole history of drags at the same time.  We will be looking to see how this Skype integration is coming, how that fits in with the Facebook integration, how the Windows 8 launch is expected to go, more on Windows 7 sales, and more.  Microsoft no longer moves the entire technology sector as it used to, but it is a DJIA component and it still influences how the world treats the enterprise sales.  Oracle’s lack of a run with its earnings report gives this an implied “news neutral bias” if there is such a thing.  This will mark year-end with its June annual calendar and we look forward to hear of the 2012 expected growth of about 7% in earnings and just over 6% in revenues can be lived up to.

Apple Inc (NASDAQ: AAPL) is due to report earnings on Tuesday, July 19. It has estimates of $5.69 EPS and $24.67 billion in revenues; next quarter estimates are $6.35 EPS and $27.63 billion in revenues.  At about $351.00, the market cap is roughly $325 billion and the 52-week trading range is $235.56 to $364.90.  Apple may move Apple-component part companies directly, but Apple indirectly sets the tone for all of tech now even if its stock has stagnated before the most recent recovery.  It is the champion of technology now and it sets the tone.  The ongoing discussions about the health of Steve Jobs are still present but seem to have taken a back-seat for the time being.  By the earnings date, we should have far more detail over Apple’s newest iPhone and perhaps on when we should really expect the third version of the iPad.  Apple’s chart was starting to break, but it has recovered and Apple remains one of those stocks that is still under-owned today and one which investors will buy if they can get in at cheaper prices. As a reminder, Apple is no longer as dominant in the NASDAQ-100 as it was in previous quarters.

Coca Cola Co. (NYSE: KO) reports earnings on Tuesday, July 19 and it has estimates of $1.16 EPS and $12.39 billion in revenues; next quarter estimates are $1.04 EPS and $12.09 billion in revenues.  At $68.53, the market cap is roughly $157 billion and the 52-week trading range is $50.02 to $68.79.  Coca-Cola remains “the other food and beverage play” and will have a spill-over for Pepsico.  No pun intended.  Shares have recently come back to multi-year highs even if they are still well short of the 1998 peak.  This remains a bellwether for defensive stock investors, particularly now that the economy is not such that soft-drink and bottled water makers feel as though they fall into the luxury goods category.  Unless something changes between now and July 19, defensive investors have used any weakness as an opportunity to buy the key defensive stocks even if the news was not even considered marginal.

Johnson & Johnson (NYSE: JNJ) is due with its earnings on Tuesday, July 19 and the medical and consumer products giant has estimates of $1.23 EPS and $16.25 billion in revenues; next quarter estimates are $1.22 EPS and $16.0 billion in revenues.  At $67.48 today, the market cap is roughly $185 billion and the 52-week trading range is $56.86 to $67.75.  J&J remain under all-time highs even shares are close to multi-year highs.  What is so interesting is that the public has not yet gotten past the recalls and quality control issues but investors have voted that the issue will fade in the sunset.  The exit from drug-coated stents may be a line-item now since shares are right close to highs.

UnitedHealth Group Inc (NYSE: UNH) is due with its health-insurance earnings on Tuesday, July 19.  The company has estimates of $0.91 EPS and $25.22 billion in revenues; next quarter estimates are $1.10 EPS and $25.38 billion in revenues.  At  $53.00 today, the market cap is roughly $57 billion and the 52-week trading range is $28.29 to $53.27.  UnitedHealth may not move the market, but it sure can play a huge impact on other health insurance plan providers like Aetna, Humana, and others.  We have seen increased dividends and increased share buybacks from the company and it raised guidance after its last earnings while simultaneously acknowledging the industry challenges.  There are still a few niche players and smaller players that can be acquired as well.

Intel Corporation (NASDAQ: INTC) reports earnings on Tuesday, July 19.  The processor and chip-giant has estimates of $0.51 EPS and $12.82 billion in revenues; next quarter estimates are $0.59 EPS and $13.49 billion in revenues.  At $22.75, the market cap is roughly $120 billion and the 52-week trading range is $17.60 to $23.96.  The post-PC world has been a bit overstated if you look at Intel’s most recent guidance still maintained double-digit growth.  Its dividend trends have been helping as well.  The company has close to 80% market share of PCs and it is very likely to set the tone for semiconductor-related companies even though some smaller chip stocks will have reported the week ahead.  One area we continue to look for data is in the post_PC era as processors start to be included in more and more devices that are used by humans.  This represents a far larger frontier than tablet PCs, even though Intel is soon to be a force in that market as well. Intel will also influence how the remaining chip and PC-related companies are going to be treated throughout earnings season this summer.

EMC Corp (NYSE: EMC) is set to report on Wednesday, July 20.  The storage products giant is currently expected to report $0.34 EPS and $4.73 billion in revenues; next quarter estimates are $0.0.37 EPS and $4.91 billion in revenues.  At  $27.78  today, the market cap is roughly $57 billion and the 52-week trading range is $17.90 to $28.73.  EMC Corporation remains the top bogey for the world of storage, and its VMware tracking stock (85% held more or less) dominates the virtualization market with its earnings the night before.  We cannot help but wonder if EMC will finally get around to declaring a dividend or not.  The list of storage and even cloud-related companies that this can impact is numerous.

As a reminder, these estimates may change in the coming days and it is still possible that we will hear some extra pre-earnings data from some of these major companies.  The idea is to identify these trends more than to give earnings estimates this far out.

On Friday, July 22, we will also get reports from Caterpillar, G.E., McDonald’s, and Honeywell.  Those companies all matter for broad earnings analysis and for the broad economy.  Our exclusion of those names is not for the rank of importance or market caps.  They are not included because our take is that the tone and the real direction of earnings season will have already been set by the time those companies report earnings.

There are many other earnings which of course matter to the markets and to their sectors.  This list includes the company which will have set the tone for earnings season by Wednesday, July 20 for the subsequent six-weeks thereafter.  Many of these names have been performing well.  It almost seems impossible to believe that the recovery is real if there were going to be last-minute waves and waves of earnings warnings from major companies.  If any of these companies are in deep trouble over earnings, it is almost certain that they have already figured it out by now.

JON C. OGG

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