US earnings preview: 5 Dow Jones members release results

1:24 PM January 26, 2021

One of the busiest weeks during Q4 2020 Wall Street earnings season has begun. Among today's highlights investors can find earnings reports from 5 Dow Jones members, representing almost 16% of index' weight. 4 companies - Verizon, 3M, American Express and Johnson & Johnson - will report ahead of today's opening bell on Wall Street while Microsoft will publish results after the session closes.

Before market open

Shares of Verizon Communications (VZ.US) has gained 0.5% in 2021 so far. The company is expected to report EPS of $1.17 (3.2% YoY higher) and revenue of $34.42 billion (-1% YoY lower). US Telecom is seen reporting flat or slightly lower year-over-year subscriber growth amid negative impact coronavirus pandemic has on customers' switching activity. Investors will look for comments on the 5G network and 2021 guidance.

Shares of 3M (MMM.US) dropped 2.5% so far this year. 3M is expected to report EPS of $2.15 (0.4% YoY higher) and revenue of $8.4 billion (3.5% YoY higher). Revenue in the Health Care segment is expected to remain strong thanks to a boost from mask sales. Transportation & Electronic revenue is seen slightly lower year-over-year. Analysts expect 3M to announce a strong margin guidance for the first quarter of 2021.

American Express (AXP.US) is trading 0.5% year-to-date higher. The company is expected to report EPS of $1.29 (36.6% YoY lower) and revenue of $9.4 billion (17.3% YoY lower). US payments company has been hit by the coronavirus pandemic, especially when it comes to travel and entertainment spending. Figures for these two categories will be on watch today.

Johnson & Johnson (JNJ.US) closed 5.5% year-to-date higher yesterday. Company is expected to report EPS of $1.83 (21.4% YoY higher) and revenue of $21.66 billion (4.4% YoY higher). Johnson & Johnson may use earnings release to announce results from late-stage coronavirus vaccine trials. This as well as guidance for 2021 is likely to steal the show during today's announcement.

After market close

Microsoft (MSFT.US) gained 3.2% so far this year. Company is expected to report EPS of $1.64 (9.5% YoY higher) and a record quarterly revenue of $40.2 billion (8.9% YoY higher). While growth has slowed compared to recent years, Microsoft continues to show decent dynamics in its cloud computing segment. As this is surfacing to be the most important division for the company, figures relating to it will be on watch. Median estimate points to an almost 16% year-over-year increase in Intelligent Cloud segment sales.

US30 may experience larger moves today as 6 companies making up almost 16% of the index weight will report results. The index has bounced off the support zone at 30,660 pts, marked by the 38.2% retracement of the early-year upward move. Should companies deliver positive earnings surprises, US30 may be set to break above the short-term downward trendline. In such a scenario, way towards recent highs will be left open. Source: xStation5

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