The first quarter earnings season of 2014 is well on its way, with several bellwethers reporting both hits and misses. On the commodity producer front, Alcoa (AA) kicked off the season. AA reported revenues of $5.45 billion, below the expected $5.56 billion, and earnings of $0.09 per share, which managed to beat analyst estimates of $0.05. Agribusiness giant Monsanto (MON) managed to beat both EPS and revenue estimates, posting quarterly revenues of $5.83 billion and earnings of $3.15 per share [for more commodity news and analysis subscribe to our free newsletter].
Over the next few weeks, several noteworthy commodity producers will be releasing their quarterly results. It will be important to not only analyze the quarterly results, but also to pay close attention to each company’s outlook.
- Dow Chemical (DOW): The basic materials firm, which has its hands in a number of different sections of the commodity world, will be reporting earnings on April 23. Analysts are expecting EPS of $0.71 and revenues of $14.7 billion. In its last quarter, DOW posted earnings of $0.56 per share and revenues of $14.4 billion; both figures beat expectations.
- Potash Corp. of Saskatchewan, Inc. (POT): The world’s largest potash producer will report its results on April 24. Revenues are expected to come in at $1.5 billion and earnings at $0.35 per share. In its Q4 report, potash missed EPS estimates, with the figure coming in at $0.32. The company did, however, post better-than-expected revenues of $1.4 billion.
- Newmont Mining (NEM): On April 24, Newmont Mining will unveil its earnings. Analysts have predicted EPS at $0.19 and revenues at $1.8 billion. In Q4, the company reported earnings of $0.81 per share, beating analyst estimates. Revenues also surpassed expectations, coming in at $2.2 billion [see Advanced Materials: The Next Frontier for Commodity Investors].
- Freeport McMoran (FCX): This copper miner will release its earnings on April 24. Revenues are expected to fall to $5.2 billion and earnings to fall to $0.54 per share. In its last quarter, FCX managed to beat EPS estimates at $0.84. Revenues, however, missed expectations, coming in lower at $5.9 billion.
- Caterpillar (CAT): This machinery giant will report its earnings on April 24. Analysts are looking for EPS of $1.23 with revenues coming in at $13.1 billion. In Q4, CAT managed to beat EPS and revenue estimates after missing four previous quarters. Earnings came in at $1.58 per share and revenues at $14.4 billion.
- Southern Copper Company (SCCO): SCCO, one of the biggest names in the copper world, will be reporting on Monday April 28. Analysts are pegging EPS at $0.44 with revenues hitting $1.5 billion. SCCO beat EPS estimates in its last quarter, with earnings coming in at $0.48 per share. Revenues were reported in-line with expectations at $1.5 billion.
- Suncor Energy Inc. (SU): This Canada-based firm will also report on April 28. Revenues are expected to come in at $10.5 billion and earnings at $0.91 per share. In its last quarter, SU gravely missed EPS estimates, with the figure coming in at $0.66. The company also missed revenue expectations, coming at $10.2 billion.
The Bottom Line
As always, an earnings report is a two-pronged release; the earnings and revenue numbers are only half of the equation. Forecasts and guidance can sometimes be the most important part of a report. A firm can surpass expectations only to watch its stock plummet on weak guidance. Likewise, a sour report can be salvaged with a strong forecast for the future. Traders and investors need to look at both sides of each report in order to properly digest and react to the announcements.
Disclosure: No positions at time of writing.