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Earnings Previews: MA, CME, BG with ICE and CPO

 

As we head into the later stages of the fourth quarter earnings season, the number of market moving names remaining on the calendar is beginning to dwindle. However, there are still a few names that will garner significant attention and will provide the market with a broader view regarding the health of the economy. In today’s column, we highlight a few large cap stocks across varying sectors that are expected to report earnings on Feb

MA Has Charged Past Consensus Estimates Recently

Before the market opens on Thurs, Feb. 4, credit card and financial transaction processor MasterCard (NYSE: MA) is set to report its Q4 results. Analysts are projecting it to report EPS of $2.47 on revenue of $1.3 bln. Over the past two quarters, MA has blown out the consensus earnings estimates (by $0.54 and $0.25) and has also modestly beat on the top-line. Its growth has been impressive as well, with profit expanding 41% year-over-year last quarter, followed by 27% growth in 2Q09. Consequently, the stock has been on a tear, soaring ~55% since last July. For this quarter, there are a few potential catalysts that could lead to another huge beat – which it probably needs to keep shares moving higher. These include: 1). Improving retail sales couple with easy year-over-year comparisons, 2). Favorable FX due to a weak dollar, and 3). Pricing initiatives to drive better volume. From a technical perspective, shares of MA are currently holding at support around the $250 mark after pulling back from 52-week high levels achieved in mid-January. For a more complete look at MA’s technical attributes, please click here to view our free trading report.

Improving Volume Key For CME

On Feb. 2, CME Group (Nasdaq: CME) announced that in January, volume average 11.2 million contracts per day, which is up 19% from last year. This follows a 13% increase in volume for December and a 5% bump in November. Clearly, the needle is pointing upward for CME’s transaction volume, a positive sign for the futures exchange. With that in mind, the company should be in good position to at least meet consensus of $3.43/share in earnings and revenue of $666.4 million, while also providing a more bullish outlook for Q1. On the conference call, an item of significant interest will center on potential regulatory hurdles proposed by the Obama Administration for the derivatives markets. On one hand, the uncertainty regarding what the exact outcome will be creates an overhang on CME and other exchanges such as Intercontinental Exchange (NYSE: ICE). However, on the other hand, this could be a positive factor for these companies as more transaction orders go their way, rather to large banks and other trading institutions. For traders interested in entering a trade in CME, we strongly suggest reviewing our free trading report first to view key entry/exit levels on the stock.

M&A Speculation A Hot Topic For Bunge (BG)

Agriculture giant Bunge (NYSE: BG) has been making headlines lately as it has been active in the M&A market. Specifically, on Jan. 27 it announced that it will sell its Brazilian fertilizer nutrients assets to Vale for $3.8 billion in cash. On the same day, speculation swirled that it will soon be making an offer for Corn Products (NYSE: CPO). BG’s CEO confirmed the interest, but stated that the aforementioned sale of the fertilizer business was not a precursor to an offer for CPO. Regardless, the major M&A activity and speculation is going to be the topic of interest on the Q4 conference call. In terms of what is expected for its financial performance, the Street is projecting EPS of $0.86 on sales of $10.8 billion. If CPO’s and Archer Daniels Midland’s (NYSE: ADM) results are any indication, BG should have little trouble topping analysts’ estimates. Shares of BG have tumbled lowered over the past few weeks, sliding from $70 to about $60. In light of this share pull-back, a better-than-expected report should provide a boost for the stock..

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