Earnings releases are coming fast and furious now, as the biggest names in the stock market have been announcing their results for the last quarter of 2011. Tomorrow, three more members of the Dow Jones Industrials (INDEX: ^DJI ) will put their investors to the test by announcing how they finished out the year. Good news could give the stock market a bigger push up, but bad news could reverse the trend and send stocks back downward.
Let's take a closer look at the companies that are issuing earnings reports tomorrow.
Caterpillar (NYSE: CAT )
The construction and mining machinery company has had the wind at its back for some time now, with strength in emerging markets boosting its fortunes. The company has seen growth in earnings per share in six straight quarters, and analysts expect that streak to extend to seven tomorrow, with estimates of $1.73 per share marking an 18% increase from the year-ago quarter.
Investors have strong expectations about Caterpillar sustaining fast growth for years to come, so tomorrow's earnings announcement will be a key measure of whether the company has the potential to go the distance. I'm confident that if high commodities prices keep mining activity up, Caterpillar can make its numbers -- and I've already made a CAPScall on the stock to beat the market over the next five years.
3M (NYSE: MMM )
Unfortunately, 3M can't claim the same consistency in earnings growth as Caterpillar. In its previous quarter, it saw a slight decline in year-over-year earnings, missing analyst expectations badly. Still, current estimates have 3M reversing that trend, with $1.31 per share in expected earnings topping last year's levels by $0.03.
3M has always been an innovative company, but as Fool analyst Amanda Buchanan recently pointed out, a lot of those innovations are getting a bit long in the tooth. But the company is working hard to ramp up its creativity to come up with new products without sacrificing corporate efficiency and profits. In addition, the company's recent announcement that it would purchase Avery Dennison's (NYSE: AVY ) office and consumer products division indicates a willingness to use its muscle to dominate lucrative market niches. Regardless of what it announces tomorrow, 3M has plenty of long-term potential.
AT&T (NYSE: T )
AT&T has a tough road ahead of it. Its failed merger with T-Mobile leaves it in an awkward spot as it tries to consolidate and figure out how to go forward on its own. Fool analyst Dan Radovsky has heard speculation that it might try to buy out DISH Network or other telecom players in order to acquire more wireless spectrum for its 4G LTE network.
Tomorrow, the company is expected to see a big drop in earnings compared to last year's levels, with estimates of $0.43 per share. But the bigger question for AT&T remains strategic, and investors will be eagerly awaiting to see how management fleshes out the company's course for the future.
Stay in the know
As we've seen several times over the past couple of weeks, when Dow stocks make earnings announcements that surprise analysts, the entire market can move abruptly. So be sure to stay tuned when these companies announce their latest results so that you don't get blindsided.
At the same time, though, be sure to keep your perspective. One quarter's earnings may be enough to move a stock for a day, but it takes years' worth of results in order to make a stock a true blockbuster. If you have the chops to invest for the long haul, you'll want to check out the Motley Fool's latest special report, where you'll discover the names of three stocks that could help you retire rich. It's free but only available for a limited time, so click here and read it today.