Many investors believe that the Dow Jones Industrial Average (^DJI 0.40%) has lost its standing as an important stock index. Its price-weighted methodology means that the Dow gives less weight to some of its gigacap components than to much smaller companies that just happen to have higher share prices.
Yet it's still a mark of distinction to be one of the 30 Dow stocks, and when these giants of their respective industries report their financial results, investors pay attention. Tuesday is an especially important day for the Dow, because five of its 30 stocks are expected to release their latest numbers. Here are all five and what investors expect from them right now.
1. 3M
Investors expect 3M (MMM 0.46%) to report its latest financial results on Tuesday morning before the opening bell. They're bracing for continued weakness, projecting that 3M will see sales drop nearly 10% year over year and earnings fall by more than 30% to $1.72 per share.
The primary challenge 3M faces is that conditions in the consumer electronics and retail industries haven't been as strong over the past year as they have historically. Moreover, efforts to restructure its business have encountered unexpected obstacles. Even if 3M's numbers remain discouraging, the company has to show signs of progress in overcoming those obstacles in order to restore confidence.
2. Dow
Not to be confused with the Dow Jones, Dow Inc. (DOW 1.51%) is set to report its quarterly results on Tuesday morning as well. Shareholders see the chemical company's earnings falling by more than two-thirds to $0.70 per share, as revenue sinks 28% from year-ago levels.
Having broken itself into multiple parts and spun off several businesses into separately traded stocks, Dow now handles commodity chemical products, including plastics, adhesives, and coatings. That makes Dow's business extremely cyclical, and so what it says about its performance could allow investors to draw broader conclusions about the state of the industrial economy.
3. Microsoft
Perhaps the most-watched earnings report Tuesday will come from Microsoft (MSFT 1.82%) after the market closes. The software giant should keep growing, with revenue projected to rise about 7% year over year and earnings posting low double-digit percentage gains.
Microsoft stock has already soared this year as its artificial intelligence strategy became clear. Unlike other tech giants, Microsoft's path to AI monetization is extremely clear. The more positive things Microsoft is able to say about its efforts on that front, the more likely the AI stock is to keep rising.
4. Verizon Communications
By contrast, investors aren't expecting much from Verizon Communications (VZ 1.17%) when it reports Tuesday morning. Indeed, what they're hoping is that the telecom giant won't give bad news on some new areas of controversy. Already, shareholders are bracing for Verizon to see revenue ease lower by between 1% and 2%, sending earnings down more than 10%.
In addition to the challenges of being in a capital-intensive industry in a macroeconomic environment that includes rising interest rates, Verizon has also faced reports that it might have liability linked to wireline infrastructure having lead-containing materials. Investors can expect more commentary on that front in the report, and what Verizon says could also have big impacts on other companies in telecom as well.
5. Visa
Lastly, Visa (V -0.23%) will likely report its latest financial results on Tuesday afternoon. Investors are looking for an 11% rise in revenue from year-ago levels, with earnings moving higher by between 6% and 7% year over year.
Visa is a great indicator of consumer spending activity. If Visa manages to see payment volume come in above what it has expected, then it would provide further evidence that consumers are holding strong. Indeed, strong enough numbers could finally persuade some people that a recession isn't necessarily inevitable.
