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Pop the Champagne -- Earnings Season Is Here

By Travis Hoium - Apr 8, 2013 at 3:33PM

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Alcoa kicks off earnings season after the market closes.

For investors, the seasons aren't marked by the changing leaves or first snowfall; earnings season is kicked off every three months by aluminum maker Alcoa (AA). Today, after the closing bell, Alcoa opens first-quarter earnings season, and investors are approaching it with skepticism today. Stocks dropped in early trading, but as of 3:15 p.m. EDT the Dow Jones Industrial Average (^DJI) is up a meager six points, while the S&P 500 (^GSPC -4.04%) has gained 0.29%.

Alcoa is always the first major company to report quarterly earnings, and it's viewed as a bellwether for the rest of the season. Analysts are expecting Alcoa to report $5.89 billion in revenue and an $0.08 per-share profit. An earnings beat would have investors in a good mood tomorrow, and a miss would have them singing the blues. Beyond the numbers, be on the lookout for management's comments about future demand, because investors are always looking for clues about what the next earnings season will look like.

Johnson & Johnson (JNJ -1.86%) dropped 1.5% to lead the decliners today. The stock was downgraded by analysts at JPMorgan Chase -- though, ironically, they also increased their price target from $77 to $83. Analysts can have a short-term impact on stocks, but the market won't care about this rating for long, and I would pay more attention to Johnson & Johnson's earnings release next week than I would to this rating.

Coca-Cola (KO -6.96%) jumped 1.7% today after Wells Fargo said energy drinks would help grow the beverage industry overall. Growth of the beverage industry is great, but Coca-Cola has had a hard time gaining significant market share, so it may miss out on some of that upside. Next week, Coke will release first-quarter earnings, so we'll learn more about beverage growth and what Coke is going to do about the energy craze.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$3,923.68 (-4.04%) $-165.17
Alcoa Inc. Stock Quote
Alcoa Inc.
AA
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$175.50 (-1.86%) $-3.32
The Coca-Cola Company Stock Quote
The Coca-Cola Company
KO
$61.20 (-6.96%) $-4.58

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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