Google earnings; Sears in court; Panasonic and China

Posted at 3:41 AM, Feb 04, 2019
and last updated 2019-02-04 05:41:15-05

1. Google earnings: Alphabet, the parent company of Google, will report results for the final three months of 2018 after the closing bell.

Analysts are expecting sales growth of 20% over the previous year. That would require a strong performance from Google’s massive advertising business.

Google suffered a series of PR snafus at the end of last year that helped push its stock lower. Congress grilled its CEO over data privacy, employees walked out over sexual harassment scandals and it disclosed a security bug.

Shares in Google are now trading just above their level from a year ago.

2. The fate of Sears: The moment of truth has arrived for Sears, once the United States’ largest and most important retailer.

US Bankruptcy Court Judge Robert Drain is due to hold a hearing starting Monday on Sears’ plan to sell its assets, including 425 stores, to its chairman Eddie Lampert. It is the only chance to save the jobs of up to 45,000 employees of the Sears and Kmart chains and keep the 133-year old retailer in business.

Lampert’s rescue bid is opposed by creditors, including vendors and landlords, who argue that the company should be shut down and liquidated.

Sears hopes to have a decision approving the sale by February 8, and that it hopes to close the sale by February 19.

3. China troubles: Panasonic is being hurt by an economic slowdown in China and friction caused by a trade war between Washington and Beijing.

The Japanese electronics company cut its operating profit outlook for the current fiscal year to 385 billion yen ($3.5 billion) from 425 billion yen ($3.8 billion). It also reported a sharp drop in third quarter operating profit.

Panasonic said that some of its key businesses have been hurt by weaker demand in China. It said sales from its industrial business unit decreased “due mainly to trade friction between US and China.”

It’s not the first victim: Apple previously warned about weaker iPhone sales in China. Tire maker Goodyear and FedEx have also said that softness in China was hurting their profits.

4. Global market overview: US stock futures were flat.

European markets opened mixed, following the trend set in Asia. Markets in mainland China are closed this week for a holiday.

The Dow Jones industrial average closed up 0.3% on Friday. The S&P 500 added 0.1% and the Nasdaq shed 0.3%.

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5. Earnings and economics: Clorox and Sysco will release earnings before the open.

Shares in Ryanair dropped 4% after the airline reported a €19.6 million ($22.4 million) net loss for the holiday quarter.

The discount airline also announced a change to its corporate structure. Veteran boss Michael O’Leary will become group CEO, and each of the company’s four airlines will have its own chief executive.

6. Coming this week:
Monday — Alphabet and Ryanair earnings; markets in mainland China are closed all week
Tuesday — The State of the Union address; Disney, 21st Century Fox, Snap and Electronic Arts earnings
Wednesday — GM, Chipotle, Toyota, Humana, Eli Lilly, The New York Times and Spotify earnings; the Cayman Alternative Investment Summit begins
Thursday — Twitter, Yum! Brands, Kellogg, Philip Morris International, MetLife, Mattel, T-Mobile, News Corp and Dunkin Brands earnings
Friday — Hasbro, Phillips 66 earnings