By Emily Bary
Prepare for an earnings onslaught in the week ahead, headlined by Tesla Inc., Boeing Co. and a flurry of big tech names.
A quarter of the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.64% is set to report results in the coming week, along with a dozen Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.68% components, more than a third of the index.
Following this rush of numbers, investors will have a better sense of whether the S&P 500 will likely remain in an earnings recession, which occurs if the index sees average earnings fall for at least two straight quarters.
Read: 5 prominent U.S. companies are most at fault for the earnings recession
Tesla /zigman2/quotes/203558040/composite TSLA +0.31% looks likely to see year-over-year revenue decline in its first quarter and its third consecutive unprofitable quarter, despite selling a record number of cars. Investors will be looking for positive free cash flow, a forecast for profit or any signs that Tesla is on a path to profitability, or at least that demand is still strong for Tesla’s cars.
After Tesla announced its third-quarter delivery total, formerly bullish JMP Group analysts downgraded the stock to “hold” and said it was “the first time since covering the stock that we found ourselves wondering whether demand growth for (Tesla’s) cars might be leveling off.”
Chief Executive Elon Musk will attempt to counter that notion while attempting to get production started in China and prepping for the launch of the Model Y. An RBC analyst believes Tesla might move up that mid-SUV — which is expected to start production late next year — to help jolt growth.
Full preview: Tesla is about to show investors if it’s back on the road to profitability
Boeing /zigman2/quotes/208579720/composite BA -1.19% , which was the biggest contributor to the S&P 500’s earnings decline in the second quarter, will have to answer questions about reports on Friday saying it misled regulators about 737 Max safety long before two deadly crashes. While Boeing is expected to be back in the black this time around, it hasn’t escaped the Max controversy: The aircraft manufacturer is expected to report a 40% drop in profit and a 22% decline in sales.
Here are other key themes to watch for in the week ahead.
Two tech stalwarts of the Dow are set to report next week: Microsoft Corp. /zigman2/quotes/207732364/composite MSFT +1.60% on Wednesday and Intel Corp. /zigman2/quotes/203649727/composite INTC -0.04% on Thursday.
Microsoft is expected to ride the wave of its Azure cloud-computing business to another big quarter of growth. Analysts model 11% overall growth for the company, led by a 22% increase in the intelligent cloud segment. Intel’s report will show how customers are dealing with the potential for tariffs to affect PCs in December and whether they’ve been moving up orders to get ahead of that deadline. Such a move could impact Intel in a number of ways, according to Bernstein analyst Toni Sacconaghi, who’s interested to learn if supply constraints have returned and whether the company will issue a conservative forecast for the holiday quarter.
Rounding out the Dow
Caterpillar Inc.’s /zigman2/quotes/203434128/composite CAT -0.43% Wednesday morning report will give a glimpse into what William Blair analyst Lawrence De Maria calls a “plummeting” market for construction equipment in North America. “It is one of the first capital-goods companies to report, and as a bellwether, the company typically sets the tone for the season, which is unlikely to be positive,” he wrote.