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Spencer Platt The first earnings season of 2023 picks up significant steam in the final full week of January. A broad sampling of companies is set to report, including high-profile representatives of the transportation, defense, consumer staples, tech, telecommunications and energy sectors. Headliners for the week ahead include Tesla (NASDAQ:TSLA) and Microsoft (NASDAQ:MSFT). Those key reports will be joined by results from payment processors Visa (V) and Mastercard (MA), energy sector giants Baker Hughes (BKR) and Chevron (CVX), as well as semiconductor stalwarts ASML Holding (ASML), Lam Research (LRCX) and Intel (INTC). Below is a curated list of earnings results expected in the week of January 23 through 27: Monday, January 23 Baker Hughes (BKR) Baker Hughes (BKR) is set to post its fourth quarter earnings update before the bell on Monday. Shares of the Houston-based energy and technology company rose sharply in 2022 and has added a double-digit gain early in 2023. To start the year, the company announced it had won a contract to supply carbon dioxide compression equipment to Petronas’ Kasawari carbon capture and storage project offshore Malaysia, projected to be the world’s largest offshore CCS facility. In other news, the company’s proposed acquisition of Altus Intervention is under scrutiny in the U.K., with the country’s Competition and Markets Authority advising that the deal could be anti-competitive. Consensus EPS Estimates: $0.40 Consensus Revenue Estimates: $6.07B Earnings Insight: Bakers Hughes has beaten EPS estimates in 2 of the past 8 quarters, exceeding revenue expectation thrice in that span. Tuesday, January 24 Microsoft (MSFT) Microsoft (MSFT) is expected to post its fiscal second quarter earnings results after the bell on Tuesday. Shares of the software giant fell over 20% in 2022, retreating to levels last seen in early 2021. Nonetheless, Seeking Alpha surveys reflect a Strong Buy consensus among sell-side analysts. According to Wedbush Securities, cloud growth via the firm’s Azure unit was “better than feared” in Q4 and likely to show strength into 2023. “While Azure growth has clearly decelerated in the field we believe MSFT should be able to exceed its 37% Azure growth target (constant currency) in the December quarter,” equity analyst Dan Ives said ahead of the report. Ives added that talks to integrate OpenAI’s ChatGPT into properties like its Bing search engine could be a “gamechanger” to be unveiled in 2023. Morgan Stanley analyst Keith Weiss also lauded the reported talks between the two companies. Meanwhile, Microsoft has been vocal about efforts to tighten its belt in 2023. In a letter to employees in the week ahead of the results, CEO Satya Nadella said the company aims to lay off 10,000 employees around the world and take a $1.2B charge related to the job cuts for the reported quarter. Consensus EPS Estimates: $2.34 Consensus Revenue Estimates: $53.19B Earnings Insight: Microsoft (MSFT) has beaten EPS and revenue estimates in 7 of the past 8 quarters. Defense sector spotlight: Raytheon Technologies (RTX) and Lockheed Martin (LMT) are both due to report on Tuesday, followed by reports from Boeing (BA) Textron (TXT), and General Dynamics (GD) on Wednesday. Northrop Grumman (NOC) and L3 Harris Technologies (LHX) are expected to report as well, rounding out the week on Friday. The defense industry outperformed in 2022 amid geopolitical tension embodied by both the war in Ukraine and saber rattling in the South China sea. However, the deal that allowed lawmaker Kevin McCarthy to become Speaker of the House of Representatives has signaled a potential cutback in defense spending. Additionally, Goldman Sachs recently downgraded a number of defense names on both spending deceleration and valuation concerns. Elsewhere, L3Harris (LHX) agreed to purchase Aerojet Rocketdyne (AJRD) in December. This came after Lockheed Martin’s (LMT) previous bid for the propulsive system manufacturer was terminated amid an FTC lawsuit filed on antitrust grounds. Also reporting: General Electric (GE), Danaher (DHR), Johnson & Johnson (JNJ), 3M (MMM), Halliburton (HAL), DR Horton (DHI), Texas Instruments (TXN), Union Pacific (UNP), and Canadian National Railway (CNI) Wednesday, January 25 Tesla (TSLA) Tesla (TSLA) will be among the most closely watched reports of the week, with its results due out after the bell on Wednesday. Shares of the Austin-based EV manufacturer recorded a stark decline in 2022, falling over 60% as CEO Elon Musk’s Twitter purchase proved a significant distraction and financial burden, according to analysts. While shares have roared back in the early part of 2023, rising 20% in the year’s first 20 days, the stock remains a far cry from its highs of late 2021. So far in 2023, the automaker has moved to slash prices in both China and North America, which analysts have attributed to both tax and demand considerations. The company has also delayed the expansion of its Shanghai Gigafactory after pulling back production in China around the turn of the year. Analysts remain broadly bullish on the stock with a consensus Buy rating reflected in Seeking Alpha surveys. However, the average price target has fallen to about $198 after a slate of target cuts to start 2023, $100 lower than the average target prior to the automaker’s October earnings release. Revenue expectations have been revised downward 17 times in the 90 days prior to the earnings release, according to Seeking Alpha data. Consensus EPS Estimates: $1.14 Consensus Revenue Estimates: $24.62B Earnings Insight: Tesla has exceeded EPS and revenue expectations in 7 of the past 8 quarters. AT&T (NYSE:T) AT&T (T) is due to post its fourth quarter earnings update prior to the opening bell on Wednesday, joined by Verizon (VZ). The consensus sell-side rating on T turned to Buy late in 2022, according to Seeking Alpha surveys. To start 2023, Wells Fargo named the stock a top pick. In December, the telecom giant announced a joint venture, known as Gigapower LLC, with BlackRock (BLK) Alternatives to provide a fiber network to internet service providers and other businesses across the U.S. CFO Pascal Desroches indicated the partnership is part of the company’s planned expansion beyond its current footprint. Consensus EPS Estimates: $0.57 Consensus Revenue Estimates: $31.42B Earnings Insight: AT&T has beaten EPS estimates in 8 consecutive quarters, missing revenue expectations only twice in that span. Also reporting: ASML Holding (ASML), IBM (IBM), Abbott Labs (ABT), Group 1 Automotive (GPI), Kimberly Clark (KMB), Lam Research (LRCX), Wynn resorts (WYNN), Las Vegas Sands (LVS), Levi Strauss (LEVI), Hess Corporation (HES), Packaging Corporation of America (PKG), Wolfspeed (WOLF), Knight-Swift Transportation (KNX), Crown Castle (CCI), CSX Corporation (CSX), and Norfolk Southern (NSC) Thursday, January 26 Intel (INTC) Intel (INTC) is due to post its fourth quarter earnings results after the bell on Thursday. While shares of the California-based semiconductor company fell nearly 50% in 2022, the stock has rebounded sharply to start 2023. Since the start of the year, shares have marked a double-digit gain. In the 90 days prior to the earnings results, EPS estimates have been revised downward 30 times while revenue expectations have been reeled in 24 times. The consensus rating on the stock among analysts remains a Hold. In terms of corporate news, China’s antitrust regulator has reportedly put a pause on the chip company’s proposed $4.5B acquisition of Tower Semiconductor (TSEM). Intel had previously forecast the deal to close in the first quarter of 2023. Consensus EPS Estimates: $0.20 Consensus Revenue Estimates: $14.51B Earnings Insight: Intel has beaten EPS and revenue expectations in 6 of the past 8 quarters. Southwest Airlines (LUV) Southwest Airlines will headline the week’s earnings reports for the airline sector, alongside American Airlines (AAL), which pre-announced its results weeks prior to the official report. For LUV, investors will be looking for the financial consequences of the canceled and delayed scores of flights around the Christmas holiday. The company also set to face Senate hearings and high reimbursement costs as a result. The carrier also saw an elevated level of cancellations amid recent FAA outages, according to FlightTracker. Executives indicated a number of operational changes will be pursued in 2023 following the high-profile snafu. Bank of America analyst Andrew Didora views these changes positively, advising clients that the current share price presents a bargain. After meeting with executives, he reiterated his Buy rating on the stock about two weeks prior to the results, in line with the Street consensus. Additionally, the airline reached a new agreement with major unions ahead of the results. Consensus EPS Estimates: $-0.01 Consensus Revenue Estimates: $6.18B Earnings Insight: Southwest Airlines (LUV) has beaten EPS estimates in 6 of the past 8 quarters and revenue expectations in 5 of the past 8. Payment processor sector spotlight Both Mastercard (MA) and Visa (V) are expected to report prior to the opening bell on Thursday. Both stocks outperformed the broader market in 2022, seeing a boost from year-end holiday shopping and continuing positive trends into 2023. Both stocks have been favorites among analysts and hedge funds as well. Recently, Credit Suisse named Visa to its “top of the crop” list to start 2023 and Goldman Sachs data highlighted Mastercard’s (MA) prominent place in hedge fund portfolios. On a company-specific basis, Mastercard (MA) announced a $9B buyback program to close 2022 and expanded cross-border payment capabilities. Meanwhile, Visa (V) also benefited from an update to allow cross-border remittances for the international money transfer service, Xoom. The service is a partnership backed by both Visa (V) and Paypal (PYPL). According to the Wall Street Journal, both payment processors are the subject of an FTC probe on competition in payment processing. Bloomberg has also reported that a group of congressional lawmakers are seeking to break up the duopoly. Mastercard (MA) was ordered to provide competing networks with customer account information necessary to process debit payments by the FTC in late December. Also reporting: Alaska Airlines (ALK), American Airlines (AAL), Comcast Corporation (CMCSA), Nucor Corporation (NUE), Archer-Daniels Midland (ADM), Dow Chemical (DOW), Tractor Supply Company (TSCO), Rockwell Automation (ROK), Nokia (NOK), and STMicroelectronics (STM) Friday, January 27 Chevron (CVX) Prior to the opening bell on Friday, Chevron (CVX) will post its fourth quarter earnings results. Shares of the California-based energy giant rose sharply in 2022, racking up big profits alongside much of the oil and gas industry. Shortly before the earnings announcement, Bank of America downgraded the stock and called it “a victim of its own success”. Mizuho also downgraded CVX on similar valuation concerns. Still, even with these cautious turns, the consensus sell-side rating remains a Buy, according to Seeking Alpha surveys. Consensus EPS Estimates: $4.47 Consensus Revenue Estimates: $53.90B Earnings Insight: Chevron has beaten EPS estimates in 4 of the past 8 quarters, exceeding revenue expectations in 6 of those reports. Also reporting: American Express (AXP), Colgate Palmolive (CL), Church & Dwight (CHD), and Autoliv (ALV)

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