Ahead of Earnings: CMG, MCD, HON, GE

April 18, 2012, 11:00 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Our Trading Reports in this Article:

• CMG
• MCD
• HON
• GE

There will be no shortage of trading opportunities as the week rolls on with the high volume of earnings reports due out. Implementing adequate risk controls when making bets ahead of these earnings reports should be an integral part of any trading strategy. Here are four stocks for traders to keep an eye on later this week.

Grilling the Competition

After the market close on Thursday, Chipotle Mexican Grill (NYSE: CMG) will check in with the results of its Q1. The consensus among analysts is that the casual dining chain will announce a 32.2% surge in EPS on a 23.8% spike in sales when compared to the prior year quarter.

The company has been very effective in driving additional traffic to its existing stores as it reported an 11.1% increase in comparable store sales in Q4. Chipotle has had to deal with food inflation, but has been largely successful in passing on the extra cost to consumers in the form of menu price increases. Shares of CMG have jumped 27.9% so far this year.

Another fast food retailer that will be releasing its earnings later this week is McDonald’s (NYSE: MCD). Wall Street is predicting that Friday the company will post a 7.0% improvement in EPS on a 7.0% advance in total revenue versus the year-ago quarter. McDonald’s shareholders have seen the stock tick down by 3.7% year-to-date.

Well-Oiled Machines

On Friday morning, Honeywell (NYSE: HON) is expected to announce its Q1 earnings numbers. Analysts are estimating that the company will come in with EPS growth of 12.5% on a 5.6% increase in sales when compared to Honeywell’s Q1 in 2011.

Last quarter, the company’s aerospace segment revenue was up by 8% over the prior year quarter as sales to commercial OEM customers were able to offset lower military sales and government services. Honeywell’s automation and control solutions group also posted respectable growth driven by recent acquisitions. The company’s stock price has gained 7.7% in 2012.

Another industrial goods manufacturer that is set to report its quarterly results on Friday is General Electric (NYSE: GE). Analysts are expecting the company to report EPS of $0.33 which would be in line with what GE posted in the prior year quarter. Total sales are expected to decline by 9.9% on a year-over-year basis. Shares of GE have risen 5.5% since the beginning of the year.

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