A Pair of Potential Earnings Casualties

Not all large-cap stocks are created equal, and even through there are a lot of reasons to be optimistic about this earnings season, some companies are headed for trouble this quarter. Let’s cover a couple of those stocks now:

JPMorgan Chase

JPMorgan (NYSE:JPM) is one of the most well-known financial holding companies in the world. The company is broken into several segments including, Investment Bank, Commercial Banking, Treasury & Securities Services, Asset Management, Retail Financial Services and Card Services. Through its various segments and services, JPMorgan has its hands on every aspect of financial management you can think of and operates worldwide.

I have a major distrust of the financial sector, and JPM is not excluded from that distrust. The company is looking at a 2.5% sales drop and 5% earnings drop for the quarter. That’s far better than the 94.5% drop expected for the sector, but definitely not a sign that you should put your money into the company this earnings season. Many analysts seem to agree, with four of them revising their earnings estimates for the company downwards over the last 30 days. JPM will report earnings Thursday. I’m not going out on a limb by saying I don’t expect the report to garner much positive attention.

Hasbro Inc.

Hasbro�(NASDAQ:HAS) is a legendary American success story and a toy company beloved by nearly five generations of children. Some of the company’s iconic toys include G.I. Joe and Transformers action figures and Mr. Potato Head, but this year hasn’t brought joy to investors. HAS shares have lost more than 20% of their value this year.

Unfortunately, Hasbro’s recent performance doesn’t bode well for its upcoming earnings announcement Monday. On the surface, analysts’ estimates for HAS appear pretty solid. They are calling for 21.1% earnings and 10.9% sales growth. But I am concerned about what lies underneath the surface of this stock. For the past two quarters, Hasbro has failed to meet analysts’ estimates, and they weren’t slight misses — more like 15% to 29% misses. Considering the stock has already had trouble this year and growth is below industry average, I foresee another earnings miss for HAS.