These stocks are set to see big moves Friday

Share

The performance of a pair of large-cap industrial names will be the focus of morning trading on Friday, as a strong start in earnings season gathers momentum.

General Electric Co. and Honeywell International Inc. are both due to release third-quarter financial statements before the opening bell. From both, investors will be looking for strong earnings growth – in the case of GE, to help turn around a rough year for its stock, while Honeywell is looking to keep its streak alive.

Punished for its heavy exposure to the oil-field services sector, GE shares hit a four-and-a-half-year low as recently as last Friday, having declined by 25 per cent year to date.

GE's earnings forecasts for next year have declined considerably, more than offsetting any investor goodwill generated from the company's recent quarterly earnings beats.

That could again be the story on Friday, if new CEO John Flannery fails to impress investors and analysts on the postearnings conference call.

Meanwhile, Honeywell's shares have shot up by 24 per cent so far this year, on the basis of its strength in the aerospace business. The company has a strong record of narrowly beating the Street's estimates.

The other big name scheduled to announce third-quarter earnings before the opening bell on Friday is consumer products powerhouse Procter & Gamble Co. Its profits are forecast to rise by about 4 per cent over the same quarter in 2016. The company's shares are one of the best performing consumer staples stocks within the S&P 500 index this year.

With about 15 per cent of the index's companies having reported, earnings season has been a decent one so far. While the expected rise in total third-quarter profits of about 4.3 per cent, year over year, is well short of the double-digits posted in the last two quarters, companies have mostly been surpassing expectations, according to Thomson Reuters. So far, total profits are tracking at 4 per cent higher than estimates at the start of earnings season.