Tomorrow we get three big earnings reports to start the New Year and the fourth quarter reporting season, which roughly reflects company performance from October - December 2017 (varies by company).

Monsanto (MON)

Materials - Chemicals | Reports January 4, before the open.

The Estimize consensus calls for EPS of $0.42, four cents higher than the Wall Street consensus, and suggesting YoY growth of 81%. Revenues are also expected to beat, with the Estimize community looking for $2.88B vs. the Street’s $2.72B. 

What to Watch: Solid growth expectations appear to be back for Monsanto after a hiccup in FQ3 2017. Analysts on Estimize increased their EPS estimates for the quarter reporting tomorrow by 75% in the last 3 months - from $0.24 on October 4, to the current expectation of $0.42. Demand for crop-yield enhancing products such as Roundup Ready Xtend Crop System and specialized herbicides like XtendiMax has remained strong. Last quarter’s growth was lead by the Seeds and Genomics segment due to the adoption of newer soybean and cotton technologies. While the company pointed out adoption for their latest corn hybrids were picking up, sales of corn seed and traits were a weak spot in 2017. The $66B buyout from Bayer should close early on this year.

Walgreens Boots Alliance (WBA)

Consumer Staples - Food & Staples Retailing | Reports January 4, before the open.

The Estimize consensus calls for EPS of $1.30, three cents higher than the Wall Street consensus, with revenues nearly in-line at $30.3B.

What to Watch: All eyes will be on sales at Walgreens Retail Pharmacy USA division tomorrow. Last quarter pharmacy sales increased nearly 13% YoY due to higher prescription volumes. Despite the fact that comparable pharmacy sales increased 5.6%, they were negatively impacted by reimbursement pressure and generics which will likely resurface again in this report. While the Rite Aid deal announced in September will have no impact on this quarter’s results, investors will be looking for an update on Walgreen’s agreement to purchase 1,932 Rite Aid stores over the next 3 years, an arrangement that should be beneficial to both company’s bottom lines.

Sonic (SONC)

Consumer Discretionary - Hotels, Restaurants & Leisure | Reports January 4, after the close.

The Estimize consensus calls for EPS of $0.26, one cent higher than the Wall Street consensus, with revenues nearly in-line at $106M.

What to Watch: Sonic’s expectations have come down considerably in the last quarter, with EPS estimates retreating 10%, and revenues decreasing by 3% over that time, likely due to poor results reported for FQ4 2017. During that quarter same store sales slipped 3.3%, the fifth consecutive quarterly decline, due to weak customer traffic which fell by over 3%  due to an increasingly competitive environment where McDonald’s saw traffic increase by 2.1%. Unfavorable weather and ill-received menu additions and summer promotions also played a large role. The company’s 2018 guidance calls for same store sales in the range of 0% - 2%, which could mean a slight improvement in tomorrow’s numbers.