The fourth-quarter earnings season is kicking into high gear this week and investors’ major focus will be on corporate earnings to give direction to U.S. stocks, especially as the year started with two weeks of losses. The two biggest U.S. automakers, General Motors Corp. and Ford Motor Co., are scheduled to report their financial results this week. GM, announcing Wednesday morning, is expected to earn 92 cents per share, considerably below prior-year income of $1.47 per share. Ford will announce its earnings Thursday morning and analysts forecast a profit of 28 cents per share, down from 31 cents per share, a year earlier. In the financial sector, giants J.P. Morgan Chase & Co., Citigroup Inc. and Bank of America Corp. are also on the earnings board this week. Analysts expect Citigroup to post Tuesday a profit of $1.02 per share, compared with 96 cents per share, last year. J.P. Morgan Chase is reporting on Wednesday morning, with earnings seen to drop to 68 cents per share, from a year-ago figure of 89 cents per share. Bank of America will announce its results on Tuesday. The technology sector will see this week earnings announcements from leading companies including IBM Corp., Yahoo! Inc., eBay Inc., Qualcomm Inc. and Advanced Micro Devices Inc.

Apart from earnings, the U.S. Consumer Price Index for December, which is due out on Wednesday, will also draw investors’ attention, as it will throw some light on inflation at the retail price level.

Sun Microsystems, Inc. (SUNW: chart) said after the bell Thursday that it reversed course to a quarterly profit from a year-ago loss, as the network computing company improved profit margins, cut expenses and continued to generate positive cash flow from operations. Santa Clara, California-based Sun posted net income of $19 million, or 1 cent per share, for its fiscal 2005 second quarter, bouncing back from a net loss of $125 million, or 4 cents per share, for the same quarter last year. Excluding items, earnings totaled $28 million, or a penny a share, for the quarter ended December 26, compared with a prior-year loss before items of $99 million, or 3 cents a share. The earnings matched Wall Street’s consensus estimate. However, sales in the quarter slipped 1.6% to $2.84 billion from $2.89 billion, for the 2004 equivalent. Analysts had been expecting revenue of $2.94 billion. For the first six months of 2005, the company narrowed its loss to $128 million, or 4 cents per share, from $411 million, or 13 cents per share, last year. Sales rose to $5.47 billion from $5.42 billion.

Sun shares inched down 3 cents to $4.58 at market close Thursday. The stock dipped 3.93% to $4.40 in after-market trade.

General Motors Corporation (GM: chart) warned Thursday that it expects this year earnings to drop from 2004 levels, citing weak performance at its finance arm and higher health-care costs. The Detroit, Michigan-based world’s top automaker said it sees 2005 profit in the range of $4 to $5 per share, excluding items. Analysts predicted earnings of $4.78 per share, on average. For its fiscal 2004 full year, GM repeated that it expects to earn between $6 and $6.50 per share, excluding items.

The stock slid 2.79% on Thursday to $37.32. GM shares gained 3 cents to $37.35 in the extended session.

Marshall & Ilsley Corporation (MI: chart) reported Thursday fourth-quarter net income of $173.8 million, or 76 cents per share, a 23% jump compared with income of $141.1 million, or 62 cents per share, for the 2003 equivalent. Excluding items, the Milwaukee, Wisconsin-based banking firm posted a profit of 70 cents per share, meeting analysts’ expectations. The company attributed the results to strong net interest income and non-interest revenue, which increased 7% to $296.4 million and 42% to $435.2 million, respectively.

Company shares closed Thursday at $42.10, down 11 cents, or 0.26%. The stock edged up 2 cents to $42.12 in after-hours trading.

MGIC Investment Corporation (MTG: chart) of Milwaukee, Wisconsin, announced Thursday higher quarterly profits, aided by improved credit loss performance and lower expenses. The mortgage insurance firm turned in net earnings of $134.5 million, or $1.39 per share, for its fourth quarter, up 29% from $103.9 million, or $1.05 per share, generated a year ago. Quarterly revenues eased 3.4% from last year to $403.1 million, hurt by a decline in net premiums. The company said higher net income from joint ventures, which rose to $33.4 million from $21.9 million, also helped lift its results.

The stock gained 73 cents to close Thursday at $66.73.

Cree, Inc. (CREE: chart) posted Thursday quarterly income that surged 92% from a year earlier, driven by strong revenue growth. The Durham, North Carolina-based developer of semiconductor materials and devices, including LED lights, rolled out a net profit of $25 million, or 32 cents per share, for its fiscal second quarter, against a profit of $13 million, or 17 cents per share, for the 2004 corresponding quarter. Revenue for the quarter advanced 34% to $97.5 million. Gross margin, however, declined sequentially due to increased LED costs, lower-than-expected December LED shipments and lower LED average sales prices.

Looking ahead, Cree forecast income of 24 cents to 27 cents per share for the third quarter, which is below the mean analysts’ estimate of 32 cents per share.

Cree shares edged up 94 cents to $35.07 at market close Thursday. The stock plummeted 22.10% to $27.32 in after-market trade.