Investing July 13, 2009, 10:02AM EST

Earnings: What to Watch For This Week

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Bank of America (BAC)

Why it's important: Bank of America may help investors determine where the economy is headed since so much of its business depends on consumers and housing. The bank has about 55 million consumer and small business customers, making it vulnerable to delinquencies and defaults, yet also ready to thrive when the economy recovers. But the bank has internal issues, especially since CEO Ken Lewis' management ability has been questioned following BofA's acquisition of Merrill Lynch. The bank has received $45 billion in bailout funds, but it's not known when it will repay the government.

When it will report: Friday, July 17.

What the experts say: On average, analysts polled by Thomson Reuters expect Bank of America to post a profit of 24¢ per share on revenue of $32.35 billion. In the same quarter of last year, the company recorded a profit of 72¢ per share on revenue of $20.32 billion, before the Merrill acquisition.

You'll know the economy is improving if: There's any sign of improvement in credit. It's a given Bank of America will see more debtors fail to make payments. The question is whether the rise in defaulting loans is starting to moderate, especially among credit cards and mortgages.

You'll know the economy is not improving if: Loan defaults accelerate at a much faster pace than expected.

General Electric (GE)

Why it's important: GE is one of the world's biggest companies. It has 4 million shareholders. Millions of people have GE microwaves in their kitchens. If you flew on a plane recently, chances are good the engines were made by GE. Your favorite NBC television show comes to you courtesy of GE, which owns the network. Your doctor may use GE software to store your medical records. Some of the electricity for your home may come from churning GE windmills. And that light bulb in your bedroom lamp may very well be a GE bulb.

When it will report: Friday, July 17.

What the experts say: On average, analysts polled by Thomson Reuters expect GE to post a profit of 23¢ per share on revenue of $42.3 billion. In the same quarter of last year, the company recorded a profit of 54¢ per share on revenue of $45.31 billion.

You'll know the economy is improving if: GE's aircraft engine sales hold up. Big planemakers like Boeing (BA) are seeing orders slump, but GE is still doing a brisk business fixing engines that it already sold. If new engine sales are steady, that could show the downturn in global aviation might not be as bad as feared.

You'll know the economy is not improving if: GE's commercial real estate business keeps tanking. GE owns a lot of shopping centers, manufacturing plants, and office buildings through its GE Capital finance division. Many of those are empty as companies and retailers cut back due to the recession.