Zacks Earnings Preview: Alcoa, Oracle, FedEx, Discover Financial and Nike
CHICAGO, Dec. 17, 2012
CHICAGO, Dec. 17, 2012 /PRNewswire/ -- Zacks.com releases the list of
companies likely to issue earnings surprises. This week's list includes Alcoa
(NYSE:AA), Oracle (Nasdaq:ORCL), FedEx (NYSE:FDX), Discover Financial
(NYSE:DFS) andNike (NYSE:NKE).
To see more earnings analysis, visit http://at.zacks.com/?id=3207.
Every day, Zacks.com makes 4 stock picks available, free of charge. To see
them, go to http://at.zacks.com/?id=3567.
Q4 Earnings Season Gets Underway
We are still some days away from what is 'unofficially' considered the start
of the fourth earnings season when aluminum producer Alcoa (NYSE:AA) reports
results on January 8th. But we 'officially' count all companies that have
financial quarters ending in November as part of our fourth quarter results
As such, while taking nothing away from Alcoa's first-to-report status, we
will be counting Tech giant Oracle's (Nasdaq:ORCL) earnings report after the
close on Tuesday as the start of the fourth quarter reporting season. And
Oracle is not alone; we have a total of 45 companies reporting results this
week, including 16 S&P 500 members. Companies reporting results include FedEx
(NYSE:FDX) on Wednesday, and Discover Financial (NYSE:DFS) andNike (NYSE:NKE)
on Thursday. But in fairness to Alcoa, the reporting cycle each quarter really
gets going after it comes out with results.
Earnings expectations for the fourth quarter have been steadily coming down
over the last three months, but they still remain positive. At present, total
earnings for companies in the S&P 500 are expected to be up 1.2% from the same
period last year. This is a sharp drop from the roughly 7% earnings growth
rate that consensus expected just three months ago. That said, it is still a
better performance than what was expected in the third quarter just before the
start of that reporting cycle.
At this stage in the third quarter, total earnings were expected to be down
3.4% from the same period last year. Actual results came out a little better
than that, with total third quarter earnings just barely in positive territory
(up only 0.1%) on essentially flat revenues (down 0.5%). Excluding Finance,
total earnings in the third quarter were down 3.9%, while total ex-Finance
revenues were down 1.1%.
Even the once-mighty Tech sector had barely positive earnings growth in the
third quarter (up only 0.5%), while Finance and Construction were the only
sectors with double-digit earnings growth. In total, half of the 16 Zacks
sectors had negative earnings comparisons in the third quarter. In the fourth
quarter, a total of 9 sectors will have negative earnings growth, with Tech
sector earnings expected to be down 4.6% from the same period last year.
Basic Materials is expected to see 12.2% earnings growth in the fourth
quarter, which will reverse a negative earnings growth over the preceding four
quarters. Hard to envision such a material turnaround in an economically
sensitive sector, but it's mostly a function of easy comparisons for companies
in this group.
The market's focus will remain on the unresolved 'Fiscal Cliff' issue, but we
do have a number of top-tier economic reports on deck, including the November
Housing Starts report on Wednesday, Existing Home Sales on Thursday, and the
Personal Income & Outlays and Durable Goods reports on Friday.
Sheraz Mian is the Director of Research for Zacks.com.
About the Zacks Rank
Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are
the most powerful force impacting stock prices." Since inception in 1988, #1
Rank Stocks have generated an average annual return of +28%. During the
2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500
tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong
Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since
1988, Zacks Rank #5 stocks have significantly underperformed the S&P 500 (+3%
versus +10%). Thus, the Zacks Rank system allows investors to truly manage
portfolio trading effectively.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of
the industries and the stocks poised to outperform the market. Subscribe to
this free newsletter today by visiting http://at.zacks.com/?id=4988.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed
in 1978 by Len Zacks. As a PhD from MIT Len knew he could find patterns in
stock market data that would lead to superior investment results. Amongst his
many accomplishments was the formation of his proprietary stock picking
system; the Zacks Rank, which continues to outperform the market by nearly a 3
to 1 margin. The best way to unlock the profitable stock recommendations and
market insights of Zacks Investment Research is through our free daily email
newsletter; Profit from the Pros. In short, it's your steady flow of
Profitable ideas GUARANTEED to be worth your time! Register for your free
subscription to Profit from the Pros by going to http://at.zacks.com/?id=3568.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities
(including a broker-dealer and an investment adviser), which may engage in
transactions involving the foregoing securities for the clients of such
Visit http://www.zacks.com/performance for information about the performance
numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors
should always research companies and securities before making any investments.
Nothing herein should be construed as an offer or solicitation to buy or sell
Contact: Sheraz Mian
SOURCE Zacks Investment Research, Inc.
Press spacebar to pause and continue. Press esc to stop.