Zacks Earnings Preview: Wal-Mart, Nordstrom, Abercrombie & Fitch, Prudential
Financial and Express Scripts
CHICAGO, Feb. 25, 2013
CHICAGO, Feb. 25, 2013 /PRNewswire/ -- Zacks.com releases the list of
companies likely to issue earnings surprises. This week's list includes
Wal-Mart (NYSE:WMT), Nordstrom (NYSE:JWN), Abercrombie & Fitch (NYSE:ANF),
Prudential Financial (NYSE:PRU) and Express Scripts (Nasdaq:ESRX).
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Last Week of Earnings Season
The overall backdrop for the retail space has not been very favorable lately,
as we saw in the Wal-Mart (NYSE:WMT) results, with the payroll tax changes,
delayed tax refunds and higher gasoline prices impacting sales. This isn't a
concern with the high end of the retail space, but Wal-Mart's soft outlook for
this year is relevant to Target and other discounters. Guidance from Nordstrom
(NYSE:JWN) andAbercrombie & Fitch (NYSE:ANF) was also less than reassuring. It
will be interesting to see if those trends will show up in Macy's and Gap's
The reality of the Q4 earnings season is that it has turned out to be not as
bad as many of us suspected. Leaving aside anemic earnings growth, on most
other metrics the fourth quarter reporting season is quite good. Not only are
the ratio and magnitude of surprises better than the previous quarter and
comparable to the last many, but the tone of management guidance has also been
less worrisome than was the case in the third quarter reporting season.
Total earnings for the 445 S&P 500 companies that have come out with Q4
results, as of Friday February 22, are up +2% from the same period last year,
with 66.7% beating expectations with a strong median surprise of +3.4%.
Stripping out the unusual revenue growth atPrudential Financial (NYSE:PRU) and
Express Scripts (Nasdaq:ESRX), total revenues are up +1.2%, with 61.8% of the
companies beating revenue expectations, with a median revenue surprise of
Expectations for the coming quarters have started coming down, but they still
represent a meaningful improvement from what we saw in 2012. Total earnings
are expected to be down -3.7% in the first quarter, up +3.9% in the second
quarter, +7.1% in the third quarter and +13.5% in the fourth quarter of 2013.
For the full-years 2013 and 2014, total earnings are expected to be up +6.7%
in 2013 and 11.8% in 2014. The bottom-up 'EPS' estimates for the S&P 500
currently stand at $109.38 for 2013 and $122.28 for 2014 (Note: The Zacks
bottom-up estimates are lower than other data vendors because we account for
employee stock options, while others don't).
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