Discover Financial, FedEx, Oracle, Alcoa and Goldman Sachs are part of Zacks
CHICAGO, June 17, 2013
CHICAGO, June 17, 2013 /PRNewswire/ --Zacks.com releases the list of
companies likely to issue earnings surprises. This week's list includes
Discover Financial (NYSE:DFS-Free Report), FedEx (NYSE:FDX-Free Report),
Oracle (Nasdaq:ORCL-Free Report), Alcoa (NYSE:AA-Free Report) and Goldman
Sachs (NYSE:GS-Free Report).
To see more earnings analysis, visit http://at.zacks.com/?id=3207.
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Looking Ahead to Q2 Earnings Season
The market's focus is justifiably on the Fed this week given the buzz
surrounding the 'Taper' talk. I don't expect a categorical statement out of
the FOMC on Wednesday, but it would not be unreasonable to expect Bernanke to
provide more clarity on his thinking on the QE question in the post-meeting
press conference that day.
The Fed will no doubt be the big subject this week, but we are getting close
to the start of the Q2 earnings season as well. In fact, Q2 earnings season
will actually get underway this week with the earning release from Discover
Financial (NYSE:DFS-Free Report) on Monday, followed by reports from such
bellwethers as FedEx (NYSE:FDX-Free Report) on Wednesday and Oracle
(Nasdaq:ORCL-Free Report) on Thursday.
Alcoa (NYSE:AA-Free Report) typically gets credited for kicking off each
earnings season, but we don't count Alcoa's report as the 'official' start;
Discover will be the first 2013 Q2 earnings report in our tally. In fairness
to Alcoa, investors start taking notice of the earnings season only with their
release, which for Q2 will happen on July 8th.
As has been the case at the start of recent quarterly earnings cycles,
expectations for Q2 earnings season remain quite low. Total earnings for
companies in the S&P 500 are expected to be up only +0.6% from the same period
last year. This is down from +3.9% growth expected in the quarter in early
April. Total earnings were up +2.3% in Q1, but the expectation ahead of the
start of the Q1 earnings season was for earnings growth to be in the negative
Finance wasn't a big driver of aggregate earnings growth for the S&P 500 in
Q1, but takes back the lead role in Q2, with total earnings for the sector
expected to be up +19.4% and estimates steadily going up. Earnings for the
sector were up +7.7% in Q1, which came after many quarters of double-digit
All industries within the Finance sector like the major banks, regional banks,
brokers and insurers are expected to have positive growth. But the growth
picture is particularly notable for the brokerage and investment management
industry such as Goldman Sachs (NYSE:GS-Free Report), with total earnings for
the group expected to be up +39.6% in Q2 after the +2.6% gain in Q1.
Unlike Finance, the earnings picture for the Technology sector, the largest
sector in the S&P 500, remains fairly weak. Total earnings for the sector are
expected to be down -8.7% from the same period last year, which follows the
-3.8% earnings decline in Q1.
Earnings estimates for the sector have been steadily coming down over recent
weeks, with the current -8.7% decline down from expected decline of -3.1% in
mid-April. The weakest group within the Technology sector is the PC makers,
with total earnings for the Computers and Office Equipment industry expected
to be down -16.1% in Q2 after the -14.1% decline in Q1. Semiconductors and
electronics are other Tech industries with negative earnings growth in the
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