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Walgreen, ConAgra, Lennar, Paychex and Alcoa are part of Zacks Earnings Preview:

   Walgreen, ConAgra, Lennar, Paychex and Alcoa are part of Zacks Earnings
                                   Preview:

PR Newswire

CHICAGO, June 24, 2013

CHICAGO, June 24, 2013 /PRNewswire/ --Zacks.com releases the list of
companies likely to issue earnings surprises. This week's list includes
Walgreen (NYSE:WAG-Free Report), ConAgra (NYSE:CAG-Free Report), Lennar
(NYSE:LEN-Free Report), Paychex (Nasdaq:PAYX-Free Report) and Alcoa
(NYSE:AA-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

To see more earnings analysis, visit http://at.zacks.com/?id=3207.

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Post-Fed, but Pre-Earnings

The market was looking for clarity from the Fed about the future of the QE
program. But it didn't like the surprisingly explicit timeline from Chairman
Bernanke, and has been in a somewhat downbeat mood ever since.

The after-effects of the Bernanke announcement and the resultant impact on
benchmark interest rates will no doubt remain the big issues for the market
this week as well, but we are also getting close to the start of the Q2
earnings season. In fact, the Q2 earnings season actually got underway last
week.

It hasn't been a very inspiring start thus far, but all of these companies
have been grappling with lingering issues affecting their businesses for
awhile and their Q2 reports didn't indicate that they had finally turned the
corner. We will see if this week's reports from the likes of Walgreen
(NYSE:WAG-Free Report), ConAgra (NYSE:CAG-Free Report), Lennar (NYSE:LEN-Free
Report), Paychex (Nasdaq:PAYX-Free Report) and others will show a more
promising side of the earnings picture. But we will likely have to wait a bit
longer for the reporting season to get really high gear -- Alcoa's
(NYSE:AA-Free Report) report is coming on July 8^th.

As has become customary at the start of recent quarterly earnings cycles,
expectations for the Q2 earnings season remain quite low. A major driver of
these low expectations is company guidance during the Q1 earnings season,
which was overwhelmingly on the negative side. Total earnings for companies in
the S&P 500 are expected to be up only +0.5% from the same period last year.

This is sharply down from +3.9% growth expected in the quarter in early April.
Total earnings were up +2.3% in Q1, but growth was expected to be in negative
territory at this stage before that reporting season.

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 +19.6% and estimates for the group are steadily going up.
Earnings for the sector were up +7.7% in Q1, which came after many quarters of
double-digit growth.

All the industries within the Finance sector -- 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 players, 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 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 quarter.

Expectations for full-years 2013 and 2014 have come down far less than what we
have seen for Q2 estimates. In fact, it is reasonable to assume that given the
improving outlook for the Finance sector, aggregate estimates will start
rising after a very long time in the coming weeks.

The +6.1% growth in total earnings this year, down from +6.8% in early April,
reflects a material ramp up in the second half of the year that is then
expected to carry into 2014. Combining the actual results for Q1 with
estimates for Q2 gives us +1.5% year-over-year growth in total earnings in the
first half of 2013. But total earnings are expected to be up +9.4% in the
second half of the year and a further +11.5% in full-year 2014.

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.

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