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Wal-Mart, Macy's, Kohl's, Cisco and Deere are part of Zacks Earnings Preview:



Wal-Mart, Macy's, Kohl's, Cisco and Deere are part of Zacks Earnings Preview:

PR Newswire

CHICAGO, Aug. 12, 2013

CHICAGO, Aug. 12, 2013 /PRNewswire/ -- Zacks.com releases the list of
companies likely to issue earnings surprises. This week's list includes
Wal-Mart (NYSE:WMT-Free Report), Macy's (NYSE:M-Free Report), Kohl's
(NYSE:KSS-Free Report), Cisco (Nasdaq:CSCO-Free Report) and Deere
(NYSE:DE-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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Q2 Earnings Season in Final Stretch

The Q2 earnings season is effectively over, with results from 451 S&P 500
companies, accounting for almost 91.9% of the index's total market
capitalization, already out (as of Friday, August 9th). We have already seen
Q2 reports from 9 of the 16 Zacks sectors, including Finance, Energy, Basic
Materials, and Utilities.

This week brings in reports from a total of 126 companies, including 13 S&P
500 members. The Retail sector, which typically has non-calendar quarter
ending periods, has the most number of companies still to report Q2 results.
In fact, 47% of the S&P 500 companies whose results are still awaited belong
to the Retail sector. This week's line-up of reports has a heavy Retail sector
representation, with Wal-Mart (NYSE:WMT-Free Report), Macy's (NYSE:M-Free
Report) and Kohl's (NYSE:KSS-Free Report) reporting results. Other notable
companies reporting this week include Cisco (Nasdaq:CSCO-Free Report) and
Deere (NYSE:DE-Free Report).  

With the bulk of the Q2 earnings season now behind us, we are in a good
position to judge the health of corporate earnings.

Looking at the aggregate growth rates, beat ratios, and median surprises, the
Q2 earnings season isn't materially different from what we saw in Q1 and over
the last few earnings seasons. While we had graded the Q1 earnings season as
between 'average' and 'below average,' the Q2 earnings season appears to be
tracking better than Q1 on improved revenue surprises.

But before buying into the not-so-bad earnings narrative, we should keep in
mind that strong numbers from the Finance sector are playing an outsized role
in giving respectability to the aggregate earnings picture. One could dispute
the legitimacy of the strength in Finance earnings given the not-so-small
contribution of reserve releases to the sector's earnings performance. But
even keeping this issue aside, there is no dispute about the broad weakness
outside of the Finance sector.

Given this broad-based growth weakness, I would give the Q2 earnings season a
'below average' grade, even though total earnings for the quarter will likely
reach a new all-time record.

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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