Zacks Earnings Trends Highlights: Bank of America, Verizon and Travelers

   Zacks Earnings Trends Highlights: Bank of America, Verizon and Travelers

PR Newswire

CHICAGO, Jan. 24, 2014

CHICAGO, Jan. 24, 2014 /PRNewswire/ --Zacks Director of Research Sheraz Mian
says, "There is actually nothing wrong with earnings picture; they are about
as good or as bad any of the other recent quarters."


What's Wrong with the Earnings Picture?

With respect to the Scorecard for 2013 Q4, we have seen results from 102 S&P
500 members accounting for 27.3% of the index's total market capitalization.
Total earnings for these 102 companies are up +22.8% from the same period last
year, with 65.7% beating earnings expectations with a median surprise of
+2.0%. Total revenues for these companies are up +3.6%, with 54.9% beating
revenue expectations with a median surprise of +0.8%.

The +22.8% 'headline' total earnings growth rate definitely looks fairly
robust, particularly when compared to the growth rate for this same group of
102 companies in the last few quarters. Before we get too excited about this
growth pace and start extrapolating it into the coming quarters, we should
keep in mind that the bulk of this growth is due to easy comparisons for just
three companies – Bank of America (NYSE:BAC-Free Report), Verizon
(NYSE:VZ-Free Report) and Travelers (NYSE:TRV-Free Report) Exclude these three
and total earnings growth for the S&P 500 companies that have reported drops
to +8.3% from +22.8%, which is about where growth has been in recent quarters.

The composite picture for Q4 – combining the results for the 102 companies
that have reported already with the 398 still to come – is for earnings growth
of +7.6% on +1.7% higher revenues and 52 basis points higher margins. The
actual Q4 growth rally will most likely be higher than this, a function of
management's well refined expectations management skills.

More important than what happened in Q4 is the question of whether management
guidance for the coming period(s) will get any better from what we have become
accustomed to in recent quarters. My sense is that the preponderance of
guidance will remain negative, as has been the case for more than a year now.
This will keep downward pressure on estimates for the coming quarters.

Trends on the estimate revision front have been negative for a while, but we
could afford to overlook such details in the Fed-inspired rally. It will be
interesting to see if investors will continue shrug estimate cuts in the
post-Taper world.

Want stock picks from Zacks Equity Research that are based on earnings
estimates? Subscribe to the free "Profit from the Pros" newsletter: Click here

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative
analysis to help investors know what stocks to buy and which to sell for the
long-term. Continuous analyst coverage is provided for a universe of 1,150
publicly traded stocks. Our analysts are organized by industry which gives
them keen insights to developments that affect company profits and stock
performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the
latest analysis from Zacks Equity Research. Click here to subscribe to this
free newsletter today.

About Zacks is a property of Zacks Investment Research, Inc., which was formed
in 1978. The later formation of the Zacks Rank, a proprietary stock picking
system; 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

Get the full Report on BAC - FREE

Get the full Report on VZ - FREE

Get the full Report on TRV - FREE

Follow us on Twitter:

Join us on Facebook:

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

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339 provides investment resources and informs you of these resources,
which you may choose to use in making your own investment decisions. Zacks is
providing information on this resource to you subject to the Zacks "Terms and
Conditions of Service" disclaimer.

Past performance is no guarantee of future results. Inherent in any investment
is the potential for loss. This material is being provided for informational
purposes only and nothing herein constitutes investment, legal, accounting or
tax advice, or a recommendation to buy, sell or hold a security. No
recommendation or advice is being given as to whether any investment is
suitable for a particular investor. It should not be assumedthat any
investments in securities, companies, sectors or markets identified and
described were or will be profitable. All information is current as of the
date of herein andis subject to change without notice. Any views or opinions
expressed may not reflect those of the firm as a whole. Zacks Investment
Research does not engage in investment banking, market making or asset
management activities of any securities. These returns are from hypothetical
portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced
monthly with zero transaction costs. These are not the returns of actual
portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers
displayed in this press release.

SOURCE Zacks Investment Research, Inc.

Press spacebar to pause and continue. Press esc to stop.