Q1 Earnings Season Gets Underway - Earnings Preview
March 14 2014 - 2:46AM
Zacks
Q1 Earnings Season Gets Underway
We will start counting Tuesday’s earnings announcements from
Adobe Systems (ADBE) and Oracle
(ORCL) as part of 2014 Q1 reporting cycle, though we are still a
few weeks away from the earnings season taking the spotlight.
The market has plenty of domestic economic data to digest this week
in a backdrop of developments in Ukraine and renewed questions
about China’s growth outlook. On the docket this week are a host of
housing, inflation, and manufacturing sector reports, but the focus
will be on the FOMC meeting, particularly Fed Chairwoman Yellen’s
first press conference.
The Fed isn’t expected to spring any surprises on the market. But
with the unemployment rate not too far from the Fed’s 6.5% target,
they will need to move past explicit thresholds without roiling the
markets. This isn’t easy to do, as too vague a threshold leaves
open the risk that the market gets ahead of the Fed in pricing the
eventual monetary tightening. The FOMC could address this issue in
its official statement on Wednesday, but the issue is bound to come
in Janet Yellen’s press event that afternoon.
Beyond the Fed and economic data, we have a number of corporate
bellwethers coming out with 2014 Q1 results (companies with fiscal
quarters ending in February and reporting in March get counted as
part of Q1 tally), which includes besides Oracle,
Nike (NKE), FedEx (FDX),
General Mills (GIS) and KB Home
(KBH).
These Q1 earnings reports aside, we are in the transition phase
between two earnings seasons when the last one hasn’t completely
ended even as the new one is upon us. Of this week’s 80 earnings
announcements, there are only 18 companies with fiscal quarters
ending in February and getting counted towards the Q1 tally; the
rest belong the 2013 Q4 reporting cycle (we have Q4 earnings
reports from 497 S&P 500 companies, as of Friday, March
14th).
Expectations for 2014 Q1
Estimates for 2014 Q1 started coming down at an accelerated pace as
companies predominantly guided lower on the 2013 Q4 earnings calls,
consistent with the trend we have been seeing for more than a year
now. Total Q1 earnings for companies in the S&P 500 are
currently expected to be down -1.5% from the same period last year,
a material decline from the +2.1% growth expected in early January
2014.
The negative revision trend is widespread, but is particularly
notable for the Retail, Basic Materials, Autos, Consumer Staples,
and the Energy sectors, as the chart below shows.
With roughly two-thirds of S&P 500 companies beating earnings
expectations in any reporting cycle, actual Q1 results will almost
certainly be better than these pre-season expectations. But Q1 is
unlikely to repeat the performance of the last few quarters where
we would witness a new all-time earnings total record each quarter.
Total earnings for the S&P 500 are on track to reach $269.4
billion in 2013 Q4 (we still have 3 more companies to report
results before ‘closing the books’ on that quarter). This is a new
all-time quarterly record for total earnings, surpassing the
previous record set in 2013 Q3 at $262.7 billion. Current estimates
for 2014 Q1 aggregate to a quarterly total of $252.4 billion, but
the expectation is for a strong ramp up from Q2 onwards.
Scorecard for 2013 Q4 (as of Friday, March
14th)
With respect to the ‘scorecard’ for 2013 Q4, we are still waiting
for results from 3 S&P 500 members. Total earnings for the 497
S&P 500 members that have reported results are up +9.2%
from the same period last year, with a ‘beat ratio’ of 64.2% and a
median surprise of +2.4%. Total revenues are barely in the positive
column, up only +0.7%, with a revenue ‘beat ratio’ of 55.9% and a
median surprise of +0.6%. While the revenue growth rate in Q4 was
held down by tough comparisons in the Finance sector, the overall
earnings growth rate in the quarter was the highest of 2013.
A big contributor to the strong Q4 earnings growth is easy
comparisons for three companies – Bank of America
(BAC), Verizon (VZ), and
Travelers (TRV). Exclude these three companies and
total earnings growth for the S&P 500 companies that have
reported drops to +5.5% from the ‘headline’ +9.2%, which is about
where growth has been in recent quarters.
For a detailed at the Q4 earnings season and the overall earnings
picture, please check out our weekly Earnings Trends report.
Monday-3/17
- A busy day on the economic calendar, with March Empire State
manufacturing survey and Homebuilder sentiment index coming out
before the open. Also coming out this morning is the February
Industrial Production report.
Tuesday -3/18
- Housing Starts and CPI for February are the notable economic
reports this morning. The two-day FOMC meeting will get underway
today.
- Adobe Systems (ADBE) and
Oracle (ORCL) are the notable earnings reports
today, both after the close.
- Earnings ESP or Expected Surprise Prediction, our proprietary
leading indicator of positive earnings surprises is showing Oracle
coming out with an earning beat.
- Our research shows that companies with Zacks Rank of 1, 2 or 3
and positive Earnings ESP are highly likely to beat EPS estimates.
Oracle has Zacks Rank #3 (Hold) and Earnings ESP of +1.5%.
- To get a better understanding of Zacks Earnings Surprise
Predictor, please click here.
Wednesday-3/19
- The Fed is in focus today, with the FOMC coming out with its
statement and followed by Chairwoman Yellen’s press
conference.
- FedEx (FDX), General Mills
(GIS) and KB Homes (KBH) will report in the
morning, while Jabil Circuit (JBL) and
Guess (GES) will report after the close.
- Earnings ESP is showing General Mills beating EPS expectations.
General Mills has Zacks Rank #3 (Hold) and Earnings ESP of
+1.5%
Thursday -3/20
- In addition to weekly Jobless Claims, we will get the February
Existing Home sales data and the March Philly Fed regional
survey.
- ConAgra (CAG) and Lennar Corp
(LEN) are the notable earnings reports in the morning, while
Nike (NKE) will report after the close.
Friday-3/21
- Not much on the economic calendar, while
Tiffany (TIF) and Darden
Restaurants (DRI) will report earnings results, both in
the morning.
- Tiffany with a Zacks Rank of 3 and Earnings ESP of +0.7% is
expected to come out with a positive earnings surprise.
Here is a list of the 80 companies reporting this week,
including 10 S&P 500 members.
Company |
Ticker |
Current Qtr |
Year-Ago Qtr |
Last EPS Surprise % |
Report Day |
Time |
ARES COMMERCIAL |
ACRE |
0.2 |
0.13 |
-46.15 |
Monday |
BTO |
ALTEVA |
ALTV |
0.13 |
-0.21 |
N/A |
Monday |
AMC |
APPRICUS BIOSCI |
APRI |
-0.06 |
-0.21 |
10 |
Monday |
AMC |
ALPHATEC HLDGS |
ATEC |
-0.02 |
-0.01 |
150 |
Monday |
AMC |
BIOLINE RX LTD |
BLRX |
-0.18 |
-0.3 |
-11.11 |
Monday |
BTO |
CORENERGY INFRA |
CORR |
0.13 |
N/A |
0 |
Monday |
N/A |
DTS INC |
DTSI |
N/A |
0.17 |
85.71 |
Monday |
AMC |
COPEL-ADR PR B |
ELP |
N/A |
-0.18 |
4.88 |
Monday |
N/A |
FATE THERAPEUTC |
FATE |
-0.29 |
N/A |
-1200 |
Monday |
AMC |
FIBROCELL SCIEN |
FCSC |
-0.26 |
N/A |
-128.57 |
Monday |
BTO |
FUTUREFUEL CORP |
FF |
0.2 |
0.15 |
-2.78 |
Monday |
AMC |
FORTUNA SILVER |
FSM |
0.04 |
0.07 |
-100 |
Monday |
N/A |
GAIAM INC |
GAIA |
-0.02 |
0.09 |
0 |
Monday |
AMC |
GENIE ENERGY-B |
GNE |
-0.05 |
0.08 |
100 |
Monday |
AMC |
HEALTH INS INN |
HIIQ |
0.09 |
N/A |
14.29 |
Monday |
N/A |
INOVIO PHARMAC |
INO |
-0.03 |
-0.02 |
0 |
Monday |
BTO |
IMAGEWARE SYS |
IWSY |
-0.02 |
-0.02 |
N/A |
Monday |
AMC |
JA SOLAR HOLDGS |
JASO |
-0.03 |
-2.65 |
11.9 |
Monday |
BTO |
KYTHERA BIOPHRM |
KYTH |
-0.69 |
-1.04 |
16.22 |
Monday |
AMC |
LATAM AIRLINES |
LFL |
0.16 |
0.01 |
80 |
Monday |
AMC |
LMI AEROSPACE |
LMIA |
0 |
0.38 |
-27.27 |
Monday |
BTO |
LINDE AG ADR |
LNEGY |
N/A |
0.28 |
N/A |
Monday |
N/A |
MELA SCIENCES |
MELA |
-0.1 |
-0.19 |
0 |
Monday |
AMC |
NAVIGATOR HLDGS |
NVGS |
0.25 |
0.23 |
N/A |
Monday |
AMC |
OFS CAPITAL CRP |
OFS |
0.16 |
N/A |
-21.05 |
Monday |
BTO |
STERLING CONSTR |
STRL |
-1.47 |
0.01 |
25 |
Monday |
BTO |
TSAKOS EGY NAVG |
TNP |
-0.08 |
-0.16 |
66.67 |
Monday |
BTO |
TROVAGENE INC |
TROV |
-0.23 |
-0.1 |
80.65 |
Monday |
AMC |
TOWERSTREAM CP |
TWER |
-0.1 |
-0.12 |
0 |
Monday |
AMC |
ADOBE SYSTEMS |
ADBE |
0.12 |
0.22 |
-5.26 |
Tuesday |
AMC |
ORACLE CORP |
ORCL |
0.67 |
0.63 |
3.13 |
Tuesday |
AMC |
AERIE PHARMACT |
AERI |
-0.21 |
N/A |
-502.08 |
Tuesday |
AMC |
GLOBAL B&C HLD |
BRSS |
0.33 |
N/A |
-5.26 |
Tuesday |
AMC |
CONSOLTD WATER |
CWCO |
0.05 |
0.25 |
-25 |
Tuesday |
BTO |
DSW INC CL-A |
DSW |
0.29 |
0.34 |
0 |
Tuesday |
BTO |
FACTSET RESH |
FDS |
1.22 |
0.89 |
-1.61 |
Tuesday |
BTO |
GLOBAL POWER EQ |
GLPW |
0.36 |
0.51 |
5.26 |
Tuesday |
N/A |
GTT COMMUNICATN |
GTT |
-0.09 |
-0.02 |
55.56 |
Tuesday |
BTO |
MOBILE TELE-ADR |
MBT |
0.42 |
0.58 |
40 |
Tuesday |
BTO |
PAC SUNWEAR CAL |
PSUN |
-0.18 |
-0.17 |
0 |
Tuesday |
AMC |
RENREN INC-ADR |
RENN |
0.05 |
-0.06 |
22.22 |
Tuesday |
AMC |
PROSENA HLDG BV |
RNA |
-0.14 |
N/A |
-60 |
Tuesday |
BTO |
SAEXPLORATN HLD |
SAEX |
0.25 |
N/A |
-6450 |
Tuesday |
AMC |
TRADE ST RESID |
TSRE |
0.05 |
N/A |
-87.5 |
Tuesday |
AMC |
VERACYTE INC |
VCYT |
-0.37 |
N/A |
N/A |
Tuesday |
AMC |
YINGLI GREEN EN |
YGE |
-0.17 |
-0.94 |
0 |
Tuesday |
BTO |
FEDEX CORP |
FDX |
1.52 |
1.23 |
-4.85 |
Wednesday |
BTO |
GENL MILLS |
GIS |
0.68 |
0.64 |
-5.68 |
Wednesday |
BTO |
JABIL CIRCUIT |
JBL |
0.02 |
0.45 |
34.04 |
Wednesday |
AMC |
ACTUANT CORP |
ATU |
0.32 |
0.35 |
-4.35 |
Wednesday |
BTO |
BACTERIN INTL |
BONE |
-0.08 |
-0.11 |
-100 |
Wednesday |
AMC |
CLARCOR INC |
CLC |
0.42 |
0.47 |
-1.43 |
Wednesday |
AMC |
ELBIT SYSTEMS |
ESLT |
1.46 |
1.62 |
3.94 |
Wednesday |
BTO |
EVOGENE LTD |
EVGN |
-0.08 |
-0.02 |
N/A |
Wednesday |
BTO |
FRANCO NV CP |
FNV |
0.22 |
0.33 |
26.32 |
Wednesday |
AMC |
GUESS INC |
GES |
0.8 |
0.95 |
7.69 |
Wednesday |
AMC |
KB HOME |
KBH |
0.08 |
-0.16 |
-31.11 |
Wednesday |
BTO |
HERMAN MILLER |
MLHR |
0.34 |
0.32 |
2.44 |
Wednesday |
AMC |
SINOVAC BIOTECH |
SVA |
N/A |
-0.08 |
N/A |
Wednesday |
AMC |
TILLYS INC |
TLYS |
0.18 |
0.32 |
4.76 |
Wednesday |
AMC |
VERA BRADLEY |
VRA |
0.46 |
0.62 |
8.82 |
Wednesday |
BTO |
EXONE CO/THE |
XONE |
0.01 |
0.04 |
0 |
Wednesday |
AMC |
CONAGRA FOODS |
CAG |
0.6 |
0.55 |
12.73 |
Thursday |
BTO |
LENNAR CORP -A |
LEN |
0.28 |
0.26 |
14.06 |
Thursday |
BTO |
NIKE INC-B |
NKE |
0.73 |
0.73 |
1.72 |
Thursday |
AMC |
AMBIT BIOSCIENC |
AMBI |
-0.43 |
N/A |
14.29 |
Thursday |
AMC |
CATO CORP A |
CATO |
0.13 |
0.27 |
21.43 |
Thursday |
BTO |
CONSTELLIUM NV |
CSTM |
0.5 |
N/A |
6 |
Thursday |
BTO |
ENVIVIO INC |
ENVI |
-0.14 |
-0.18 |
21.43 |
Thursday |
AMC |
IHS INC-A |
IHS |
0.75 |
0.47 |
17.24 |
Thursday |
BTO |
MARCUS CORP |
MCS |
0 |
-0.01 |
-12.5 |
Thursday |
BTO |
NEW RESID INV |
NRZ |
0.16 |
N/A |
-16.67 |
Thursday |
BTO |
RALLY SOFTWARE |
RALY |
-0.31 |
N/A |
14.81 |
Thursday |
AMC |
SCHOLASTIC CORP |
SCHL |
-0.35 |
-0.63 |
-2.27 |
Thursday |
BTO |
SHOE CARNIVAL |
SCVL |
0.04 |
0.16 |
5.88 |
Thursday |
AMC |
SILVER WHEATON |
SLW |
0.25 |
0.5 |
-4.35 |
Thursday |
AMC |
TIBCO SOFTWARE |
TIBX |
0.11 |
0.09 |
9.38 |
Thursday |
AMC |
WET SEAL INC -A |
WTSL |
-0.24 |
-0.06 |
0 |
Thursday |
AMC |
DARDEN RESTRNT |
DRI |
0.82 |
1.02 |
-25 |
Friday |
BTO |
TIFFANY & CO |
TIF |
1.52 |
1.4 |
25.86 |
Friday |
BTO |
ADOBE SYSTEMS (ADBE): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
CONAGRA FOODS (CAG): Free Stock Analysis Report
DARDEN RESTRNT (DRI): Free Stock Analysis Report
FEDEX CORP (FDX): Free Stock Analysis Report
GUESS INC (GES): Free Stock Analysis Report
GENL MILLS (GIS): Free Stock Analysis Report
JABIL CIRCUIT (JBL): Free Stock Analysis Report
KB HOME (KBH): Free Stock Analysis Report
LENNAR CORP -A (LEN): Free Stock Analysis Report
NIKE INC-B (NKE): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
TIFFANY & CO (TIF): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Mar 2024 to Apr 2024
ConAgra Brands (NYSE:CAG)
Historical Stock Chart
From Apr 2023 to Apr 2024