Earnings Season to Pick Up Steam - Earnings Preview

Earnings Preview 1/18/11

This week, the fourth quarter earnings season really starts to get rolling. A total of 128 firms are due to report, including 50 S&P 500 firms. We define any fiscal period ending in November, December and January to be the fourth quarters.

By the end of the week we should have a reasonably good idea of how the fourth quarter earnings season will go. The firms reporting this week include several icons of U.S. business, including:  Apple (AAPL), Google (GOOG), International Business Machines (IBM), Goldman Sachs (Gs), Wells Fargo (WFC), General Electric (GE) and Freeport McMoRan (FCX). That is an interesting cross-section of the market that may provide clues to the overall direction of the economy.

While things will be busy on the earnings side, the same is not true of the economic data front, where it will be a relatively quite week. The most interesting data will be regarding housing as we get Housing Starts and Building Permits, Existing Home Sales and the National Association of Homebuilders index. We will also get two of the regional “mini-ISM” numbers.

Tuesday

• The Empire State Index is expected to rise to 12.0 from 10.57. It is sort of a mini-ISM, just covering New York State, only with zero as the dividing line between expansion and contraction. Thus the economy is expected to continue to expand in NY and at a slightly faster pace than last month.
• The National Association of Homebuilders index is expected to remain at 16, an awful showing. Any reading below 50 indicates a contraction. While off its all-time low of 9 set in January 2009, it is still pointing to a very weak environment for the homebuilders.

Wednesday

• Housing Starts are expected to have slipped slightly to a seasonally adjusted annual rate of 550,000 from 555,000 in November. The good news is that the low level of housing starts means that less housing is being added to the current bloated inventory. The bad news is that normally homebuilding is one of the main forces pulling the economy out of a recession, and that is simply not happening this time. The very low level of housing starts is one of the key reasons job growth is so sluggish.
• There might be a very small glimmer of hope for the homebuilders, though, as Building permits -- the best indicator of future housing starts -- are expected to rise to 560,000 from 530,000. While that is a nice percentage increase, it is still an extremely low level.

Thursday

• Existing Home Sales are expected to increase to a seasonally adjusted annual rate of 4.80 million from 4.68 million. That should help bring the months of supply down from the November rate of 9.5 months. That level is still extremely high and indicates strong downward pressure on home prices. That really is what to watch in the existing home sales numbers, since the amount of economic activity generated by an existing home changing hands is not really that big a deal, but home prices are a very big deal. Unfortunately, it looks like they are falling again.
• Initial Claims for Unemployment Insurance looked like they had broken out of the trading range they were in for most of 2010, and have done so to the downside (that's good). There was a massive drop over the Christmas week, but the last two weeks have tempered that good news. Last week they rose to 445,000 -- an increase of 35,000. The Christmas week number was the first drop below the 400,000 level in this cycle, but it proved to be too good to be true. The consensus is looking for things to get back on track, with a fall to 425,000. We probably need to see them fall below 400,000 and stay there to signal the economy is adding enough jobs to finally bring down the unemployment rate. We are getting closer, but are not there yet.
• Continuing claims have also in a downtrend of late, but the path has been erratic. Last week they fell by 248,000 to 3.879 million. That is down 983,000 from a year ago. Some of the longer-term decline due to people simply exhausting their regular state benefits which run out after 26 weeks, but even extended claims have started to decline (erratically) as well. Federally paid extended claims rose by 128,000 to 4.635 million, and down 649,000 from a year ago. Looking at just the regular continuing claims numbers is a serious mistake. Make sure to look at both sets of numbers!  Many of the press reports will not, but we will here at Zacks.
• The Philly Fed index, another regional “mini-ISM,” is expected to drop to a reading of 20.4 from 24.3 in December. That is still showing pretty healthy growth, but a bit slower than the rate in December.
• The index of Leading Economic Indicators is expected to rise by 0.6%, on top of a 1.1% rise in November.

Friday

• Nothing of significance.

Potential Positive or Negative Surprises

Historically the best indicators of firms likely to report positive surprises are a recent history of positive surprises and rising estimates going into the report. The Zacks Rank is also a good indicator of potential surprises. While normally firms that report better-than-expected earnings rise in reaction, that has not been the case so far this quarter.

Given the small number of firms reporting, we skip this section this week.

Earnings Calendar

Company	Ticker	Qtr End	EPS Est	Year Ago EPS	Last EPS Surprise %	Next EPS Report Date	Time	Daily Price
APPLE INC	AAPL	201012	$5.34	$3.67	14.57	20110118	AMC	$345.68
CITIGROUP INC	C	201012	$0.08	($0.34)	60	20110118	BTO	$5.04
COURIER CORP	CRRC	201012	$0.18	$0.23	-28.57	20110118		$14.91
CREE INC	CREE	201012	$0.51	$0.32	1.85	20110118	AMC	$65.46
DELTA AIR LINES	DAL	201012	$0.27	($0.27)	15.79	20110118	BTO	$12.61
FASTENAL	FAST	201012	$0.45	$0.30	2	20110118	BTO	$58.81
FOREST LABS A	FRX	201012	$0.99	$0.97	6.38	20110118	BTO	$31.56
FULTON FINL	FULT	201012	$0.16	$0.11	14.29	20110118	AMC	$10.16
GREENMAN TECH	GMTI	201012	N/A	($0.05)	N/A	20110118	BTO	$0.54
HANCOCK HLDG CO	HBHC	201012	$0.40	$0.37	14.29	20110118	AMC	$33.20
II-VI INCORP	IIVI	201012	$0.52	$0.24	40.48	20110118	BTO	$48.17
INTL BUS MACH	IBM	201012	$4.08	$3.59	2.55	20110118	AMC	$148.82
LABRANCHE & CO	LAB	201012	($0.12)	$0.07	-600	20110118	BTO	$3.89
LEE ENTRPRS	LEE	201012	N/A	$0.25	N/A	20110118	BTO	$2.77
LINEAR TEC CORP	LLTC	201012	$0.58	$0.35	0	20110118	AMC	$34.88
MCMORAN EXPLOR	MMR	201012	($0.26)	($0.05)	0	20110118	BTO	$17.53
MERCANTILE BANK	MBWM	201012	($0.29)	($0.78)	-415.38	20110118		$8.71
NEW ORIENTAL ED	EDU	201011	$0.02	$0.03	0.63	20110118	BTO	$108.64
OMNOVA SOLUTION	OMN	201011	$0.25	$0.26	4.55	20110118	AMC	$8.57
ORIGIN AGRITECH	SEED	201012	($0.11)	($0.09)	6.35	20110118	BTO	$11.31
PINNACLE FIN PT	PNFP	201012	($0.05)	($0.12)	106.67	20110118	AMC	$13.55
SCHWAB(CHAS)	SCHW	201012	$0.15	$0.14	11.11	20110118	BTO	$18.55
TD AMERITRADE	AMTD	201012	$0.25	$0.24	-13.04	20110118	BTO	$20.89
TESSCO TECH INC	TESS	201012	$0.44	$0.37	-2.27	20110118	AMC	$16.20
WESTERN DIGITAL	WDC	201012	$0.58	$1.85	3.7	20110118	AMC	$32.75
WNS HLDGS-ADR	WNS	201012	$0.24	$0.19	45	20110118	BTO	$11.69
ADTRAN INC	ADTN	201012	$0.43	$0.29	13.64	20110119		$39.42
AMPHENOL CORP-A	APH	201012	$0.73	$0.52	7.35	20110119	BTO	$52.60
AMR CORP	AMR	201012	($0.34)	($1.25)	21.88	20110119	BTO	$8.56
ASML HOLDING NV	ASML	201012	$0.99	$0.17	11.84	20110119	BTO	$37.29
BANK OF NY MELL	BK	201012	$0.57	$0.55	3.7	20110119	BTO	$31.64
CAMPUS CREST CM	CCG	201012	$0.17	N/A	N/A	20110119	AMC	$13.35
COMERICA INC	CMA	201012	$0.31	($0.40)	-19.51	20110119	BTO	$42.01
CVB FINL	CVBF	201012	$0.14	$0.04	6.25	20110119	AMC	$8.35
DIGI INTL INC	DGII	201012	$0.08	$0.05	0	20110119	AMC	$12.19
EBAY INC	EBAY	201012	$0.41	$0.37	12.9	20110119	AMC	$28.71
F5 NETWORKS INC	FFIV	201012	$0.65	$0.36	9.09	20110119	AMC	$143.95
GOLDMAN SACHS	GS	201012	$3.76	$8.20	30.13	20110119	BTO	$171.57
IGATE CORP	IGTE	201012	$0.26	$0.15	13.64	20110119	BTO	$16.29
KINDER MORG ENG	KMP	201012	$0.42	$0.42	-36.11	20110119	AMC	$72.03
MARSHALL&ILSLEY	MI	201012	($0.24)	($0.54)	-28	20110119	BTO	$7.10
NORTHERN TRUST	NTRS	201012	$0.71	$0.82	-9.86	20110119	BTO	$55.50
NVE CORP	NVEC	201012	$0.65	$0.57	-1.49	20110119	AMC	$61.08
PACIFIC CONTL	PCBK	201012	$0.10	$0.00	-40	20110119	AMC	$9.84
PARK STERLNG CP	PSTB	201012	($0.03)	N/A	-666.67	20110119	BTO	$6.04
PETMED EXPRESS	PETS	201012	$0.20	$0.25	-15.38	20110119	BTO	$15.61
PLEXUS CORP	PLXS	201012	$0.60	$0.39	8.33	20110119	AMC	$29.55
RAYMOND JAS FIN	RJF	201012	$0.52	$0.35	0	20110119	AMC	$33.62
SEAGATE TECH	STX	201012	$0.33	$1.03	-17.78	20110119	AMC	$14.08
SLM CORP	SLM	201012	$0.70	$0.41	29.63	20110119	AMC	$14.09
STATE ST CORP	STT	201012	$0.85	$0.99	3.61	20110119	BTO	$48.57
US BANCORP	USB	201012	$0.46	$0.30	4.65	20110119	BTO	$26.75
WELLS FARGO-NEW	WFC	201012	$0.62	$0.08	7.14	20110119	BTO	$31.89
WESTELL TECH-A	WSTL	201012	$999.00	$0.04	75	20110119	AMC	$3.56
XILINX INC	XLNX	201012	$0.52	$0.40	0	20110119	AMC	$30.89
ADV MICRO DEV	AMD	201012	$0.11	($0.05)	150	20110120	AMC	$8.26
ASSOC BANC CORP	ASBC	201012	$0.05	($1.41)	0	20110120	AMC	$14.67
BANCFIRST OKLA	BANF	201012	$0.69	$0.63	13.64	20110120	AMC	$43.21
BANCORPSOUTH	BXS	201012	$0.03	$0.23	160	20110120	AMC	$15.20
BODY CENTRAL CP	BODY	201012	$0.26	N/A	N/A	20110120	AMC	$20.27
CAPITAL ONE FIN	COF	201012	$1.25	$0.89	59.82	20110120	AMC	$46.69
CITY NATIONAL	CYN	201012	$0.69	$0.05	12.07	20110120	AMC	$61.54
CONSOL EDISON	ED	201012	$0.70	$0.67	8.2	20110120	AMC	$49.96
COSTAMARE INC	CMRE	201012	$0.34	N/A	N/A	20110120	AMC	$15.16
CUBIST PHARM	CBST	201012	$0.34	$0.45	21.95	20110120	AMC	$22.51
ELECTRN IMAGING	EFII	201012	$0.13	($0.07)	600	20110120	AMC	$14.53
EMULEX CORP	ELX	201012	$0.05	$0.12	-60	20110120	AMC	$12.73
EZCORP INC CL A	EZPW	201012	$0.62	$0.52	5.66	20110120	AMC	$28.56
FAIRCHILD SEMI	FCS	201012	$0.39	$0.23	5	20110120	BTO	$16.76
FIFTH THIRD BK	FITB	201012	$0.25	($0.20)	29.41	20110120	BTO	$14.62
FLEXTRONIC INTL	FLEX	201012	$0.22	$0.15	16.67	20110120	AMC	$8.30
FREEPT MC COP-B	FCX	201012	$2.84	$2.23	16.36	20110120	BTO	$118.07
GATX CORP	GMT	201012	$0.40	$0.34	20.51	20110120	BTO	$34.15
GOOGLE INC-CL A	GOOG	201012	$7.14	$6.13	13.51	20110120	AMC	$616.69
HOME BANCSHARES	HOMB	201012	($0.65)	$0.25	3.33	20110120	BTO	$20.59
HUDSON CITY BCP	HCBK	201012	$0.22	$0.28	-3.85	20110120	BTO	$12.97
HUNTINGTON BANC	HBAN	201012	$0.08	($0.65)	66.67	20110120	BTO	$7.12
INDEP BK MASS	INDB	201012	$0.53	$0.43	10.42	20110120	AMC	$27.00
INTERACTIVE BRK	IBKR	201012	$0.16	$0.06	30	20110120	AMC	$18.08
INTL GAME TECH	IGT	201012	$0.20	$0.23	-5.26	20110120	AMC	$18.88
INTUITIVE SURG	ISRG	201012	$2.25	$1.95	2.39	20110120	DMT	$279.11
ITT EDUCATIONAL	ESI	201012	$3.11	$2.56	3.3	20110120	BTO	$64.09
J&J SNACK FOODS	JJSF	201012	$0.40	$0.38	4.76	20110120	AMC	$48.78
JOHNSON CONTROL	JCI	201012	$0.53	$0.43	5.26	20110120	BTO	$40.21
KNIGHT CAP GP	KCG	201012	$0.20	$0.33	-45	20110120	BTO	$14.27
LG DISPLAY-ADR	LPL	201012	($0.24)	$0.55	-13.33	20110120		$17.16
MATTHEWS INTL-A	MATW	201012	$0.45	$0.43	1.54	20110120	AMC	$34.19
MAXIM INTG PDTS	MXIM	201012	$0.41	$0.24	16.22	20110120	AMC	$25.72
MEREDITH CORP	MDP	201012	$0.87	$0.49	12	20110120	BTO	$35.79
MERIDIAN BIOSCI	VIVO	201012	$0.19	$0.22	-16.67	20110120	BTO	$22.86
MICROSEMI CORP	MSCC	201012	$0.30	$0.18	0	20110120	AMC	$24.74
MORGAN STANLEY	MS	201012	$0.35	$0.14	-73.68	20110120		$28.30
NETSCOUT SYSTMS	NTCT	201012	$0.25	$0.23	5.56	20110120	AMC	$25.53
NETSPEND HLDGS	NTSP	201012	$0.09	$0.04	-11.11	20110120	AMC	$14.02
NORDION INC	NDZ	201010	$0.01	($0.10)	-1100	20110120	AMC	$10.13
OCEANFIRST FINL	OCFC	201012	$0.28	$0.12	3.57	20110120	AMC	$13.56
PACIFIC BIOSCI	PACB	201012	($0.80)	N/A	N/A	20110120	AMC	$15.61
PARKER HANNIFIN	PH	201012	$1.30	$0.64	41.12	20110120	BTO	$89.23
PEOPLES UTD FIN	PBCT	201012	$0.10	$0.08	-20	20110120	AMC	$14.21
PNC FINL SVC CP	PNC	201012	$1.38	$0.90	4.7	20110120	BTO	$61.13
POLYCOM INC	PLCM	201012	$0.31	$0.20	-4.17	20110120	AMC	$41.37
POPULAR INC	BPOP	201012	($0.01)	($0.33)	450	20110120	BTO	$3.21
PPG INDS INC	PPG	201012	$1.12	$0.86	8.9	20110120	BTO	$82.54
PROGRESSIVE COR	PGR	201012	$0.36	$0.42	8.11	20110120	BTO	$19.16
ROCKWELL COLLIN	COL	201012	$0.87	$0.76	0	20110120	BTO	$61.95
SKYWORKS SOLUTN	SWKS	201012	$0.39	$0.22	0	20110120	AMC	$31.80
SOUTHWEST AIR	LUV	201012	$0.16	$0.10	4	20110120	BTO	$13.09
SVB FINL GP	SIVB	201012	$0.52	$0.16	12.24	20110120	AMC	$54.69
SYNAPTICS INC	SYNA	201012	$0.49	$0.35	8.33	20110120	AMC	$31.03
TCF FINL CORP	TCB	201012	$0.23	$0.15	-10.34	20110120	BTO	$15.46
TEMPUR-PEDIC	TPX	201012	$0.57	$0.38	12.73	20110120	AMC	$41.85
TYCO ELECTR-LTD	TEL	201012	$0.68	$0.47	2.86	20110120	BTO	$36.33
UNION PAC CORP	UNP	201012	$1.47	$1.08	4	20110120	BTO	$99.02
UNITEDHEALTH GP	UNH	201012	$0.84	$0.81	35.71	20110120	BTO	$39.60
VIRGINIA COMMRC	VCBI	201012	$0.15	$0.11	25	20110120		$6.10
WIPRO LTD-ADR	WIT	201012	$0.12	$0.11	9.09	20110120	AMC	$14.60
AIR PRODS & CHE	APD	201012	$1.34	$1.16	2.27	20110121	BTO	$88.86
AIRGAS INC	ARG	201012	$0.79	$0.65	2.47	20110121	BTO	$63.47
APPLD INDL TECH	AIT	201012	$0.44	$0.24	14.29	20110121	BTO	$33.16
BANK OF AMER CP	BAC	201012	$0.18	($0.60)	68.75	20110121	BTO	$14.77
BB&T CORP	BBT	201012	$0.27	$0.27	15.38	20110121	BTO	$26.87
FIRST HRZN NATL	FHN	201012	($0.02)	($0.30)	450	20110121	BTO	$12.48
GENL ELECTRIC	GE	201012	$0.32	$0.31	7.41	20110121	BTO	$18.60
METALS USA HLDG	MUSA	201012	$0.09	($0.30)	-11.11	20110121	BTO	$15.38
PROSPERITY BCSH	PRSP	201012	$0.68	$0.65	0	20110121	BTO	$39.07
SCHLUMBERGER LT	SLB	201012	$0.77	$0.67	0	20110121	BTO	$84.60
SUNTRUST BKS	STI	201012	$0.09	($0.64)	-999	20110121	BTO	$28.35
TENNESSEE COMRC	TNCC	201012	$0.03	$0.27	-214.29	20110121		$4.98

 
APPLE INC (AAPL): Free Stock Analysis Report
 
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GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
 
GOLDMAN SACHS (GS): Free Stock Analysis Report
 
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