Week in Preview: Earnings Expectations for Walgreen, Family Dollar, Jabil Circuit

One of the most prominent quarterly reports scheduled this week, as the quarter winds down, comes from Walgreen WAG. Analysts surveyed by Thomson Reuters are looking for the drugstore chain operator to report Tuesday that its fiscal fourth-quarter earnings were about the same as a year ago, or 45 cents per share. Note, though, that Walgreen fell short of earnings expectations in the previous two quarters. During the three months that ended in August, Deerefield, Ill.-based Walgreen launched a social responsibility website and boosted its dividend. Revenue for that period is expected to total $16.8 billion, which is a 7.3% increase from the same period of last year. And for the full year, analysts forecast EPS of $2.12 (+4.7%) on revenue of $67.4 billion (+6.4%). Walgreen has a long-term EPS growth forecast of 13.3%, which is better than that of rival CVS Caremark CVS, as well as the industry average. Walgreen's forward price-earnings (PE) ratio of 12.7 is less than the industry average and its trailing PE ratio of 13.9. Walgreen keeps enough cash on hand to cover long-term debt, and net cash flow from operations surged in the previous period. The First Call recommendation has been to buy WAG for more than 90 days, and the mean price target is currently $35.63. The Motley Fool makes a case for buying the stock. The share price has bounced between $26 and $30 since June and ended last week at $30.36, well below the 52-week high of $40.69. Family Dollar Stores FDO is expected to be one of the week's biggest earnings gainers. In the three months that ended in August, the nation's number two dollar-store chain announced a partnership with Western Union WU and declared a quarterly dividend. The company is expected to post earnings of 51 cents per share, which is a 15.7% increase from a year ago. Fiscal fourth-quarter revenue is estimated to have grown 8.0% to $1.9 billion, and the full-year forecast calls for earnings of $2.58 per share (+19.8%) on revenue of $7.9 billion (+6.3%). Earnings results have met or topped consensus estimates in the past five quarters. Family Dollar's long-term EPS growth forecast is 13.6%, and its forward PE ratio is 15.0, which is down from the trailing PE ratio of 17.3. Family Dollar has a return on equity of 21.4%, and keeps enough cash on hand to cover long-term debt. The consensus recommendation remains to buy FDO; Barclays just maintained its overweight rating on the stock. Shares are up 55.9% year to date and trading near the 52-week high of $44.48. Analysts are looking for St. Petersburg, Fla.-based Jabil Circuit JBL to post a profit of a 49 cents per share for a fiscal fourth quarter in which it predicted a record year in revenue and earnings, and also declared a quarterly dividend. That compares to EPS of just 16 cents in the year-ago period. Revenue for the three months that ended in August is expected to total $3.9 billion, or 38.8% more than a year ago. And the forecast is for full-year per-share earnings of $1.50 (+58%) and $13.4 billion in revenue (+15.0%). Jabil's earnings results have been better than expected in the past five quarters, beating estimates by as much as seven cents per share. Continue reading the article.