Market Overview

Earnings Expectations for the Week of September 19


After last week's lull, things pick up again on the earnings front. Here is a peek at what analysts are expecting from some of this week's most anticipated quarterly reports: AutoZone (NYSE: AZO), Bed Bath & Beyond (NASDAQ: BBBY), Discover Financial Services (NYSE: DFS), FedEx (NYSE: FDX), General Mills (NYSE: GIS), Nike (NYSE: NKE) and Oracle (NASDAQ: ORCL).

Memphis-based auto parts and accessories retailer AutoZone is expected to report that its fiscal fourth-quarter earnings rose 18.8% from a year ago to $6.97 per share. But third-quarter revenues are anticipated to have risen just 6.7% to $2.6 million. The full-year forecast calls for $19.21 per share (up 22.1%) on $8.0 billion (up 9.0%). And per-share earnings are predicted to grow 14.9% over the next five years. The share price sprang up from near $268 on the August sell-off to hit a multiyear high of $332.93 on Friday. The stock has outperformed competitors Advance Auto Parts (NYSE: AAP) and O'Reilly Automotive (NASDAQ: ORLY) year to date.

Enterprise software company Oracle, which last week said it would be making a new product announcement on September 26, will post its fiscal first-quarter results on Tuesday. The company is expected to show $0.47 per share earnings and $8.4 billion in revenues. A year ago, earnings were $0.42 per share and revenues totaled $7.6 billion. Oracle has not fallen short of consensus estimates in the past ten quarters. The forward earnings multiple is 11.1 and the return on equity is 24.2%. But the share price is about 5% lower that at the beginning of the year. Over the past six months, the stock's performance has been similar to that of competitor SAP (NYSE: SAP).

Analysts are looking for New Jersey-based Bed Bath & Beyond to report Wednesday that its per-share earnings rose 16.7% year over year to $0.84. And for the second quarter during which a Cowen analyst upgraded the stock due to its strong competitive position and growth potential, revenues are expected to total $2.3 billion. That would be an increase of 8.1% from a year ago. Analysts have underestimated EPS results in the past ten quarters. Shares are trading almost 46% higher than a year ago and near a 52-week high. The stock has outperformed competitors Target (NYSE: TGT) and Williams-Sonoma (NYSE: WSM) over the past six months.

During the three months that ended in August, branded foods producer General Mills raised prices to offset increasing costs and also boosted its dividend 9%. Earnings for that period are expected to come in at $0.62 per share on revenue of $3.8 billion. That compares to $0.64 per share and $3.5 billion in the same period of last year. Per-share earnings have come within a penny or two of consensus estimates in the past six quarters. While the stock has faced resistance at $38 per share since early June, GIS has outperformed competitors Campbell Soup (NYSE: CPB) and Kellogg (NYSE: K) over the past six months.

Shares of Discover Financial Services jumped more than 10% last week after it said charge-offs fell to a new low in August. Analysts are looking for $0.91 per share earnings in Thursday's fiscal third-quarter report, which would be a 48.4% jump from a year ago. And revenues for the quarter are forecast to total $1.7 billion. Revenues for the current quarter are anticipated to grow 11.9%, and per-share earnings are predicted to grow 10.0% over the next five years. The share price is more than 71% higher than a year ago. Year to date, the stock has outperformed American Express (NYSE: AXP) and Visa (NYSE: V).

Economic bellwether FedEx recently announced the expansion of a distribution center and is rumored to be looking to expand its fleet of jets as well. On Thursday, the Memphis-based package delivery giant is expected to post $1.49 per share earnings, up from $1.20 a year ago, and $10.4 billion in revenues, a 9.4% rise year over year. However, FedEx has fallen short of consensus EPS estimates in half of the past six quarters. Its forward earnings multiple is 9.9 and the PEG ratio is less than the industry average. The share price has not recovered from the sell-off in July and August and is up less than 7% from the 52-week low.

During the three months that ended in August, Nike raised its revenue guidance and signed an endorsement deal with Michael Vick. The consensus forecast for that period is $1.21 per share earnings on revenue of $5.8 billion. That's up from $1.14 per share and $5.2 billion in the fiscal first quarter of last year. The long-term EPS growth forecast is 12.3% and the return on equity is 21.8%. The share price is more than 16% higher than six months ago. The stock has outperformed the broader markets in that time.

Also look for quarterly results this week from Adobe Systems (NASDAQ: ADBE), CarMax (NYSE: KMX), Carnival (NYSE: CCL), ConAgra (NYSE: CAG), Red Hat (NYSE: RHT), Scholastic (NASDAQ: SCHL) and Vail Resorts (NYSE: MTN).

Posted-In: advance auto parts American ExpressEarnings Long Ideas Short Ideas Previews Pre-Market Outlook Trading Ideas Best of Benzinga


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