Market Overview

Earnings Expectations for the Week of November 21


For a holiday-shorted week, there will still be plenty for investors and analysts to mull over on the earnings front. Quarterly results from global tech company Hewlett-Packard (NYSE: HPQ), farm and construction equipment maker Deere & Co. (NYSE: DE) and food companies Campbell Soup (NYSE: CPB), Hormel Foods (NYSE: HRL) and Tyson Foods (NYSE: TSN) will be among the most prominent reports this week.

Palo Alto, Calif.-based Hewlett-Packard is expected to report Monday that its fiscal fourth-quarter earnings came to $1.13 per share. And revenues totaled $32.1 billion for the quarter in which Meg Whitman was selected to be CEO. That is down from $1.33 and $33.3 billion in the same period of last year. The full-year forecast calls for $4.84 per share earnings (up 5.4%) on $127.2 billion in revenues (up 0.9%). Note that analysts underestimated per-share earnings in the past four quarters. EPS are predicted to grow 7.7% over the next five years. HP's PEG ratio is less than the industry average. The share price is about 15% higher than three months ago, but down more than 33% year over year. The stock has underperformed competitors Dell (NASDAQ: DELL) and IBM (NYSE: IBM) over the past six months.

During the three months that ended in October, Deere announced it would build two new plants in Brazil and that its U.S. dealers would offer Honda products. On Wednesday, the Moline, Ill.-based company is expected to post $1.43 per share earnings for the fiscal fourth quarter. That would be 25.2% higher than a year ago. Revenues for the quarter are forecast to be up 19.9% to $10.4 billion. The full-year forecast calls for $6.44 per share earnings (up 27.6%) on $29.6 billion in revenues (up 25.4%). Deere regularly tops consensus EPS estimates and has a long-term EPS growth forecast of 11.4%. Despite rising more than 7% in the past month, the share price is down about 3% compared to a year ago. The stock has narrowly underperformed Caterpillar (NYSE: CAT) over the past six months.

Analysts are looking for leading convenience food maker Campbell Soup, scheduled to report Tuesday, to post per-share earnings that are 3.6% lower year over year, or $0.79. And for the fiscal first quarter during which the company expanded its Health Request line of soups, revenues are expected to total $2.2 billion. That would be a marginal increase from a year ago. Analysts so far predict lower EPS and a slight rise in revenues in the current quarter as well. Note that EPS have fallen short of consensus estimates in just one of the past ten quarters, and then by only a penny per share. Shares have been trading mostly between $33 and $34 since early October, the same neighborhood where it started the year. But the stock has outperformed competitors Heinz (NYSE: HNZ) and Kraft Foods (NYSE: KFT) over the past three months.

Hormel Foods has recently seen some executive changes and new board members, and it announced a realignment of its businesses. When the Minnesota-based producer of meat products announces its fiscal fourth-quarter results on Tuesday, it is expected to say that earnings fell three cents per share from a year ago to $0.42. Revenues are forecast to be up marginally to $2.1 billion. For the full-year, $1.73 per share (up 12.7%) on $7.9 billion (up 9.6%) are anticipated. Hormel's earnings have not fallen short of consensus estimates in the past ten quarters. After surging to near a 52-week high in October, the share price has faced resistance at $30 in the past few weeks. Over the past six months, the stock also has underperformed Tyson Foods but outperformed the broader markets.

The consensus forecast for Tyson Foods, which selected a new board member last week, calls for $0.32 per share earnings in Monday's report. That is half the $0.64 from the fiscal fourth quarter of last year. But revenues are expected to have risen 10.2% to $8.2 billion for the quarter in which it had a ground beef recall, named a new board member and began renovating a processing plant in Iowa. Earnings fell short of analysts' estimates in only one of the past nine quarters, but then by just a penny per share. The long-term EPS growth forecast is 7.3%. The share price has increased more than 17% in the past 90 days and is once again near its 52-week high. But over the past six months, the stock has underperformed smaller competitor Smithfield Foods (NYSE: SFD).

Other companies expected to post earnings growth this week include Cracker Barrel Old Country Store (NASDAQ: CBRL), Brown Shoe (NYSE: BWS), Genesco (NYSE: GCO), Perfect World (NASDAQ: PWRD), Tech Data (NASDAQ: TECD) and Valspar (NYSE: VAL).

DSW (NYSE: DSW), Jack in the Box (NASDAQ: JACK) and Medtronic (NYSE: MDT) are expected to post EPS about the same as a year ago. Analysts anticipate per-share earnings will be lower for Analog Devices (NYSE: ADI), Collective Brands (NYSE: PSS) and Trina Solar (NYSE: TSL).

And Canadian Solar (NASDAQ: CSIQ), Pandora (NYSE: P), Suntech Power (NYSE: STP), TiVo (NASDAQ: TIVO), Yingli Green Energy (NYSE: YGE) and Zale (NYSE: ZLC) are expected to post a net loss.

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