Market Overview

Earnings Expectations for the Week of January 7

Earnings Expectations for the Week of January 7

The new earnings season gets underway this week, with Alcoa (NYSE: AA) on deck Tuesday and Wells Fargo (NYSE: WFC) scheduled to report fourth-quarter results on Friday. By and large, analysts expect to see year-over-year growth in per-share earnings for the quarter from both of these S&P 500 components.


This New York City-based leading aluminum producer is expected to report Tuesday afternoon that for its fourth quarter of 2012 it saw a profit of $0.06 per share. That compares with a net loss of $0.03 per share in the same period of the previous year. But note that the consensus earnings per share (EPS) forecast has slipped in the past 30 days from $0.08 per share.

Analysts on average expect fourth-quarter revenues to total $5.61 billion, which would be down more than six percent from a year ago. Revenue also declined in the previous two quarters.

The full-year forecast calls for $0.24 EPS on $23.36 billion in revenue, which would be down from $0.72 per share and $24.95 billion in 2011. This consensus EPS forecast has also fallen, from $0.26 per share some 30 days ago.

Wells Fargo

In its Friday morning report, the first of the big banks to share its fourth-quarter results is expected report earnings of $0.89 per share. That would be about 18 percent higher than in the year-ago quarter. The full-year EPS estimate of $3.35 would be up from $2.82 per share in the previous year. Wells Fargo has fallen short of consensus EPS estimates in only one of the past 10 quarters.

Fourth-quarter revenues are expected to total $21.29 billion, which would be more than three percent higher than a year ago. Analysts predict that full-year revenue will total $85.69 billion, or up from $80.95 billion a year earlier.

Revenue has increased about nine percent over the past five years, and analysts project per-share earnings to grow about nine percent over the next five years.

And Others

Monsanto (NYSE: MON). The consensus forecast calls for EPS to be up more than 37 percent year-over-year to $0.37 and sales up more than eight percent to $2.64 billion for the fiscal first quarter. Note that Monsanto posted a bigger-than-expected net loss in the previous quarter. The agricultural biotech company reports Tuesday before the markets open.

Apollo Group (NYSE: APOL). Analysts on average expect this for-profit education company to report Tuesday afternoon that its per-share earnings declined almost 30 percent to $0.90 and revenue fell more than 12 percent year-over-year to $1.03 billion. But analysts have underestimated Apollo Group's EPS in the previous ten quarters.

Constellation Brands (NYSE: STZ). This producer and distributor of alcoholic beverages is expected to report $0.55 per share earnings and sales of $751.83 million for the fiscal third quarter. That compares with $0.50 per share and $700.70 million in revenue in the same period of last year. In the previous quarter, EPS topped the consensus estimate by more than 31 percent. The company is scheduled to share its results Wednesday morning.

SUPERVALU (NYSE: SVU). This frequent target of takeover chatter is expected to post a profit of $0.06 per share while revenues slid more than five percent from the year-ago period to $7.90 billion. EPS fell well short of analysts' expectations in the previous two quarters. This supermarket operator is scheduled to share its results Thursday before the opening bell.

Others expected to report earnings growth this week include Acuity Brands (NYSE: AYI), electrical equipment maker AZZ (NYSE: AZZ), Global Payments (NYSE: GPN), Helen of Troy (NASDAQ: HELE), information services company IHS (NYSE: IHS), Lindsay (NYSE: LNN), MSC Industrial Direct (NYSE: MSM), industrial services company Team (NYSE: TISI) and WD-40 (NASDAQ: WDFC).

Analysts expect to see a net loss from cement producer Texas Industries (NYSE: TXI) and from U.K. tech company Xyratex (NASDAQ: XRTX).

The earnings crunch ramps up the following week, with fourth-quarter results due from big banks Bank of America (NYSE: BAC), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS) and J.P. Morgan (NYSE: JPM), as well as from eBay (NASDAQ: EBAY), General Electric (NYSE: GE), Intel (NYSE: INTC), Schlumberger (NYSE: SLB), UnitedHealth (NYSE: UNH) and many others.

See also: The Week Ahead: Kicking Off Earnings Season

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