Market Overview

Earnings Highlights for the Week Ahead


This week, quarterly results are due from Campbell Soup (NYSE: CPB) and Polo Ralph Lauren (NYSE: RL), which are expected to report that earnings are lower than they were a year ago. From AutoZone (NYSE: AZO), Big Lots (NYSE: BIG), DSW (NYSE: DSW), H.J. Heinz (NYSE: HNZ), Hormel Foods (NYSE: HRL), Medtronic (NYSE: MDT), NetApp (NASDAQ: NTAP) and Tiffany (NYSE: TIF) though, year-over-year earnings growth is anticipated. And analysts are expecting losses for the quarter from Jamba Juice (NASDAQ: JMBA), Take-Two Interactive (NASDAQ: TTWO), TiVo (NASDAQ: TIVO) and Zale (NYSE: ZLC).

The following four reports could turn out to be the week's highlights, as expectations are high for these companies' earnings and revenue growth, as well as their long-term earnings prospects.

Tech Data (NASDAQ: TECD)

This computer wholesaler will report its fiscal first-quarter 2012 results before the opening bell tomorrow, May 22. Analysts predict that its earnings will have grown 16.2% from a year ago to $1.05 per share. And its revenues are expected to have grown 13.8% to $6.4 billion. Similar growth is also expected in the second quarter; that is, earnings up 18% and revenues up 13.8%. Tech Data's earnings have topped estimates in recent quarters, and it has a long-term earnings per share growth forecast of 10%. Analysts on average recommend buying TECD, and they have a mean price target on the stock of $55.93 per share. Tech Data's share price was $53.57 at the end of last week, which represents 21.7% growth since the beginning of the year.

Applied Materials (NASDAQ: AMAT)

The world's largest maker of semiconductor production equipment will post its fiscal second-quarter 2011 results on Tuesday, May 23. Its per-share earnings are expected to come to $0.37 per share, which is an increase of 40.5% from a year ago. Its revenues are forecast to have grown 20.5% to total $2.8 billion. Looking ahead, analysts also expect sequential and year-over-year growth of both earnings and revenues in the third quarter. Applied Materials earnings have grown in each of the past five quarters, exceeding consensus estimates each time. The long-term earnings per share growth forecast is 11%. The stock's mean price target of $17.44 per share offers it plenty of room to run from the current share price of $14.09. Note that the share price has pulled back 7.6% in the past month.


Fiscal third-quarter 2011 results from the largest wholesale club operator in the United States are on tap for Wednesday morning. The consensus forecast calls for per-share earnings of $0.77 on revenues of $20.1 billion. That's up from earnings of $0.66 per share and $17.8 billion in revenues in the same period of last year. Looking ahead to the full year, analysts so far expect to see earnings growth of 12.8% and an 11.6% increase in revenues. In the past few quarters, analysts' estimates have come within a penny or so of Costco's per-share earnings. The long-term earnings per share growth forecast is 13.1%. The stock has had a consensus Buy rating for more than 90 days. Year to date, Costco's stock has outperformed the broader markets, as well as Walmart (NYSE: WMT), the operator of rival Sam's Club.

Omnivision Technologies (NASDAQ: OVTI)

Omnivision manufactures semiconductor image sensors, and the company is scheduled to report its fiscal fourth-quarter 2011 earnings after the markets close on Thursday. Analysts are looking for earnings to have jumped 72.3% from a year ago to $0.65 per share. Revenue is expected to come in at $254.5 million, which is an annual increase of 61.9%. The full-year forecast calls for $2.47 per share earnings (up 76.1%) on revenue of $952.6 million (up 58.0%). Note that analysts have underestimated Omnivision's earnings in recent quarters; the beat was by 44% in the third quarter. The long-term earnings per share growth forecast is 15%. The consensus recommendation is to buy OVTI, and analysts have a mean price target of $40.82 per share on the stock. The share price was $35.54 at the end of last week and is up 20% since the beginning of the year.

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