CHICAGO, Jan. 7, 2014 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Alcoa (NYSE: AA-Free Report), Monsanto (NYSE: MON-Free Report), Family Dollar (NYSE: FDO-Free Report), J.P. Morgan (NYSE: JPM-Free Report) and Wells Fargo (NYSE: WFC-Free Report).
To see more earnings analysis, visit http://at.zacks.com/?id=3207.
Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here.
Jobs in Focus as Q4 Earnings Reports Trickle In
The focus this week is justifiably on the labor market data, particularly the government jobs report coming out on Friday. The overall tone of recent U.S. economic data has been favorable, prompting positive revisions to Q4 GDP growth. Given this underlying momentum, it is perhaps reasonable to look for a positive surprise to the expected 190K 'headline' jobs reading on Friday. Also of interest in the economic docket will be minutes of the Fed's December that resulted in the 'Taper' announcement.
The labor market will no doubt be the big subject this week, but the drumbeat for the start of the 2013 Q4 earnings season will also get underway this week. We only have 6 S&P 500 companies reporting results this week, including Alcoa (NYSE: AA-Free Report), Monsanto (NYSE: MON-Free Report), and Family Dollar (NYSE: FDO-Free Report), with the full list of companies reporting in the week totaling about 40. The Q4 earnings season will get in the spotlight the following week when J.P. Morgan (NYSE: JPM-Free Report) and Wells Fargo (NYSE: WFC-Free Report) will report results.
The 6 S&P 500 companies reporting this week aren't (officially) the first Q4 earning releases. Companies with fiscal quarters ending in November start reporting in mid-December and get counted as part of the Q4 earnings season. By this definition, we already have seen reports from 18 S&P 500 members.
Here is the Scorecard for the 18 S&P 500 companies that have already reported Q4 results, as of Friday, January 3, 2014. Total earnings for these 18 companies (not EPS, median or otherwise) are up +3.2% from the same period last year, with a 'beat ratio' of 55.6% and a median surprise of +1.5%. Total revenues are up +5.4%, with an impressive revenue 'beat ratio' of 66.7% and a median surprise of +1.3%.
In comparative terms, the earnings growth for these 18 companies is below what these same companies reported in recent quarters, while performance on the revenue front compares favorably to the recent past.
But the Q4 earnings season's story isn't about the few companies that have reported, but rather about the still-to-come reports. To that point, the 'composite' picture for Q4, where we combine the results from the 18 companies that have reported already with the 488 still to come, is for growth rate of +6.3%. As has been the case at the start of recent quarterly earnings cycles, the current +6.3% growth rate for Q4 represents a sharp drop over the last three months
About the Zacks Rank
Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have significantly underperformed the S&P 500 (+3% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Click to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
SOURCE Zacks Investment Research, Inc.