Zacks Earnings Preview: Disney, News Corp., Priceline, Whole Foods and Groupon
CHICAGO, May 6, 2013 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Disney (NYSE: DIS), News Corp. (Nasdaq: NWSA), Priceline (Nasdaq: PCLN), Whole Foods (Nasdaq: WFM), Groupon (Nasdaq: GRPN).
To see more earnings analysis, visit http://at.zacks.com/?id=3207.
Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=3567.
Q1 Earnings Season in Final Stretch
We still have plenty of Q1 earnings reports to come, but the bulk of the earnings season is now behind us, with results from 405 S&P 500 companies already out as of Friday, May 3rd. The Retail sector is the only one where more than half of the sector's total market capitalization has yet to report Q1 results.
For the remaining sectors, the reporting season has ended for 3 – Autos, Construction and Aerospace. For 6 of the 16 Zacks sectors, we have Q1 results for 95% or more of the sector's total market cap.
This week is the last major reporting week of the Q1 earnings season, with results from 625 companies, including 46 S&P 500 members. This includes industry leaders likeDisney (NYSE: DIS), News Corp. (Nasdaq: NWSA), Priceline (Nasdaq: PCLN), Whole Foods (Nasdaq: WFM), Groupon (Nasdaq: GRPN) and many others. By the end of this week, we will have Q1 earnings reports from 451 S&P 500 companies. The Retail sector will be the only group by the end of the week that will have more than half of its Q4 results still awaited (retailers typically have fiscal Q4 period-ends in January).
We continue to grade the Q1 earnings season as between 'average' and 'below average' – it's definitely neither 'good' nor 'bad.' This isn't materially different from what we have been seeing over the last few earnings seasons. What this means is that about two-thirds of the companies beat earnings expectations, but growth is essentially non-existent. A key difference relative to 2012 Q4 earnings season is the very low level of positive revenue surprises.
The Q1 Earnings Scorecard
Here is the summary scorecard for the 405 S&P 500 companies that have reported Q1 results, as of Friday May 3, 2013:
Total earnings for the 405 companies are up +2.9%, with 67.2% of the companies beating earnings expectations with a median surprise of +3.3%. Revenues are down -1.3%, with only 40.7% of the companies coming ahead of top-line expectations, with a median surprise of (negative) -0.4%.
The earnings growth rate and 'beat ratio' for these 407 are comparable to what these same companies reported in 2012 Q4 and the last few quarters. But the revenue growth rate and 'beat ratio' is lower, with the beat ratio particularly weak in the current period.
In addition to the revenue weakness, another notable aspect of the Q1 earnings season has been the soft Technology results. The sector's growth rates and 'beat ratios' are weaker than those for the S&P 500 as well as the group reported in 2012 Q4. With 83.4% of the sector's total market capitalization already out with Q1 results, total earnings for the sector are down 5.2%, with 58% of the sector companies beating earnings expectations (vs. the S&P 500 average of 67.2%). The revenue side for the sector isn't that bad (up +4.3%), which goes on to spotlight the sector's margin problems.
The aggregate earnings picture for the 97 S&P 500 reports still to come is for an earnings decline of -2.8%, which compares to +2.1% earnings growth for the same group of companies in the preceding quarter. The composite growth rate for Q1, where we combine the results of the 405 companies that are out with the 97 still to come, is for a rise of +1.7% in total earnings on -1% lower revenues. In terms of dollar earnings levels, composite earnings in Q1 total $249.9 billion, a new quarterly record, surpassing the prior high mark of $245.8 billion in Q1 2012. This will be the highest quarterly total since the current earnings cycle started back in 2009 (is that why the market is at a new all-time high as well?).
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=4988.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which 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 by going to http://at.zacks.com/?id=3568.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
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.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
SOURCE Zacks Investment Research, Inc.
More by this Source
Browse our custom packages or build your own to meet your unique communications needs.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.