Constellation Brands, Alcoa, Oracle, FedEx and IBM are part of Zacks Earnings Preview:
CHICAGO, July 1, 2013 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Constellation Brands (NYSE:STZ-Free Report), Alcoa (Nasdaq:AA-Free Report), Oracle (Nasdaq:ORCL-Free Report), FedEx (NYSE:FDX-Free Report) and IBM (NYSE:IBM-Free Report).
(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)
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.
Fed to Reclaim Spotlight
Market anxieties about the future of the Fed's QE program have eased a bit after clarifications from Fed officials that no imminent tapering decision was in the cards. Bernanke was fairly explicit in his guidance on the issue, but the bond market's reaction appears to have forced the Fed into retreat. At least that's how some of us are seeing the pronouncements from Fed officials in recent days. Did the Bond Market Stare Down the Fed?
The Fed will remain in the spotlight this holiday-shortened week, with investors evaluating each of the week's top-tier economic reports from the Fed's perspective. The most important report doesn't arrive till after the July 4th holiday, when June non-farm payrolls come out on Friday. Other major reports include the two ISM surveys, the ADP jobs report, motor vehicle sales, and construction spending.
Earnings wouldn't be the focus this week, with Constellation Brands (NYSE:STZ-Free Report) as the notable report coming out. But the earnings reporting cycle is about to take the spotlight with Alcoa's (Nasdaq:AA-Free Report) release on July 8th. The Q2 earnings season has already gotten underway, with results from Oracle (Nasdaq:ORCL-Free Report), FedEx (NYSE:FDX-Free Report) and others.
Accenture's weak guidance reconfirms what we saw in the recent Oracle report about macro issues weighing on corporate spending outlook. Importantly, it puts us on notice about what to expect fromIBM (NYSE:IBM-Free Report) and others in the coming days.
As has become customary at the start of recent quarterly earnings cycles, expectations for the Q2 earnings season remain quite low. A major driver of these low expectations is company guidance during the Q1 earnings season, which was overwhelmingly on the negative side. Total earnings for companies in the S&P 500 are expected to be down -0.3% from the same period last year on -0.5% lower revenues and almost flat margins. This is sharply down from +3.9% growth expected in the quarter in early April.
Nine of the 16 Zacks sectors are expected to show negative earnings growth in Q2. But the growth picture in Q2 is even more underwhelming when Finance is excluded from the data. Outside of Finance, total earnings for the S&P 500 would be down -4.3%. Total earnings were up +2.4% in Q1, but growth was expected to be in negative territory at this stage before that reporting season.
Finance to the Rescue
Finance wasn't a big driver of aggregate earnings growth for the S&P 500 in Q1, but takes back the lead role in Q2, with total earnings for the sector expected to be up +19.5% and estimates for the group are steadily going up. Earnings for the sector were up +7.7% in Q1, which came after many quarters of double-digit growth.
All the industries within the Finance sector like the major banks, regional banks, brokers and insurers are expected to have positive growth. But the growth picture is particularly notable for the brokerage and investment management industry players, with total earnings for the group expected to be up +38.7% in Q2 after the +2.6% gain in Q1.
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.
About Zacks
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.
Get the full Report on STZ - FREE
Get the full Report on ORCL - FREE
Get the full Report on FDX - FREE
Get the full Report on IBM - FREE
Get the full Report on AA - FREE
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.
Media Contact
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.
Share this article