CHICAGO, April 18, 2011 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes DuPont (NYSE: DD), PPG Industries (NYSE: PPG), Tempur-Pedic (NYSE: TPX), Cree Inc (Nasdaq: CREE) and Morgan Stanley (NYSE: MS).
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A Trickle Becomes a Flood
Historically the best indicators of firms likely to report positive surprises are a recent history of positive surprises and rising estimates going into the report. The Zacks Rank is also a good indicator of potential surprises. Similarly a recent history of earnings disappointments, cuts in the average estimate for the quarter in the month before the report is due and a poor Zacks rank (#4 or #5) are often red flags pointing to a potential disappointing earnings report. In the Earnings calendar below, $999.00 should be read as N.A.
Potential Positive Surprises
DuPont (NYSE: DD) is expected to report EPS of $1.37, up from $1.24 a year ago. Last time out, DD posted a 56.25% positive surprise. Over the last month, analysts have raised their expectations for this quarter by 0.26%. DD is a Zacks #2 Ranked stock.
PPG Industries (NYSE: PPG) is expected to report EPS of $1.34, up from $0.70 a year ago. Last time out, PPG posted a 10.62% positive surprise. Over the last month, analysts have raised their expectations for this quarter by 19.42%. PPG is a Zacks #1 Ranked stock.
Tempur-Pedic (NYSE: TPX) is expected to report EPS of $0.68, up from $0.44 a year ago. Last time out, TPX posted a 15.79% positive surprise. Over the last month, analysts have raised their expectations for this quarter by 17.87%. TPX is a Zacks #1 Ranked stock.
Potential Negative Surprises
Cree Inc (Nasdaq: CREE) is expected to report EPS of $0.24, down from $0.43 a year ago. Last time out, CREE posted a 7.84% disappointment. Over the last month, analysts have slashed their expectations for this quarter by 31.25%. CREE is a Zacks #5 Ranked stock.
Morgan Stanley (NYSE: MS) is expected to report EPS of $0.38, down from $0.77 a year ago. Last time out, MS posted a 22.86% positive surprise. Over the last month, analysts have cut their expectations for this quarter by 46.12%. MS is a Zacks #5 Ranked stock
Dirk Van Dijk, CFA, is the Chief Equity Strategist for Zacks.com.
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 (+2% versus +9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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