Zacks Earnings Preview: Target, Staples, Hewlett-Packard, and Wal-Mart

May 20, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, May 20, 2013 /PRNewswire/ -- releases the list of companies likely to issue earnings surprises. This week's list includes Target (NYSE: TGT), Staples (Nasdaq: SPLS), Hewlett-Packard (NYSE: HPQ), (NYSE: CRM) and Wal-Mart (NYSE: WMT).

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Sweeping Up the Last of Q1 Earnings

The Q1 earnings season is effectively over for most of the major sectors, with Retail as the only one that still has a number of major reports still awaited.

As such, Retail has a heavy presence in this week's earnings reports, including industry heavyweights like Target (NYSE: TGT) and Staples (Nasdaq: SPLS). But we do have couple of bellwether operators from other sectors coming out with results this week, like Hewlett-Packard (NYSE: HPQ) and (NYSE: CRM). In total, we will get Q1 earnings reports from 96 companies this week, including 25 S&P 500 members. By the end of this week, we will have seen Q1 results from 490 members of the S&P 500.

Total Retail sector earnings thus far are up +5.8% from the same period last year on +1.9% higher revenues. The remaining 17 retailers out of the 47 companies in our S&P 500 Retail sector are expected to see total earnings decline by -0.5% on +2.5% higher revenues. This reflects expectations of earnings declines at Target and a few others.

Combining the Retail sector earnings for the 30 companies that have come out with the 17 still to come, the sector's total earnings in Q1 should be up +4%. This compares to earnings growth rates of +8.1% and +6.1% in 2012 Q4 and Q3, respectively. April same-store sales data for the sector has generally been on the soft side, with industry players citing colder temperatures in April as a reason for light traffic. But it could very well be that the payroll tax changes in January are finally starting to have an effect, as we saw with the Wal-Mart (NYSE: WMT) report.

We continue to grade the Q1 earnings season as between 'average' and 'below average' -- it's definitely not 'good.' That said, the overall level of 'total' quarterly earnings is at a record level.

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