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We are still a couple of weeks away from the end of the March quarter, but the Q1 earnings season has gotten underway already. The four S&P 500 members that have reported results like Oracle (ORCL - Free Report) , Adobe Systems (ADBE - Free Report) and others have come out with their February fiscal quarter results, which form part of our Q1 earnings tally. We have another 8 index members reporting results this week, including bellwethers like FedEx (FDX - Free Report) , Nike (NKE - Free Report) , and Accenture (ACN - Free Report) and others.
The Oracle and Adobe reports have been very strong, with both companies showing plenty of momentum in their businesses, which likely helps frame earnings expectations for the Tech sector. This week’s report from Accenture should shed further light on this key sector, the strongest stock price performer in the year-to-date period.
These early reports notwithstanding, the reporting cycle doesn’t take the spotlight till about mid-April, as the chart below of reporting calendar for the S&P 500 index clearly shows.
This Week’s Key Reports
FedEx (FDX - Free Report) – FedEx reports after the market’s close on Tuesday, March 21st, with the company expected to earn $2.65 per share on $14.98 billion in revenues, up +5.7% and +18% from the year-earlier level, respectively. The company missed expectations in the last earnings report on December 20th, which has weighed on the stock since then. The stock is down -2% since the last earnings report, underperforming the Zacks Transportation sector (up +1.3%) and the S&P 500 (up +4.8%). While FedEx’s surprise history has not been consistent, the stock always responds to the earnings report in a big way.
Nike (NKE - Free Report) – Nike reports the same day as FedEx after the market’s close on Tuesday, March 21st. The company is expected to earn $0.52 per share on $8.45 billion in revenues, down -4.2% on +5.2% higher revenues from the year-earlier period, respectively. The stock responded positively to the last earnings report on December 20th, but has been a laggard over the past year (down -8.9%) relative to the Consumer Discretionary sector (up +13.8%) and the S&P 500 index (+16%). Competitive challenges from the likes of Under Armour and Adidas and the impact of problems in the retail chain on the company’s inventory situation have been the key issues in the Nike story. We should keep in mind, however, that while the Nike stock has been a laggard over the past year, Under Armour has been an even been bigger laggard.
Accenture (ACN - Free Report) – Accenture, the tech consulting firm, reports results before the market’s open on Thursday, March 23rd. The company is expected to earn $1.30 per share on $8.34 billion in revenues, down -3% on +5% higher revenues from the year-earlier period, respectively. The stock responds strongly to the earnings report – it was down in response to the last earnings report on December 21st but has done better than the S&P 500 index since the last earnings report. The key significance of the Accenture report is management’s commentary about technology spending trend, which offers read-throughs for IBM (IBM) and broader Technology space.
Total Q1 earnings are expected to be up +6.5% from the same period last year on +6.4% higher revenues. This would follow +7.3% earnings growth in 2016 Q4 on +4.7%, the highest growth pace in all most two years.
Estimates for Q1 came down as the quarter unfolded, with the current +6.5% growth down from +10.4% at the end of December. The chart below shows how Q1 earnings growth expectations have evolved over the last three months.
Please note that while Q1 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compares favorably to other periods, particularly in the first half of last year and all of 2015. In other words, Q1 estimates have come down, but they haven’t come down by as much.
The table below shows the summary picture for Q1, contrasted with what was actually achieved in Q4.
Please note that the Q1 earnings season would follow the strong showing on the earnings front in the preceding reporting cycle. Not only did 2016 Q4 growth reach the highest in two years, but total earnings for the quarter also reached a new quarterly record. The strong Q4 performance came after the first positive earnings growth in 2016 Q3, having declined in each of the preceding 5 quarters, as the chart below of year-over-year earnings growth for the S&P 500 index shows.
Expectations Beyond Q1
The chart below shows the Q1 earnings growth contrasted with what is expected in the following three quarters and actual results in the preceding 5 quarters. As you can see in the chart below, the growth pace is expected to ramp up in 2017.
The market is reflecting this improved earnings backdrop as the chart below of the S&P 500 relative to forward 12-month Zacks Consensus estimates shows.
Please note that the earnings backdrop has not changed in any meaningful way since the November elections, notwithstanding the market’s strong gains since then. The only exception to this comment is the Finance sector whose earnings outlook has improved as a result of the uptrend in interest rates since November 8th. It is reasonable to expect that earnings estimates will move favorably once the new administration’s growth-friendly policies get enacted. For now, however, estimates are following the long-established trend of coming down.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see specific recommendations to help you pick today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Here is a list of the 77 companies including 8 S&P 500 members reporting this week.
Company
Ticker
Current Qtr
Year-Ago Qtr
Last EPS Surprise %
Report Day
Time
ASURE SOFTWARE
ASUR
0.1
-0.08
42.86%
Monday
BTO
DESTINATION XL
DXLG
0
-0.02
16.67%
Monday
BTO
JAMBA INC
JMBA
-0.04
-0.28
-20.00%
Monday
BTO
MOVADO GRP INC
MOV
0.18
0.4
28.17%
Monday
BTO
SHENANDOAH TELE
SHEN
-0.21
0.24
-28.57%
Monday
BTO
LENNAR CORP -A
LEN
0.56
0.63
5.51%
Tuesday
BTO
GENL MILLS
GIS
0.71
0.65
-3.41%
Tuesday
BTO
FRANCESCAS HLDG
FRAN
0.37
0.36
44.44%
Tuesday
BTO
COCA-COLA EU PT
CCE
0.46
0.53
2.78%
Tuesday
BTO
NEOGEN CORP
NEOG
0.27
0.22
3.57%
Tuesday
BTO
CHEETAH MBL-ADR
CMCM
N/A
0.1
-66.67%
Tuesday
BTO
FIFTH STREET AM
FSAM
0.19
0.18
33.33%
Tuesday
BTO
CANADIAN SOLAR
CSIQ
0.22
1.05
0.00%
Tuesday
BTO
NIKE INC-B
NKE
0.52
0.55
16.28%
Tuesday
AMC
FEDEX CORP
FDX
2.65
2.51
-3.78%
Tuesday
AMC
HEALTHEQUITY
HQY
0.05
0.05
11.11%
Tuesday
AMC
DULUTH HOLDINGS
DLTH
0.33
0.37
57.14%
Tuesday
AMC
STEELCASE INC
SCS
0.23
0.22
9.68%
Tuesday
AMC
AAR CORP
AIR
0.38
0.26
3.57%
Tuesday
AMC
IMPRIMIS PHARMA
IMMY
-0.28
-0.53
N/A
Tuesday
AMC
SPARK NETWORKS
LOV
N/A
-0.05
100.00%
Tuesday
AMC
PARNELL PHARMA
PARNF
-0.08
-0.45
-350.00%
Tuesday
AMC
SILVER WHEATON
SLW
0.17
0.14
-13.64%
Tuesday
AMC
ATENTO SA
ATTO
0.16
0.31
-13.04%
Tuesday
AMC
PETROBRAS-ADR C
PBR
0.18
-0.21
33.33%
Tuesday
AMC
XCEL BRANDS INC
XELB
0.04
0.04
-88.89%
Tuesday
AMC
AMEC FOSTER WHL
AMFW
N/A
N/A
N/A
Tuesday
N/A
LANDS END INC
LE
0.3
0.71
-83.33%
Tuesday
N/A
AMAYA INC
AYA
0.6
0.4
10.53%
Wednesday
BTO
ACUSHNET HLDGS
GOLF
0.05
N/A
-833.33%
Wednesday
BTO
EVINE LIVE INC
EVLV
0
0.01
-25.00%
Wednesday
BTO
WINNEBAGO
WGO
0.45
0.35
71.43%
Wednesday
BTO
ON TRACK INNOV
OTIV
0
-0.03
133.33%
Wednesday
BTO
PERRY ELLIS INT
PERY
0.6
0.35
43.75%
Wednesday
BTO
QIWI PLC-ADR
QIWI
0.2
0.19
7.41%
Wednesday
BTO
TENCENT HOLDING
TCEHY
N/A
0.13
N/A
Wednesday
BTO
TECOGEN INC
TGEN
N/A
-0.04
125.00%
Wednesday
BTO
PVH CORP
PVH
1.22
1.52
7.88%
Wednesday
AMC
FRANCO NV CP
FNV
0.2
0.15
25.00%
Wednesday
AMC
ASCENDIS PHARMA
ASND
-0.61
-0.54
-14.29%
Wednesday
AMC
HERMAN MILLER
MLHR
0.33
0.46
-1.82%
Wednesday
AMC
CENTENNIAL RES
CDEV
0.04
N/A
N/A
Wednesday
AMC
TRANSATL PETROL
TAT
-0.01
-0.62
-125.00%
Wednesday
AMC
EHI CAR SERVICE
EHIC
N/A
-0.03
N/A
Wednesday
AMC
FIVE BELOW INC
FIVE
0.89
0.77
11.11%
Wednesday
AMC
CK HUTCHISN HLD
CKHUY
N/A
N/A
N/A
Wednesday
N/A
KINGFISHER -ADR
KGFHY
N/A
N/A
N/A
Wednesday
N/A
CONAGRA BRANDS
CAG
0.45
0.68
8.89%
Thursday
BTO
ACCENTURE PLC
ACN
1.3
1.34
6.04%
Thursday
BTO
ADV ACCELERATOR
AAAP
-0.19
-0.1
-100.00%
Thursday
BTO
PIERIS PHARMACT
PIRS
-0.13
-0.07
-7.69%
Thursday
BTO
COMMERCIAL METL
CMC
0.12
0.15
-41.18%
Thursday
BTO
GALMED PHARMA
GLMD
N/A
-0.29
8.11%
Thursday
BTO
CANCER GENETICS
CGIX
-0.2
-0.48
17.86%
Thursday
BTO
BIOLINE RX LTD
BLRX
-0.08
-0.07
-14.29%
Thursday
BTO
HANWHA Q CELLS
HQCL
0.05
0.33
138.10%
Thursday
BTO
SCHOLASTIC CORP
SCHL
-0.27
-0.06
3.65%
Thursday
BTO
MICRON TECH
MU
0.77
-0.05
16.67%
Thursday
AMC
LONESTAR RESRCS
LONE
-0.13
N/A
-512.50%
Thursday
AMC
CYMABAY THERAPT
CBAY
-0.3
-0.26
19.35%
Thursday
AMC
BASIC EGY SVCS
BAS
-1.1
-99.99
6.94%
Thursday
AMC
OXFORD INDS INC
OXM
0.91
1.09
22.22%
Thursday
AMC
SHOE CARNIVAL
SCVL
0.03
0.21
0.00%
Thursday
AMC
UPLAND SOFTWARE
UPLD
-0.12
-0.02
141.18%
Thursday
AMC
JAGGED PEAK EGY
JAG
0.01
N/A
N/A
Thursday
AMC
VERASTEM INC
VSTM
N/A
-0.32
12.50%
Thursday
AMC
NOVABAY PHARMAC
NBY
-0.12
-1.26
N/A
Thursday
AMC
NEOVASC INC
NVCN
N/A
-0.11
-100.00%
Thursday
AMC
KB HOME
KBH
0.15
0.14
8.11%
Thursday
AMC
GAMESTOP CORP
GME
2.29
2.4
4.26%
Thursday
AMC
SPORTSMANS WRHS
SPWH
0.27
0.27
0.00%
Thursday
AMC
CELYAD-ADR
CYAD
N/A
N/A
N/A
Thursday
N/A
KLONDEX MINES
KLDX
N/A
0.05
33.33%
Thursday
N/A
SANCHEZ PRODUCT
SPP
-1.17
-19.95
N/A
Friday
BTO
FINISH LINE-CLA
FINL
0.71
0.83
-33.33%
Friday
BTO
REX AMERICAN RS
REX
N/A
0.54
13.33%
Friday
BTO
SMITHS GRP PLC
SMGZY
N/A
N/A
N/A
Friday
N/A
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Previewing the Q1 Earnings Season
We are still a couple of weeks away from the end of the March quarter, but the Q1 earnings season has gotten underway already. The four S&P 500 members that have reported results like Oracle (ORCL - Free Report) , Adobe Systems (ADBE - Free Report) and others have come out with their February fiscal quarter results, which form part of our Q1 earnings tally. We have another 8 index members reporting results this week, including bellwethers like FedEx (FDX - Free Report) , Nike (NKE - Free Report) , and Accenture (ACN - Free Report) and others.
The Oracle and Adobe reports have been very strong, with both companies showing plenty of momentum in their businesses, which likely helps frame earnings expectations for the Tech sector. This week’s report from Accenture should shed further light on this key sector, the strongest stock price performer in the year-to-date period.
These early reports notwithstanding, the reporting cycle doesn’t take the spotlight till about mid-April, as the chart below of reporting calendar for the S&P 500 index clearly shows.
This Week’s Key Reports
FedEx (FDX - Free Report) – FedEx reports after the market’s close on Tuesday, March 21st, with the company expected to earn $2.65 per share on $14.98 billion in revenues, up +5.7% and +18% from the year-earlier level, respectively. The company missed expectations in the last earnings report on December 20th, which has weighed on the stock since then. The stock is down -2% since the last earnings report, underperforming the Zacks Transportation sector (up +1.3%) and the S&P 500 (up +4.8%). While FedEx’s surprise history has not been consistent, the stock always responds to the earnings report in a big way.
Nike (NKE - Free Report) – Nike reports the same day as FedEx after the market’s close on Tuesday, March 21st. The company is expected to earn $0.52 per share on $8.45 billion in revenues, down -4.2% on +5.2% higher revenues from the year-earlier period, respectively. The stock responded positively to the last earnings report on December 20th, but has been a laggard over the past year (down -8.9%) relative to the Consumer Discretionary sector (up +13.8%) and the S&P 500 index (+16%). Competitive challenges from the likes of Under Armour and Adidas and the impact of problems in the retail chain on the company’s inventory situation have been the key issues in the Nike story. We should keep in mind, however, that while the Nike stock has been a laggard over the past year, Under Armour has been an even been bigger laggard.
Accenture (ACN - Free Report) – Accenture, the tech consulting firm, reports results before the market’s open on Thursday, March 23rd. The company is expected to earn $1.30 per share on $8.34 billion in revenues, down -3% on +5% higher revenues from the year-earlier period, respectively. The stock responds strongly to the earnings report – it was down in response to the last earnings report on December 21st but has done better than the S&P 500 index since the last earnings report. The key significance of the Accenture report is management’s commentary about technology spending trend, which offers read-throughs for IBM (IBM) and broader Technology space.
ConAgra (CAG - Free Report) , General Mills (GIS - Free Report) and Micron Technology (MU - Free Report) are some of the other notable reports this week.
Expectations for Q1
Total Q1 earnings are expected to be up +6.5% from the same period last year on +6.4% higher revenues. This would follow +7.3% earnings growth in 2016 Q4 on +4.7%, the highest growth pace in all most two years.
Estimates for Q1 came down as the quarter unfolded, with the current +6.5% growth down from +10.4% at the end of December. The chart below shows how Q1 earnings growth expectations have evolved over the last three months.
Please note that while Q1 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compares favorably to other periods, particularly in the first half of last year and all of 2015. In other words, Q1 estimates have come down, but they haven’t come down by as much.
The table below shows the summary picture for Q1, contrasted with what was actually achieved in Q4.
Please note that the Q1 earnings season would follow the strong showing on the earnings front in the preceding reporting cycle. Not only did 2016 Q4 growth reach the highest in two years, but total earnings for the quarter also reached a new quarterly record. The strong Q4 performance came after the first positive earnings growth in 2016 Q3, having declined in each of the preceding 5 quarters, as the chart below of year-over-year earnings growth for the S&P 500 index shows.
Expectations Beyond Q1
The chart below shows the Q1 earnings growth contrasted with what is expected in the following three quarters and actual results in the preceding 5 quarters. As you can see in the chart below, the growth pace is expected to ramp up in 2017.
The market is reflecting this improved earnings backdrop as the chart below of the S&P 500 relative to forward 12-month Zacks Consensus estimates shows.
Please note that the earnings backdrop has not changed in any meaningful way since the November elections, notwithstanding the market’s strong gains since then. The only exception to this comment is the Finance sector whose earnings outlook has improved as a result of the uptrend in interest rates since November 8th. It is reasonable to expect that earnings estimates will move favorably once the new administration’s growth-friendly policies get enacted. For now, however, estimates are following the long-established trend of coming down.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see specific recommendations to help you pick today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Here is a list of the 77 companies including 8 S&P 500 members reporting this week.