Back to top

Earnings Preview

Sheraz Mian

Q3 Earnings Season Gets Underway

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Earnings Preview – Week of October 8

Q3 Earnings Season Gets Underway

Alcoa’s (AA) release after the close on Tuesday will ‘unofficially’ kick-off the third reporting season, even though ‘officially’ results have been trickling in since last month. Even though companies like FedEx (FDX), Nike (NKE), Oracle (ORCL) and quite a few others have already reported third quarter results, Alcoa’s report is typically considered as kick-starting the quarterly reporting cycle.

Alcoa’s first-to-report status notwithstanding, we have third-quarter results from 24 companies in the S&P 500 (as of Friday, October 5th). Though admittedly in the very early going at this stage, the picture emerging from these 24 results doesn’t paint a very inspiring picture.

Total earnings are down 4.7% from the same period last year and only 41.7% of the companies beat earnings expectations. This is a weaker performance than what these same companies did in each of the last five quarters. Performance on the revenue side is surprisingly not that bad for these 24 companies, with total revenues up 1.2% from the same period last year and 11 coming ahead of revenue expectations.

But the big story on the earnings front is not what has come out already, but rather what’s in store from the 476 companies still to report results. We have 9 S&P 500 companies reporting results this week, which includes, besides Alcoa, Yum! Brands (YUM), Costco (COST), JP Morgan (JPM) and Wells Fargo (WFC). Total earnings for these 476 companies are expected to drop 3.4% from the same period last year, with revenues declining 2.3%.

The actual growth rates will most likely be better than these expectations, given how company managements have refined the art of under-promising and over-delivering quarter after quarter. Just to give you an idea of how good they are at anchoring expectations, roughly two-thirds of the companies in the S&P 500 would typically beat earnings expectations in any given quarter – it was 62% in the second quarter and 65% in the first quarter.

If we do get negative earnings growth this quarter as currently expected, that will be the first decline in quarterly earnings since the earnings recovery got underway after the end of the Great Recession in 2009. The earnings weakness is quite broad-based, with half of the 16 Zacks sectors expected to have negative earnings growth.

As was the case in the second quarter, the Energy and Basic Material sectors are the weakest, with earnings declines of 23.5% and 25.5%, respectively. Energy and Basic Materials earnings were down 16% and 20.5% respectively in the second quarter, when total earnings for the S&P 500 as a whole were up 4%.

Only two sectors are expected to have double-digit earnings growth – Finance (up 17.3%) and Construction (up 37.6%). Construction doesn’t carry much weight in the aggregate picture as it contributes less than 0.5% of total S&P 500 earnings, but the Finance strength is making the aggregate growth rate look a lot better than it otherwise would be. Excluding Finance, total S&P 500 earnings in the third quarter would be down 7.1%.

Monday - 10/8

  • Nothing major on the economic or earnings calendars today.

Tuesday - 10/9

  • We will get results from Alcoa (AA) and Yum! Brands (YUM) after the close. Given Yum’s outsized China exposure, it will be interesting to hear to what they have to say about the growth outlook for that key market.

Wednesday - 10/10

  • We will get the Fed’s Beige Book report in the afternoon.
  • Costco (COST) and Progressive Corp (PGR) will report in the morning, while Ruby Tuesday (RT) will report after the close.

Thursday - 10/11

  • Weekly Jobless Claims will be coming out this morning. It will be interesting to see if the jobless claims numbers will build on the preceding week’s favorable momentum.
  • Safeway (SWY) and Fastenal (FAST) are the key earnings reports in the morning.  

Friday - 10/12

  • We will get the September Producer Price Index (PPI) in the morning and the preliminary Michigan sentiment survey after the market opens.
  • JP Morgan (JPM) and Wells Fargo (WFC) will be reporting in the morning.


Here is a list of the 34 companies reporting this week:

Company Ticker Current Qtr Year-Ago Qtr Last EPS Surprise % Report Day Time
TORTOISE CAP RS TTO 0.96 -0.07 -120 Monday BTO
ANGIODYNAMICS ANGO 0.09 0.08 11.11 Monday AMC
E2OPEN INC EOPN -0.06 999 N/A Monday N/A
YUM! BRANDS INC YUM 0.97 0.83 -4.29 Tuesday AMC
GIVEN IMAGING GIVN 0.17 0.13 6.67 Tuesday AMC
MISTRAS GROUP MG 0.14 0.11 -16.67 Tuesday AMC
ALCOA INC AA 0 0.14 0 Tuesday AMC
EXFO INC EXFO -0.09 0.03 -200 Tuesday AMC
COSTCO WHOLE CP COST 1.3 1.08 0 Wednesday BTO
HELEN OF TROY HELE 0.86 0.74 -15.91 Wednesday BTO
PROGRESSIVE COR PGR 0.26 0.24 -25.93 Wednesday BTO
HOST HOTEL&RSRT HST 0.21 0.16 3.03 Wednesday BTO
MATERIAL SCI CP MASC 0.2 0.29 58.33 Wednesday BTO
ADTRAN INC ADTN 0.17 0.56 0 Wednesday BTO
MISSION WEST MSW 0.13 0.13 -21.43 Wednesday AMC
VOXX INTL CP VOXX 0.13 0.16 7.69 Wednesday AMC
RICHARDSON ELEC RELL 0.06 0.05 100 Wednesday AMC
RUBY TUESDAY RT 0.06 0.05 -16 Wednesday AMC
AUGME TECH INC AUGT -0.06 -0.08 0 Wednesday BTO
OCZ TECHNOLOGY OCZ -0.18 -0.04 -46.15 Wednesday AMC
HUNT (JB) TRANS JBHT 0.67 0.57 0 Thursday AMC
BANK OZARKS OZRK 0.55 0.57 5.77 Thursday AMC
SAFEWAY INC SWY 0.43 0.38 2.04 Thursday BTO
FASTENAL FAST 0.37 0.33 2.7 Thursday BTO
ZEP INC ZEP 0.35 0.24 5.41 Thursday N/A
WINNEBAGO WGO 0.17 0.12 8.33 Thursday BTO
API TECH CORP ATNY -0.01 -0.04 80 Thursday BTO
JPMORGAN CHASE JPM 1.2 1.02 55.13 Friday BTO
WELLS FARGO-NEW WFC 0.87 0.72 1.23 Friday BTO
INFOSYS LTD INFY 0.74 0.72 0 Friday BTO
WEBSTER FINL CP WBS 0.45 0.45 0 Friday BTO
IGATE CORP IGTE 0.34 0.14 -40.74 Friday BTO
KMG CHEMICALS KMG 0.33 0.1 0 Friday BTO
DIAMONDROCK HOS DRH 0.19 0.16 0 Friday BTO

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%