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Earnings Preview

Sheraz Mian

Earnings Season Into High Gear

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Earnings Preview – Week of October 15

Earnings Season Into High Gear


The third quarter reporting season is underway and we have results from 35 companies in the S&P 500 already (as of Friday, October 12th). We get into high gear this week, with 200 companies reporting results, including 80 from the S&P 500. We will be in much better shape to comment on this reporting season by the end of the week, as by then we will have seen results from more than one-fifth of the S&P 500 members.

The strong-looking results from J.P. Morgan (JPM) and Wells Fargo (WFC) notwithstanding, the picture emerging from these 35 results doesn’t paint a very inspiring picture. Largely due to the strong growth performance by these two banking leaders, total earnings for the 35 companies that have already reported results are up 7.4% from the same period last year, with 54.3% of the companies beating earnings expectations.

But all of that growth is coming from J.P. Morgan and Wells Fargo. Excluding the contribution from Finance (basically these two banks at this stage), total earnings growth turns negative (down 3.4% from the same period last year).

Performance on the revenue side is surprisingly not that bad for these companies, even after we exclude J.P. Morgan and Wells Fargo, with total (ex-Finance) revenues up 3% from the same period last year and 43.3% of the companies beating revenue expectations.

But the big story on the earnings front is not what have come out already, but rather what’s in store from the 465 companies still to report results in the coming days. We have 80 S&P 500 companies reporting results this week, including such bellwether names as Google (GOOG), IBM (IBM), Coke (KO), Johnson & Johnson (JNJ), Citi (C), Bank of America (BAC) and many others.

Total earnings for these 465 companies are expected to drop 4.3% from the same period last year, with revenues declining 2.3%. Excluding Finance, which is one of only two sectors to produce double-digit earnings growth this quarter (Construction is the other), total earnings growth for the still-to-report companies is a decline of 7.1%.

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, it 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 21.5% and 24.5%, respectively. Energy and Basic Materials earnings were down 15.7% and 16.8%, respectively, in the second quarter, when total earnings for the S&P 500 as a whole were up 4.4%.

For a complete review of the week’s earnings, check out our Earnings Trends feature.

Monday - 10/15

  • We will get the September Retail Sales numbers and the October Empire State regional manufacturing survey in the morning, with both measures expected to modestly improve from the preceding month’s level. Retail Sales are expected to increase 1% on a ‘headline’ basis and 0.9% excluding Autos, up from August’s 0.9% and 0.8% gains, respectively.
  • On the earnings front, we will get results from Citigroup and Gannett (GCI), the publisher of USA Today and many other dailies. Zacks ESP (“Earnings Surprise Prediction”), our proprietary leading indicator of earnings surprises, is showing Gannett coming out with a 1.9% positive earnings surprise.

Tuesday - 10/16

  • We will get the September CPI and Industrial Production numbers in the morning, while the October Home Builder’s Index comes out after the market’s open. The Industrial Production report is expected to reverse August’s 1.2% decline by showing 0.2% increase.  
  • We have the first really busy day of this reporting season, with a number of major companies reporting results. We will get results from Coca Cola, J&J and Goldman Sachs (GS) before the open, while Intel (INTC), IBM and CSX Corp (CSX) will report after the close.
  • Based on Zacks ESP, Goldman, Intel, and IBM are expected to come out with positive earnings surprises of 1.8%, 3.9%, and 2.6%, while CSX is likely to miss expectations.

Wednesday - 10/17

  • We will get the September Housing Starts, with expectations at 773K vs. 750K in August.
  • Bank of America, PepsiCo (PEP) and Halliburton (HAL) will report in the morning, while American Express (AXP) and eBay (EBAY) will report after the close.
  • Zacks ESP shows that Halliburton and American Express will come short of earnings expectations.

Thursday - 10/18

  • Weekly Jobless Claims will be coming out this morning. It will be interesting to see if we get a reversal of the sharp drop in claims last week, which reportedly was caused by missing data from one state.
  • We will get Morgan Stanley (MS), Verizon (VZ) and Travelers (TRV) as the major reports in the morning, while Google and Microsoft (MSFT) will be reporting after the close.
  • The Zacks ESP for Travelers is showing a positive 8.6% surprise, while Google, Verizon and Microsoft are expected to miss expectations.  

Friday - 10/19

  • We will get the September Existing Home Sales numbers after the market opens, with expectations of little change from the preceding month’s 4.8 million level.
  • General Electric (GE), McDonalds (MCD) and Baker Hughes (BHI) are among the major earnings reports this morning.


Here is a list of the 200 companies reporting this week, including 80 S&P 500 members:

Company Ticker Current Qtr Year-Ago Qtr Last EPS Surprise % Report Day Time
CITIGROUP INC C 0.97 1.23 7.95 Monday BTO
GANNETT INC GCI 0.54 0.44 5.66 Monday BTO
ICU MEDICAL INC ICUI 0.69 0.65 5 Monday AMC
JOES JEANS INC JOEZ 0 -0.01 100 Monday AMC
PACKAGING CORP PKG 0.56 0.43 6.52 Monday AMC
SCHWAB(CHAS) SCHW 0.17 0.18 11.11 Monday BTO
WD 40 CO WDFC 0.7 0.61 -6.56 Monday AMC
APOLLO GROUP APOL 0.49 1.02 25 Tuesday AMC
BANCO LATINOAME BLX 0.59 0.44 8.93 Tuesday AMC
CATHAY GENL BCP CATY 0.33 0.28 3.13 Tuesday AMC
COCA COLA CO KO 0.5 0.51 2.52 Tuesday BTO
COMMERCE BANCSH CBSH 0.77 0.76 16.67 Tuesday BTO
CREE INC CREE 0.18 0.17 23.08 Tuesday AMC
CSX CORP CSX 0.43 0.43 4.26 Tuesday AMC
DOMINOS PIZZA DPZ 0.41 0.35 2.17 Tuesday BTO
FOREST LABS A FRX 0.02 0.91 -16 Tuesday BTO
FORTINET INC FTNT 0.11 0.11 -20 Tuesday AMC
FULTON FINL FULT 0.2 0.2 0 Tuesday AMC
GOLDMAN SACHS GS 2.22 -0.84 56.14 Tuesday BTO
GRAINGER W W GWW 2.91 2.51 0 Tuesday BTO
INTEL CORP INTC 0.5 0.65 7.69 Tuesday AMC
INTERACTIVE BRK IBKR 0.33 0.5 -22.73 Tuesday AMC
INTL BUS MACH IBM 3.61 3.28 2.63 Tuesday AMC
INTUITIVE SURG ISRG 3.48 3.05 6.23 Tuesday AMC
IRONWOOD PHARMA IRWD 0.15 -0.21 -18.75 Tuesday BTO
JOHNSON & JOHNS JNJ 1.21 1.24 0.78 Tuesday BTO
LINEAR TEC CORP LLTC 0.46 0.48 -4.35 Tuesday AMC
MANHATTAN ASOC MANH 0.61 0.59 22.81 Tuesday AMC
MARTEN TRANS MRTN 0.3 0.29 3.03 Tuesday AMC
MATTEL INC MAT 0.99 0.86 33.33 Tuesday BTO
MERCANTILE BANK MBWM 0.34 0.3 33.33 Tuesday BTO
OMNICOM GRP OMC 0.73 0.72 0.99 Tuesday BTO
PINNACLE FIN PT PNFP 0.3 0.21 9.52 Tuesday AMC
PNC FINL SVC CP PNC 1.61 1.55 14.55 Tuesday BTO
RENASANT CORP RNST 0.26 0.25 8.7 Tuesday AMC
SONIC CORP SONC 0.24 0.2 9.09 Tuesday AMC
STANLEY FURN CO STLY -0.06 -0.12 -25 Tuesday AMC
STATE ST CORP STT 0.96 0.96 2.02 Tuesday BTO
UNITEDHEALTH GP UNH 1.3 1.17 6.72 Tuesday BTO
UTD RENTALS INC URI 1.11 0.92 8.2 Tuesday AMC
WINTRUST FINL WTFC 0.56 0.65 10.64 Tuesday AMC
WOLVERINE WORLD WWW 0.72 0.82 -6.82 Tuesday BTO
ABBOTT LABS ABT 1.28 1.18 0.82 Wednesday BTO
ALBEMARLE CORP ALB 1.09 1.28 0.81 Wednesday AMC
ALIGN TECH INC ALGN 0.29 0.27 21.43 Wednesday AMC
AMER EXPRESS CO AXP 1.09 1.03 4.55 Wednesday AMC
AMPHENOL CORP-A APH 0.89 0.81 2.38 Wednesday BTO
ASML HOLDING NV ASML 0.86 1.14 0 Wednesday BTO
ASTORIA FINL CP AF 0.13 0.12 0 Wednesday AMC
BADGER METER BMI 0.47 0.46 -3.7 Wednesday BTO
BANK OF AMER CP BAC 0 0.28 26.67 Wednesday BTO
BANK OF NY MELL BK 0.54 0.53 14 Wednesday BTO
BLACKROCK INC BLK 3.28 2.83 2.31 Wednesday BTO
BOSTON PRIV FIN BPFH 0.17 0.13 0 Wednesday AMC
CHECK PT SOFTW CHKP 0.73 0.68 -1.39 Wednesday BTO
COMERICA INC CMA 0.65 0.62 22.58 Wednesday BTO
CORE LABS NV CLB 1.1 0.89 -0.87 Wednesday AMC
COVANTA HOLDING CVA 0.25 0.24 25 Wednesday AMC
CROWN HLDGS INC CCK 1 1.01 0 Wednesday AMC
CVB FINL CVBF 0.16 0.21 9.52 Wednesday AMC
DOVER CORP DOV 1.28 1.2 0.88 Wednesday BTO
EAST WEST BC EWBC 0.47 0.41 2.17 Wednesday AMC
EBAY INC EBAY 0.46 0.42 8.33 Wednesday AMC
ETHAN ALLEN INT ETH 0.29 0.25 -6.9 Wednesday AMC
EXPONENT INC EXPO 0.64 0.6 20 Wednesday AMC
FIRST CASH FINL FCFS 0.68 0.59 0 Wednesday BTO
FIRST REP BK SF FRC 0.71 0.66 -1.64 Wednesday BTO
HALLIBURTON CO HAL 0.68 0.94 6.67 Wednesday BTO
HERITAGE-CRYSTL HCCI 0.12 0.03 -22.22 Wednesday AMC
HNI CORP HNI 0.55 0.55 0 Wednesday AMC
HOME BANCSHARES HOMB 0.56 0.48 5.56 Wednesday AMC
K12 INC LRN 0.17 0.18 225 Wednesday BTO
KINDER MORG ENG KMP 0.58 0.44 -21.28 Wednesday AMC
KNIGHT CAP GP KCG -2 0.48 100 Wednesday BTO
KNOLL INC KNL 0.3 0.39 16.67 Wednesday BTO
LAM RESEARCH LRCX 0.41 0.63 -4.76 Wednesday AMC
LASALLE HTL PRP LHO 0.7 0.5 -2.7 Wednesday AMC
LINDSAY CORP LNN 0.75 0.46 8.09 Wednesday BTO
M&T BANK CORP MTB 1.84 1.53 3.57 Wednesday BTO
MELLANOX TECH MLNX 0.92 0.2 43.64 Wednesday AMC
NOBLE CORP NE 0.51 0.49 3.51 Wednesday AMC
NORTHERN TRUST NTRS 0.74 0.72 -1.33 Wednesday BTO
NVE CORP NVEC 0.62 0.52 7.81 Wednesday AMC
PACIFIC CONTL PCBK 0.16 0.14 21.43 Wednesday AMC
PEPSICO INC PEP 1.16 1.31 2.75 Wednesday BTO
PIPER JAFFRAY PJC 0.32 -0.23 34.78 Wednesday BTO
PLATINUM UNDRWT PTP 0.77 -1.63 3.33 Wednesday AMC
PREFERRED BANK PFBC 0.17 0.15 0 Wednesday AMC
QUEST DIAGNOSTC DGX 1.18 1.18 -0.85 Wednesday BTO
RLI CORP RLI 0.91 1.23 1.74 Wednesday AMC
SELECT COMFORT SCSS 0.4 0.31 11.11 Wednesday AMC
SLM CORP SLM 0.54 0.36 -9.26 Wednesday AMC
SMITH (AO) CORP AOS 0.68 0.39 11.94 Wednesday BTO
ST JUDE MEDICAL STJ 0.8 0.78 1.15 Wednesday BTO
STANLEY B&D INC SWK 1.45 1.34 -13.16 Wednesday BTO
STEEL DYNAMICS STLD 0.12 0.19 5.26 Wednesday AMC
STRYKER CORP SYK 0.98 0.91 0 Wednesday AMC
TAYLOR CAP GRP TAYC 0.33 0.27 70.83 Wednesday BTO
TEXTRON INC TXT 0.51 0.45 31.82 Wednesday BTO
UMPQUA HLDGS CP UMPQ 0.22 0.19 0 Wednesday AMC
UNIFIRST CORP UNF 1.01 0.9 17.17 Wednesday BTO
UNIVL FST PRODS UFPI 0.38 0.29 -5.63 Wednesday AMC
US BANCORP USB 0.74 0.64 2.9 Wednesday BTO
WESTAMER BANCP WABC 0.73 0.79 0 Wednesday
WNS HLDGS-ADR WNS 0.21 0.26 17.65 Wednesday BTO
XILINX INC XLNX 0.41 0.47 4.44 Wednesday AMC
ACACIA RES-TECH ACTG 0.22 0.34 -4.76 Thursday AMC
ADV MICRO DEV AMD 0.01 0.15 -14.29 Thursday AMC
ALLIANCE DATA ADS 2.13 2.16 3.37 Thursday BTO
ASSOC BANC CORP ASBC 0.25 0.2 0 Thursday AMC
ATHENAHEALTH IN ATHN 0.17 0.15 -25 Thursday AMC
B&G FOODS CL-A BGS 0.32 0.25 10 Thursday AMC
BANCORPSOUTH BXS 0.22 0.14 10 Thursday AMC
BAXTER INTL BAX 1.14 1.09 0.9 Thursday BTO
BB&T CORP BBT 0.7 0.52 4.35 Thursday BTO
BLACKSTONE GRP BX 0.42 -0.31 46.15 Thursday BTO
BOSTON SCIENTIF BSX 0.11 0.15 54.55 Thursday BTO
BRIGGS & STRATT BGG -0.18 -0.11 -21.43 Thursday BTO
BUILDERS FIRSTS BLDR -0.06 -0.07 -40 Thursday AMC
CAPITAL ONE FIN COF 1.74 1.88 -75.56 Thursday AMC
CEPHEID INC CPHD -0.05 0.03 50 Thursday AMC
CHIPOTLE MEXICN CMG 2.3 1.9 11.79 Thursday AMC
CITY NATIONAL CYN 0.92 0.77 14.77 Thursday AMC
COBIZ FINL INC COBZ 0.13 0.05 27.27 Thursday AMC
CYPRESS SEMICON CY 0.05 0.23 100 Thursday BTO
CYS INVESTMENTS CYS 0.42 0.41 4.26 Thursday BTO
DANAHER CORP DHR 0.78 0.73 1.25 Thursday BTO
DIAMOND OFFSHOR DO 1 1.85 21.11 Thursday BTO
E TRADE FINL CP ETFC 0.08 0.24 18.18 Thursday AMC
EASTGROUP PPTYS EGP 0.77 0.75 0 Thursday AMC
FAIRCHILD SEMI FCS 0.17 0.34 -12.5 Thursday BTO
FIFTH THIRD BK FITB 0.39 0.4 2.86 Thursday BTO
FLEXTRONIC INTL FLEX 0.22 0.19 5 Thursday AMC
FORWARD AIR CRP FWRD 0.4 0.44 4.35 Thursday AMC
GATX CORP GMT 0.66 0.67 31.15 Thursday BTO
GENUINE PARTS GPC 1.12 0.97 0 Thursday BTO
GOOGLE INC-CL A GOOG 8.65 8.33 0.69 Thursday AMC
HANMI FINL CP HAFC 0.42 0.24 -76.32 Thursday BTO
HEALTHWAYS INC HWAY 0.13 0.28 114.29 Thursday AMC
HUBBELL INC -B HUB.B 1.44 1.37 4.88 Thursday BTO
HUNTINGTON BANC HBAN 0.17 0.16 13.33 Thursday BTO
INDEP BK MASS INDB 0.56 0.56 -17.31 Thursday AMC
INSTEEL INDS IIIN 0.1 0.04 -58.33 Thursday BTO
ITERIS INC ITI 0.02 0.03 -50 Thursday AMC
KEYCORP NEW KEY 0.21 0.24 27.78 Thursday BTO
LABORATORY CP LH 1.74 1.61 -0.56 Thursday BTO
LATTICE SEMICON LSCC -0.01 0.12 88.89 Thursday AMC
LIFE TIME FITNS LTM 0.77 0.66 1.39 Thursday BTO
MICROSOFT CORP MSFT 0.58 0.68 15.87 Thursday AMC
MORGAN STANLEY MS 0.25 1.14 -62.79 Thursday BTO
MYERS INDS MYE 0.2 0.14 0 Thursday BTO
NCR CORP-NEW NCR 0.59 0.53 10.17 Thursday AMC
NETSCOUT SYSTMS NTCT 0.23 0.22 14.29 Thursday BTO
NOKIA CP-ADR A NOK -0.12 0.04 9.09 Thursday BTO
NUCOR CORP NUE 0.43 0.57 -4.26 Thursday BTO
OCEANFIRST FINL OCFC 0.29 0.28 3.45 Thursday AMC
PENN NATL GAMNG PENN 0.57 0.62 0 Thursday BTO
PEOPLES UTD FIN PBCT 0.19 0.19 0 Thursday AMC
PHILIP MORRIS PM 1.39 1.37 1.49 Thursday BTO
PIXELWORKS INC PXLW 0 -0.06 37.5 Thursday AMC
POLARIS INDUS PII 1.2 0.95 5.38 Thursday BTO
POOL CORP POOL 0.56 0.5 -0.74 Thursday BTO
PPG INDS INC PPG 2.21 1.96 0 Thursday BTO
PREMIERE GLOBAL PGI 0.15 0.14 -5.88 Thursday AMC
RIVERBED TECH RVBD 0.14 0.12 -10 Thursday AMC
SANDISK CORP SNDK 0.3 1.14 -11.76 Thursday AMC
SANDY SPRING SASR 0.36 0.47 9.09 Thursday BTO
SNAP-ON INC SNA 1.23 1.16 8.33 Thursday BTO
SONOCO PRODUCTS SON 0.52 0.66 0 Thursday BTO
SOUTHWEST AIR LUV 0.14 0.15 9.09 Thursday BTO
TRAVELERS COS TRV 1.52 0.79 -8.03 Thursday BTO
TRINITY BIOTECH TRIB 0.2 0.18 0 Thursday
ULTRATECH STEP UTEK 0.42 0.39 5.13 Thursday BTO
UNION PAC CORP UNP 2.19 1.85 7.14 Thursday BTO
USG CORP USG -0.1 -0.67 -25 Thursday BTO
VASCULAR SOLUTN VASC 0.15 0.1 15.38 Thursday AMC
VERIZON COMM VZ 0.65 0.56 0 Thursday BTO
WESCO INTL INC WCC 1.25 1.13 -4.96 Thursday BTO
WESTERN ALLIANC WAL 0.17 0.06 23.08 Thursday AMC
AIR PRODS & CHE APD 1.44 1.51 -1.5 Friday BTO
BAKER-HUGHES BHI 0.84 1.18 28.21 Friday BTO
COOPER INDS PLC CBE 1.14 0.98 0.89 Friday BTO
EDWARDS LIFESCI EW 0.56 0.38 3.08 Friday AMC
FIRST HRZN NATL FHN 0.18 0.12 0 Friday BTO
FIRST NIAGARA FNFG 0.18 0.25 -5.56 Friday BTO
GENL ELECTRIC GE 0.37 0.31 2.7 Friday BTO
HONEYWELL INTL HON 1.13 1.1 2.7 Friday BTO
IDEXX LABS INC IDXX 0.73 0.66 1.11 Friday BTO
INGERSOLL RAND IR 0.99 0.81 26.37 Friday BTO
KANSAS CITY SOU KSU 0.86 0.78 1.19 Friday BTO
MANPOWER INC WI MAN 0.68 0.97 5.56 Friday BTO
MCDONALDS CORP MCD 1.47 1.45 -4.35 Friday BTO
METROCORP BANCS MCBI 0.13 0.13 60 Friday AMC
PARKER HANNIFIN PH 1.74 1.91 2.62 Friday BTO
POPULAR INC BPOP 0.5 0.3 53.66 Friday BTO
ROBBINS & MYERS RBN 0.97 0.79 2.22 Friday BTO
SCHLUMBERGER LT SLB 1.06 0.98 5 Friday BTO
SENSIENT TECH SXT 0.66 0.64 0 Friday BTO
TCF FINL CORP TCB 0.18 0.2 11.11 Friday BTO
VALMONT INDS VMI 2.06 1.59 3.7 Friday BTO

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