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Earnings Preview

The budget sequester has taken effect, but thankfully everything seems to be just fine.

The fourth quarter earnings season is effectively in the books now, though it will still be couple of more weeks before we can officially call an end to the reporting season. The focus this week will be on economic data, with the February jobs reports coming out on Friday. The budget sequester will also provide headlines, though thankfully the actual onset of the long-dreaded event has thus far been quite underwhelming.

But while earnings may not be in the headlines, we will have a total of 188 companies coming out with results this week, including 5 S&P 500 members. By the end of this week, we will be close to the finish line, having seen Q4 results from 491 S&P 500 companies or 98.2% of the index’s total membership. The major companies reporting this week include Kroger (KR), Staples (SPLS), H&R Block (HRB), Hovnanian Enterprises (HOV), Transocean (RIG) and Smith & Wesson (SWHC).

The reality of the Q4 earnings season is that it has turned out to be not as bad as many of us suspected. Leaving aside anemic growth, on most other metrics the fourth quarter reporting season is quite good. Not only are the ratio and magnitude of surprises better than the previous quarter and comparable to the last many, but the tone of management guidance has also been less worrisome than was the case in the third quarter reporting season.

Total earnings for the 486 S&P 500 companies that have come out with Q4 results, as of Friday March 1, are up +2% from the same period last year, with 64% beating expectations with a strong median surprise of +3.4%. Stripping out the unusual revenue growth at Prudential Financial (PRU) and Express Scripts (ESRX), total revenues are up +1.5%, with 58% of the companies beating revenue expectations, with a median revenue surprise of +0.7%.

Expectations for the coming quarters have started coming down, but they still represent a meaningful improvement from what we saw in 2012. Total earnings are expected to be -4.1% in the first quarter, +4.8% in the second quarter, +7.4% in the third quarter and +12.9% in the fourth quarter of 2013. What this means is that the market is looking for flat earnings growth in the first half of 2013 (only +0.3%), but expects a +10.2% jump in the back half of the year.

For the full-years 2013 and 2014, total earnings are expected to be up +6.8% in 2013 and 11.7% in 2014. The bottom-up ‘EPS’ estimates for the S&P 500 currently stand at $109.50 for 2013 and $122.28 for 2014 (Note: The Zacks bottom-up estimates are lower than other data vendors because we account for employee stock options, while others don’t).

Economic data will be front and center this week, with the February non-farm payroll report coming out on Friday. The expectation is for ‘headline’ gains of 151K, modestly lower than January’s 157K reading. The East Coast snow storms could potentially be a distorting factor in this month’s data.

But given the recent favorable momentum on the jobless claims front, it wouldn’t be unreasonable to look for a positive surprise. Other major economic reports this week include the non-manufacturing ISM index for February and the January Factor Orders reports.

Monday - 3/4

Tuesday - 3/5

  • The February non-manufacturing ISM index coming out in the morning is expected to show a modest pullback from January’s 55.2 level. Given the positive surprise from the manufacturing ISM report on Friday, it will be interesting to see if we get similar momentum on the service sector side, which overall has been doing better lately than the manufacturing side.
  • VeriFone Holdings (PAY), Smith & Wesson (SWHC), Nutri System (NTRI) and Jamba (JMBA) are the major companies reporting, all after the close.

Wednesday - 3/6

  • The February ADP jobs report will come out in the morning, providing us with a preview of what to expect from Friday’s government jobs report. The expectation is for the ADP report to show private sector jobs of 175K in February compared to 192K in January.
  • Hovnanian Enterprises (HOV), Big Lots (BIG), Staples (SPLS) and American Eagle Outfitters (AEO) are the key reports in the morning, while Along USA (ALJ) will report after the close.

Thursday - 3/7

  • In addition to the weekly Jobless Claims data, we will get the second look at the Q4 productivity data and the January Trade Balance numbers.
  • Kroger (KR) is the only notable report in the morning, while Pandora Media (P) and H&R Block (HRB) will report after the close.

Friday - 3/8

  • The February non-farm payroll report coming out in the morning is the highlight, with expectations of 151K headline job gains during the month, modestly down from January’s 157K level.
  • Foot Locker (FL), Genesco (GCO) and Ann (ANN) are the only notable earnings reports today.


Here is a list of the 188 companies reporting this week, including 5 S&P 500 members:

Company Ticker Current Qtr Year-Ago Qtr Last EPS Surprise % Report Day Time
ABM INDUSTRIES ABM 0.22 0.22 25 Monday AMC
ALVARION LTD ALVR -0.09 -0.05 13.33 Monday BTO
ARENA PHARMA ARNA -0.02 -0.16 12.5 Monday BTO
ASCENA RETAIL ASNA 0.24 0.41 14.71 Monday AMC
ASSET ACCEPTNCE AACC 0.03 0.16 42.86 Monday AMC
BANCOLOMBIA-ADR CIB 1.03 1.36 24.18 Monday N/A
BOYD GAMING CP BYD -0.13 -0.03 -450 Monday BTO
CASELLA WASTE CWST -0.16 -0.28 30.77 Monday AMC
CELLCOM ISRAEL CEL 0.23 0.2 45.45 Monday BTO
DUCOMMUN INC DE DCO 0.42 0.27 29.73 Monday AMC
EPIQ SYS INC EPIQ 0.22 0.21 0 Monday AMC
GOLDEN STAR RES GSS 0.03 0.02 -100 Monday AMC
MPG OFFICE TRST MPG -0.15 -0.2 35.29 Monday AMC
NAUTILUS INC NLS 0.22 0.11 500 Monday AMC
RENEWABLE ENERG REGI -0.02 3.95 0 Monday AMC
RESOURCE CAPITL RSO 0.2 0.02 -100 Monday AMC
SANTARUS INC SNTS 0.01 0.03 30 Monday AMC
SHFL ENTERTNMT SHFL 0.14 0.14 0 Monday AMC
STRATASYS LTD SSYS 0.27 0.29 110.53 Monday BTO
SUN HYDRAULICS SNHY 0.23 0.24 -8.11 Monday AMC
TECH DATA CORP TECD 1.76 1.75 -9.02 Monday BTO
THL CREDIT INC TCRD 0.32 0.3 20.59 Monday AMC
TRANS1 INC TSON -0.19 -0.18 -22.22 Monday AMC
TRANSOCEAN LTD RIG 0.81 0.19 80.26 Monday BTO
YINGLI GREEN EN YGE -0.54 -0.15 21.15 Monday BTO
21VIANET GP-ADR VNET 0.09 0.08 -20 Tuesday AMC
AEROVIRONMENT AVAV 0.37 0.26 85.71 Tuesday AMC
AG MORTGAGE INV MITT 0.86 0.65 33.77 Tuesday AMC
AVID TECH INC AVID 0.11 0.3 -200 Tuesday AMC
BAKER (MICHAEL) BKR 0.06 0.43 -57.38 Tuesday BTO
BANK OF NOVA SC BNS 1.26 1.21 0 Tuesday BTO
CHECKPOINT SYS CKP 0.18 -0.1 -83.33 Tuesday BTO
FERRO CORP FOE -0.03 -0.08 -37.5 Tuesday N/A
GEVO INC GEVO -0.47 -0.54 -62.79 Tuesday AMC
H&E EQUIP SVCS HEES 0.28 0.23 3.33 Tuesday BTO
HICKORY TECH HTCO 0.09 0.11 -31.58 Tuesday AMC
IGI LABORATORYS IG 0 -0.01 N/A Tuesday N/A
IMRIS INC IMRS -0.08 -0.11 -35.71 Tuesday AMC
INFINITY PHARMA INFI -0.89 -0.53 -19.4 Tuesday N/A
INSITE VISION INSV -0.02 -0.03 300 Tuesday AMC
JAMBA INC JMBA -0.1 -0.13 -42.86 Tuesday AMC
MCG CAPITAL MCGC 0.08 0.11 -25 Tuesday BTO
MELA SCIENCES MELA -0.22 -0.21 19.05 Tuesday AMC
MEMORIAL PRODUC MEMP 0.47 0.3 -44.44 Tuesday BTO
MID-CON ENERGY MCEP 0.47 0.17 -22.22 Tuesday AMC
NCI BLDG SYSTEM NCS 0 -0.32 0 Tuesday AMC
NORDION INC NDZ 0.07 0.11 30.77 Tuesday AMC
NUTRI/SYSTEM NTRI -0.14 -0.04 -43.75 Tuesday AMC
OMEGA PROTEIN OME 0.15 0.09 -30 Tuesday AMC
PARK OHIO HLDNG PKOH 0.49 0.64 7.32 Tuesday N/A
QIHOO 360 TECH QIHU 0.04 0.13 83.33 Tuesday AMC
QUAD GRAPHICS QUAD 0.9 0.63 0 Tuesday BTO
RADISYS CORP RSYS -0.07 -0.01 -128.57 Tuesday AMC
RIGEL PHARMCTCL RIGL -0.32 -0.36 2.7 Tuesday BTO
SEASPAN CORP SSW 0.29 0.31 -6.25 Tuesday AMC
SMITH & WESSON SWHC 0.21 0.08 4.35 Tuesday AMC
SOC QUIMICA MIN SQM 0.63 0.6 -13.7 Tuesday AMC
STEREOTAXIS INC STXS -0.4 -1 53.52 Tuesday AMC
SUNOPTA INC STKL 0.09 0.07 0 Tuesday AMC
TRINITY BIOTECH TRIB 0.2 0.18 0 Tuesday N/A
VERIFONE HLDGS PAY 0.37 0.5 -1.49 Tuesday AMC
ACCURIDE CORP ACW -0.43 0.09 -109.09 Wednesday AMC
AEGERION PHARMA AEGR -0.62 -0.61 -3.51 Wednesday BTO
ALON USA ENERGY ALJ 0.66 -0.78 29.23 Wednesday AMC
AMER EAGLE OUTF AEO 0.55 0.35 5.13 Wednesday BTO
AMER SAFETY INS ASI -0.38 -0.64 5 Wednesday AMC
APOLLO RES MTGE AMTG 0.7 0.52 416.18 Wednesday AMC
BIG LOTS INC BIG 2 1.75 58.33 Wednesday BTO
BIOLASE TECH BIOL 0 -0.06 50 Wednesday AMC
BROWN FORMAN B BF.B 0.7 0.62 2.56 Wednesday BTO
CAPITAL SR LIVG CSU 0.09 0.07 0 Wednesday AMC
CHINA LODGING HTHT 0.02 0.08 56.25 Wednesday AMC
COCA COLA BOTTL COKE 0.18 0.51 -15.2 Wednesday AMC
COLONY FINL INC CLNY 0.36 0.36 -100 Wednesday AMC
COMPASS DIVERSF CODI 0.29 -0.01 -18.18 Wednesday AMC
COUNTRY STY-ADR CCSC 0.05 -0.12 46.15 Wednesday AMC
CROSS COUNTRY CCRN 0 0.02 -200 Wednesday AMC
DELEK US HLDGS DK 0.95 -0.07 8.44 Wednesday AMC
ENDEAVOR INTL END 0.01 -0.16 -363.64 Wednesday BTO
ENERGY RECOVERY ERII -0.02 -0.14 -300 Wednesday AMC
FAIRPOINT COMM FRP -1.47 -3.32 40.74 Wednesday AMC
FRESH MARKET TFM 0.45 0.38 -11.54 Wednesday BTO
FULL HOUSE RESO FLL 0 0.03 450 Wednesday BTO
FURIEX PHARMACT FURX -1.81 -0.68 63.33 Wednesday AMC
GENTHERM INC THRM 0.16 0.34 15.38 Wednesday BTO
HFF INC-A HF 0.37 0.35 0 Wednesday AMC
HOVNANIAN ENTRP HOV -0.09 -0.32 133.33 Wednesday BTO
HUDSON PAC PPTY HPP 0.21 0.25 5 Wednesday AMC
ID SYSTEMS INC IDSY -0.07 0 -21.74 Wednesday N/A
INTEST CORP INTT 0.02 0.08 200 Wednesday AMC
JOHN BEAN TECH JBT 0.62 0.48 5 Wednesday AMC
LHC GROUP LLC LHCG 0.37 0.39 2.7 Wednesday AMC
LINCOLN EDUCATL LINC 0.11 0.28 100 Wednesday BTO
MAIDENFORM BRND MFB 0.21 0 2.22 Wednesday BTO
MYR GROUP INC MYRG 0.41 0.28 -6.82 Wednesday AMC
NETQIN MOBILE NQ 0.01 0.07 -66.67 Wednesday AMC
NEW MOUNTN FIN NMFC 0.34 0.3 0 Wednesday AMC
OILTANKING PTNR OILT 0.38 0.3 0 Wednesday AMC
OSIRIS THERAPTC OSIR -0.15 0.15 35.71 Wednesday BTO
PETSMART INC PETM 1.21 0.91 19.05 Wednesday AMC
PHOENIX NEW MED FENG 0.03 0.07 -30 Wednesday AMC
POINTS INTL LTD PCOM 0.19 0.13 -28.57 Wednesday AMC
POZEN INC POZN -0.21 2.04 -26.67 Wednesday BTO
QR ENERGY LP QRE 0.27 0.49 0 Wednesday BTO
RELM WIRELESS RWC 0.01 0.01 133.33 Wednesday BTO
SANCHEZ ENERGY SN 0.15 0.02 25 Wednesday AMC
SEMTECH CORP SMTC 0.34 0.23 28.57 Wednesday AMC
SPEEDWAY MOTORS TRK -0.03 0 -38.64 Wednesday BTO
STAPLES INC SPLS 0.45 0.41 2.22 Wednesday BTO
STEINWAY MUSIC LVB 0.47 0.25 12.9 Wednesday AMC
TRANSACT TECH TACT 0.2 0.06 -46.67 Wednesday AMC
VAIL RESORTS MTN 1.71 1.27 -6.92 Wednesday AMC
VALUEVISION CLA VVTV -0.11 -0.17 20 Wednesday AMC
WALKER & DUNLOP WD 0.63 0.5 40 Wednesday BTO
WARREN RSRCS WRES 0.04 0.08 -33.33 Wednesday BTO
WI-LAN INC WILN 0.07 0.13 0 Wednesday BTO
ADVOCAT INC AVCA -0.01 -0.21 164.29 Thursday AMC
ARABIAN AMER ARSD 0.17 0.14 -12.5 Thursday N/A
BITAUTO HOLDNGS BITA 0.18 0.76 8.33 Thursday BTO
BLACKROCK KELSO BKCC 0.12 0.15 3.23 Thursday BTO
BLOCK H & R HRB 0 -0.01 7.5 Thursday AMC
BLOUNT INTL BLT 0.23 0.19 0 Thursday BTO
CAMBIUM LEARNG ABCD -0.21 -0.19 70.59 Thursday AMC
CDN NTRL RSRCS CNQ 0.44 0.8 -13.04 Thursday BTO
CECO ENVIRNMNTL CECE 0.18 0.17 26.67 Thursday BTO
CEDAR SHOPN CTR CDR 0.09 0.12 10 Thursday AMC
CHEMBIO DIAGNOS CEMI 0.07 0.08 -200 Thursday AMC
CHESAPEAKE UTIL CPK 0.87 0.83 37.5 Thursday AMC
CIENA CORP CIEN -0.25 -0.26 -14.29 Thursday BTO
COLEMAN CABLE CCIX 0.25 0.05 -14.63 Thursday AMC
CONSOL COMM IL CNSL 0.17 0.26 200 Thursday BTO
COOPER COS COO 1.2 1.12 -3.92 Thursday AMC
DESCARTES SYS DSGX 0.15 0.11 -35.71 Thursday BTO
DIADEXUS INC DDXS -0.02 -0.02 100 Thursday AMC
EMERGENT BIOSOL EBS 0.45 0.78 -5.26 Thursday AMC
EPL OIL&GAS INC EPL 0.47 0.39 29.17 Thursday BTO
FERRELLGAS -LP FGP 0.8 0.49 4.35 Thursday BTO
FIDUS INVESTMNT FDUS 0.38 0.36 0 Thursday AMC
FINISAR CORP FNSR 0.08 0.17 14.29 Thursday AMC
FLY LEASING LTD FLY 0.85 0.74 -72.55 Thursday BTO
GENL COMMS INC GNCMA 0.09 -0.01 -25 Thursday N/A
GLOBAL POWER EQ GLPW 0.39 0.43 -76.47 Thursday AMC
IDENTIVE GROUP INVE -0.04 -0.02 57.14 Thursday BTO
IDT CORP-CL B IDT 0.14 0.12 50 Thursday AMC
INFORMATION SVC III 0 -0.34 50 Thursday AMC
JAMES RIVER CL JRCC -1.44 -0.05 -2.04 Thursday BTO
JOURNAL COMM-A JRN 0.26 0.12 33.33 Thursday BTO
KROGER CO KR 0.7 0.5 6.98 Thursday BTO
MAC-GRAY CORP TUC 0.18 0.07 -42.86 Thursday BTO
MAIN STREET CAP MAIN 0.5 0.49 6.52 Thursday AMC
MEDIFAST INC MED 0.25 0.08 5 Thursday AMC
MEETME INC MEET -0.07 -0.12 -600 Thursday AMC
MIMEDX GRP INC MDXG -0.01 -0.25 N/A Thursday BTO
NEUTRAL TANDEM IQNT -0.04 0.19 13.33 Thursday BTO
NEXSTAR BRDCSTG NXST 0.47 0.11 N/A Thursday BTO
NGP CAP RSRCS NGPC 0.18 0.1 -15.79 Thursday BTO
PANDORA MEDIA P -0.09 -0.05 150 Thursday AMC
PERFICIENT INC PRFT 0.19 0.14 -4.55 Thursday BTO
PIEDMONT NAT GA PNY 1.16 1.05 57.14 Thursday N/A
POSTROCK ENERGY PSTR 0.14 0.08 -750 Thursday BTO
POWERSECURE INT POWR 0.11 0.05 0 Thursday AMC
PRIMORIS SERVCS PRIM 0.3 0.24 3.03 Thursday BTO
QAD INC QADB 0.12 0.23 50 Thursday AMC
QAD INC-A QADA 0.15 0.23 20 Thursday AMC
SAFEGUARD SCTFC SFE -0.23 -1.18 -7.69 Thursday BTO
SAREPTA THERAP SRPT -0.41 -0.06 -3.45 Thursday BTO
SEQUENOM INC SQNM -0.24 -0.22 -13.04 Thursday AMC
SIMCERE PHARMAC SCR 0.07 0.08 0 Thursday BTO
SKULLCANDY INC SKUL 0.48 0.47 0 Thursday AMC
SMITHFIELD FOOD SFD 0.53 0.69 38.64 Thursday BTO
SPARK NETWORKS LOV -0.09 -0.05 -33.33 Thursday N/A
STANDARD PKG CP STAN 0.27 0.32 -14.71 Thursday AMC
THOR INDS INC THO 0.37 0.25 -7.94 Thursday AMC
TRIANGLE CAP CP TCAP 0.55 0.49 7.41 Thursday BTO
US PHYSICAL THR USPH 0.33 0.29 0 Thursday BTO
WINTHROP REALTY FUR 0.27 0.49 87.1 Thursday BTO
WUXI PHARMATECH WX 0.25 0.32 20 Thursday AMC
ANN INC ANN 0.05 0.1 2.7 Friday BTO
ARCOS DORADOS-A ARCO 0.21 0.22 6.67 Friday BTO
BPZ RESOURCES BPZ -0.13 -0.14 -8.33 Friday N/A
FOOT LOCKER INC FL 0.72 0.55 16.67 Friday BTO
FUEL SYSTEM SOL FSYS -0.03 0.07 0 Friday BTO
GENESCO INC GCO 2.13 1.97 7.46 Friday BTO
HYDROGENICS CP HYGS -0.28 -0.18 N/A Friday BTO
ISOFTSTONE LTD ISS 0.13 0.14 36.36 Friday BTO
KMG CHEMICALS KMG 0.17 0.23 16.13 Friday BTO
MEMSIC INC MEMS -0.04 0.05 75 Friday BTO
METALICO INC MEA -0.02 0.06 -200 Friday BTO

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