First-quarter earnings season kicks off this week with Alcoa (AA) reporting today, after the close. The company is projected to report a profit of 50 cents per share. AA has missed expectations three times during the past five quarters.
Despite Alcoa’s disappointments, the outlook for multiple commodity-related groups is very positive. Metal and oil groups dominate the industry rankings. The strong showing is not surprising given the continuing rally in commodity prices. Last week, oil neared $70 a barrel and silver is quickly becoming the metal du jour.
Onshore driller Patterson-UTI Energy (PTEN) recently delivered a very impressive fourth-quarter report. The company credited strong demand for its services, along with a “scarcity of land-based drilling rigs” for record revenues and earnings. PTEN anticipates activating 30 rigs this year, which would equate into an approximate 10% increase in total rigs. Within the past two weeks, eight of the 15 covering analysts have boosted their estimates for 2006, resulting in a 26-cent increase in the consensus estimate. The new estimate calls for a full year profit of $3.64 per share. Value oriented-investors should note that this forecast translates into a forward-looking P/E multiple of less than 10.
Estimates for Bronco Drilling Company (BRNC) have also been rising over the past few weeks. The positive revisions are particularly notable because a recently completed secondary offering included 1.7 million shares sold by the company. First-quarter estimates are up 10% from a month ago (43 cents versus 39 cents) and full year estimates are up 8% ($2.20 versus $2.03).
Although gold did reach $600 an ounce this week, all that glitters may actually be silver. May contracts have spiked by nearly 25% since Mar 1. A forthcoming silver ETF is pending approval from the SEC. In the meantime, Silver Wheaton (SLW) offers the opportunity for investors to get exposure to the surging metal. SLW, a Zacks #2 Rank stock, receives 100% of its revenues from silver production. More importantly, analysts have raised their forecasts for both full quarter and full year earnings. Silver Wheaton will report first quarter earnings on Apr 20.
The other story in the metal sector is steel. Last week, the Wall Street Journal reported that U.S. shipments were up 3.5% in January and February. Prices are also rising, as was evidenced by recently announced price increases of 6-9% by ATI Allegheny Ludlum, a unit of Allegheny Technologies (ATI).
Analysts are paying attention to the rise in prices. First-quarter and full year estimates for ATI have been hiked by 3% over the past 30 days. Analysts have also upwardly revised estimates on Maverick Tube (MVK) and Olympic Steel (ZEUS).
Overall, first quarter earnings should be strong. To date, 109 companies within the Zacks Rank universe1 have reported – all of which operate on a fiscal year that deviates from the traditional calendar year. Within this small group, 63 companies have topped expectations and 27 have missed.
A complete listing of the Zacks Sector Rank and Industry Rank scores is presented in the tables below. Sector Rank is calculated by averaging the Zacks Rank for all of the industries within a given sector. Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry.
Charles Rotblut, CFA is a senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com
1The Zacks Rank is assigned to companies with earnings estimates made available by brokerage analysts. The Zacks’ database contains earnings estimates for approximately 4400 companies.
Sector Rank for the Week of Apr 10
|
| Sector | This Week's
Zacks Rank | Last Week's
Zacks Rank | Net % of FY06
Revised Up^^ | Estimates
Revised Up* | Estimates
Revised Down* |
| AEROSPACE | 2.54 | 2.63 | 9% | 21 | 6 |
| CONGLOMERATES | 2.76 | 2.66 | 10% | 14 | 2 |
| BASIC MATERIALS | 2.78 | 2.75 | 5% | 122 | 80 |
| TRANSPORTATION | 2.92 | 2.94 | -1% | 76 | 77 |
| CONSTRUCTION | 2.94 | 2.88 | -2% | 26 | 37 |
| UTILITIES | 2.94 | 3.07 | -4% | 54 | 77 |
| INDUSTRIAL PRODUCTS | 2.95 | 2.98 | 1% | 67 | 50 |
| OILS-ENERGY | 2.95 | 2.94 | -8% | 154 | 295 |
| FINANCE | 2.97 | 2.99 | 0% | 301 | 228 |
| BUSINESS SERVICES | 2.98 | 2.94 | -2% | 33 | 34 |
| COMPUTER AND TECHNOLOGY | 3.00 | 2.97 | -1% | 400 | 453 |
| CONSUMER STAPLES | 3.06 | 3.08 | -3% | 71 | 126 |
| MEDICAL | 3.07 | 3.08 | -3% | 205 | 300 |
| RETAIL-WHOLESALE | 3.10 | 3.06 | -6% | 199 | 271 |
| CONSUMER DISCRETIONARY | 3.11 | 3.13 | -8% | 91 | 207 |
| AUTO-TIRES-TRUCKS | 3.21 | 3.25 | -5% | 10 | 25 |
Industry Rank for the Week of Apr 10
|
| Industry | This Week's
Zacks Rank | Last Week's
Zacks Rank | Net % of FY06
Revised Up^ | Estimates
Revised Up* | Estimates
Revised Down* |
| STEEL-SPECIALTY ALLOYS | 1.33 | 1.67 | 19% | 4 | 0 |
| STEEL-PIPE & TUBES | 1.67 | 1.67 | 11% | 3 | 0 |
| BLDG PROD-RETAIL/WHLSLE | 1.83 | 1.83 | 14% | 4 | 0 |
| BLDG-CEMENT/CONCRT/AG | 1.89 | 2.00 | 15% | 8 | 3 |
| AUDIO/VIDEO HOME PROD | 2.00 | 3.00 | 13% | 2 | 1 |
| ELEC-CONNECTORS | 2.00 | 2.00 | 3% | 2 | 0 |
| CHEMICALS-FIBERS | 2.00 | 2.00 | 0% | 0 | 0 |
| STEEL-PRODUCERS | 2.23 | 2.19 | 27% | 28 | 5 |
| MINING-NON FERROUS | 2.25 | 2.00 | 19% | 11 | 4 |
| BLDG PROD-AIR COND/HEAT | 2.25 | 2.25 | 2% | 1 | 0 |
| MACHINERY-CONST/MINING | 2.30 | 2.20 | 15% | 7 | 2 |
| RUBBER & PLASTIC PRODUCTS | 2.33 | 2.67 | 33% | 1 | 0 |
| AEROSPACE/DEFENSE | 2.33 | 2.50 | -6% | 4 | 5 |
| OIL & GAS-FIELD SERVICES | 2.38 | 2.29 | 25% | 24 | 14 |
| OIL FIELD MACH & EQUIP | 2.43 | 2.19 | -4% | 4 | 8 |
| COMPUTER-OPTICAL RECOGNITN | 2.50 | 2.50 | 15% | 3 | 1 |
| METAL PROD-DISTRIBUTOR | 2.50 | 2.50 | 13% | 1 | 0 |
| TRANSPORTATION-RAIL | 2.50 | 2.50 | 11% | 15 | 2 |
| OIL & GAS-INTL SPECIALTY | 2.50 | 3.00 | 4% | 2 | 6 |
| TRANSPORTATION-EQP & LSNG | 2.50 | 2.44 | 2% | 2 | 2 |
| FERTILIZERS | 2.50 | 2.00 | 0% | 0 | 0 |
| WIRE & CABLE PRODUCTS | 2.50 | 2.75 | -17% | 1 | 2 |
| FOOD-SUGAR & REFINING | 2.50 | 3.00 | -50% | 0 | 1 |
| FINANCE-INVESTMENT BKRS | 2.52 | 2.44 | 26% | 66 | 6 |
| INSURANCE-MULTI LINE | 2.55 | 2.59 | 17% | 23 | 4 |
| AEROSPACE/DEFENSE EQUIP | 2.55 | 2.68 | 9% | 13 | 1 |
| ELEC PRODUCTS-MISC | 2.58 | 2.63 | 3% | 5 | 4 |
| OIL & GAS-DRILLNG | 2.59 | 2.73 | 5% | 27 | 14 |
| FIBER OPTICS | 2.60 | 2.60 | 10% | 8 | 2 |
| RETAIL-REGNL DEPT STRS | 2.60 | 2.60 | 9% | 10 | 3 |
| MEDICAL-NURSING HOMES | 2.60 | 2.60 | 5% | 3 | 2 |
| BANKS-FOREIGN | 2.61 | 2.71 | 8% | 14 | 6 |
| ELECTRONICS-MANUFACTURING MACH | 2.63 | 2.81 | 10% | 28 | 8 |
| OIL & GAS-CDN EXP & PROD | 2.63 | 2.71 | -11% | 4 | 8 |
| MINING-MISC | 2.64 | 2.62 | 1% | 5 | 4 |
| TRANSPORTATION-SVCS | 2.64 | 2.73 | -12% | 6 | 13 |
| AUTO MFRS-FOREIGN | 2.67 | 2.67 | 9% | 5 | 3 |
| AUTO MFRS-DOMESTIC | 2.67 | 3.00 | -2% | 1 | 2 |
| APPLIANCES-HOUSEHOLD | 2.67 | 3.00 | -20% | 0 | 3 |
| BANKS-MAJOR REGIONAL | 2.69 | 2.88 | 1% | 13 | 12 |
| ELECTRONICS-MILITARY SYS | 2.71 | 2.57 | 21% | 4 | 0 |
| MACHINERY-ELECTRICAL | 2.71 | 3.14 | 11% | 2 | 0 |
| FINANCE-INVESTMENT MGMT | 2.71 | 2.71 | 6% | 21 | 7 |
| BLDG PROD-WOOD | 2.71 | 2.71 | -8% | 3 | 3 |
| SHOES & REL APPAREL | 2.73 | 2.82 | 12% | 11 | 7 |
| RETAIL/WHOLESALE AUTO/TRUCK | 2.73 | 2.64 | -7% | 5 | 9 |
| CONTAINERS-PAPER/PLASTIC | 2.75 | 3.08 | 27% | 12 | 0 |
| INSURANCE-ACC & HEALTH | 2.75 | 2.88 | -11% | 3 | 6 |
| DIVERSIFIED OPERATIONS | 2.76 | 2.66 | 10% | 14 | 2 |
| FINANCE-MISC SERVICES | 2.76 | 2.80 | 6% | 9 | 6 |
| PROTECTION-SFTY EQ & SVC | 2.76 | 2.94 | -1% | 3 | 4 |
| COSMETICS & TOILETRIES | 2.77 | 2.92 | 12% | 3 | 0 |
| BEVERAGES-SOFT DRINKS | 2.77 | 2.92 | 4% | 4 | 3 |
| INSTRUMENTS-CONTROL | 2.78 | 2.89 | 11% | 1 | 0 |
| CONSUMER PROD-MISC STAPLES | 2.78 | 2.78 | -10% | 1 | 2 |
| BLDG-HEAVY CONST | 2.80 | 2.80 | 2% | 1 | 2 |
| BLDG-MAINTENANCE & SVC | 2.80 | 2.80 | -3% | 1 | 2 |
| OIL & GAS-CDN INTEGRATED | 2.80 | 2.40 | -17% | 3 | 3 |
| REAL ESTATE OPERATIONS | 2.82 | 2.53 | 12% | 13 | 1 |
| INSURANCE-LIFE | 2.82 | 3.00 | 3% | 8 | 2 |
| FINANCE-CONSUMER LOANS | 2.82 | 3.00 | -1% | 5 | 6 |
| RETAIL-APPAREL/SHOE | 2.83 | 2.79 | 2% | 60 | 49 |
| UTILITY-ELECTRIC POWER | 2.83 | 2.96 | 0% | 20 | 24 |
| OIL & GAS-INTL INTEGRATED | 2.83 | 3.00 | -7% | 19 | 24 |
| TELECOMMNCTNS-WIRELESS | 2.83 | 2.84 | -9% | 13 | 22 |
| INSURANCE-PROP/CAS/TITLE | 2.84 | 2.80 | 1% | 35 | 21 |
| AGRICULTURAL OPERATIONS | 2.86 | 2.86 | 14% | 2 | 1 |
| MACHINERY-GEN INDUSTRIAL | 2.86 | 2.74 | -3% | 19 | 11 |
| ENERGY-ALTERNATE SOURCES | 2.86 | 2.71 | -5% | 1 | 4 |
| RETAIL-DRUG STORES | 2.86 | 3.00 | -8% | 1 | 11 |
| RETAIL-CONSUMER ELECT | 2.88 | 2.88 | 6% | 19 | 3 |
| SCHOOLS | 2.88 | 3.06 | 4% | 5 | 9 |
| FINANCE-LEASING COS | 2.88 | 3.00 | 3% | 1 | 0 |
| FINANCE-SBIC & COMMRCL | 2.91 | 2.91 | 8% | 4 | 2 |
| MINING-GOLD | 2.91 | 2.82 | 7% | 15 | 20 |
| BUSINESS SERVICES | 2.91 | 2.89 | -2% | 24 | 31 |
| UTILITY-TELEPHONE | 2.92 | 3.02 | 1% | 27 | 25 |
| ELEC-MISC COMPONENTS | 2.93 | 2.93 | 1% | 38 | 21 |
| METAL PROC & FABRICATION | 2.93 | 2.73 | -6% | 3 | 6 |
| MEDICAL-HOSPITALS | 2.93 | 3.27 | -6% | 4 | 25 |
| FURNITURE | 2.94 | 3.12 | 1% | 7 | 8 |
| FINANCE-SAVINGS & LOAN | 2.94 | 2.99 | -3% | 1 | 16 |
| OIL & GAS-PROD/PIPELINE | 2.94 | 2.88 | -5% | 6 | 18 |
| PAPER & PAPER PRODUCTS | 2.95 | 3.10 | 2% | 15 | 9 |
| MEDICAL-BIOMED/GENETICS | 2.96 | 2.95 | -1% | 99 | 92 |
| TELECOMMUNICATION EQUIP | 2.96 | 2.99 | -2% | 46 | 58 |
| CHEMICALS-DIVERSIFIED | 2.97 | 3.00 | 4% | 22 | 18 |
| ELEC-SEMICONDUCTORS | 2.97 | 2.91 | -3% | 55 | 72 |
| BANKS-WEST | 2.98 | 3.02 | 0% | 7 | 8 |
| COMPUTER-SOFTWARE | 2.99 | 2.96 | -1% | 61 | 79 |
| CONTAINERS-METAL/GLASS | 3.00 | 3.20 | 18% | 6 | 1 |
| PAINTS & ALLIED PRODUCTS | 3.00 | 2.67 | 13% | 3 | 0 |
| PRINTING-COMMERCIAL | 3.00 | 3.10 | 10% | 3 | 0 |
| BLDG & CONST PROD-MISC | 3.00 | 2.71 | 8% | 5 | 3 |
| FOOD-CANNED | 3.00 | 3.00 | 6% | 2 | 0 |
| FOOD-DAIRY PRODUCTS | 3.00 | 3.00 | 5% | 1 | 0 |
| ELECTRONIC PARTS DISTRIB | 3.00 | 2.43 | 5% | 3 | 0 |
| SOAP & CLNG PREPARATNS | 3.00 | 3.25 | 4% | 4 | 2 |
| MINING-SILVER | 3.00 | 2.86 | 3% | 2 | 2 |
| MEDICAL INSTRUMENTS | 3.00 | 3.00 | 1% | 4 | 5 |
| TRANSPORTATION-AIRLINE | 3.00 | 3.09 | 1% | 18 | 19 |
| ENGINES-INT COMBUSTION | 3.00 | 3.00 | 0% | 0 | 0 |
| COMPUTER-MINI | 3.00 | 2.67 | 0% | 1 | 1 |
| RETAIL-MAJOR DEPT STRS | 3.00 | 3.00 | 0% | 1 | 1 |
| TOBACCO | 3.00 | 3.11 | -1% | 1 | 2 |
| MEDICAL INFORMATION SYSTEMS | 3.00 | 3.07 | -2% | 1 | 2 |
| RETAIL/WHLSLE-AUTO PARTS | 3.00 | 3.11 | -3% | 4 | 4 |
| CONSUMER PROD-MISC DISCRECTN | 3.00 | 2.88 | -3% | 4 | 2 |
| OIL & GAS-U S INTEGRATED | 3.00 | 3.17 | -3% | 17 | 17 |
| MEDIA CONGLOMERATES | 3.00 | 3.00 | -4% | 3 | 2 |
| MACHINE-TOOLS & REL PROD | 3.00 | 2.83 | -12% | 3 | 2 |
| ADVERTISING | 3.00 | 2.86 | -12% | 3 | 12 |
| OFFICE AUTOMATION & EQP | 3.00 | 3.13 | -13% | 1 | 4 |
| RETAIL-JEWELRY STORES | 3.00 | 3.00 | -15% | 0 | 6 |
| PUBLISHING-BOOKS | 3.00 | 3.40 | -15% | 0 | 3 |
| FOOD ITEMS-WHOLESALE | 3.00 | 3.00 | -19% | 1 | 5 |
| TRANSPORT-AIR FREIGHT | 3.00 | 2.83 | -26% | 11 | 6 |
| FUNERAL SVCS & REL | 3.00 | 3.00 | -30% | 0 | 2 |
| RETAIL-CONVENIENCE STRS | 3.00 | 3.50 | -33% | 0 | 2 |
| MACHINERY-ELEC UTILITY | 3.00 | 3.00 | -50% | 0 | 2 |
| MEDICAL-DRUGS | 3.03 | 2.97 | -5% | 56 | 76 |
| LEISURE & RECREATION-GAMING | 3.03 | 2.94 | -8% | 18 | 21 |
| POLLUTION CONTROL EQ & SVS | 3.04 | 2.93 | -2% | 7 | 10 |
| TRANSPORTATION-TRUCK | 3.04 | 2.96 | -12% | 5 | 28 |
| COMPUTER-STORAGE DEVICES | 3.05 | 2.91 | 1% | 11 | 15 |
| LASERS-SYS/COMPONENTS | 3.06 | 2.94 | 5% | 3 | 4 |
| RETAIL-SUPERMARKETS | 3.06 | 2.88 | -3% | 4 | 6 |
| HOTELS & MOTELS | 3.06 | 3.12 | -6% | 6 | 14 |
| BANKS-SOUTHWEST | 3.07 | 3.07 | -1% | 2 | 2 |
| LEISURE & RECREATION SVCS | 3.07 | 3.00 | -4% | 8 | 18 |
| BEVERAGES-ALCOHOLIC | 3.08 | 2.87 | 14% | 9 | 1 |
| COMPUTER-INTEGRATED SYSTEMS | 3.08 | 3.13 | 2% | 4 | 10 |
| REIT-EQUITY TRUST | 3.08 | 3.11 | -4% | 45 | 51 |
| TRANSPORTATION-SHIP | 3.09 | 3.15 | 9% | 19 | 7 |
| BANKS-SOUTHEAST | 3.09 | 3.05 | -4% | 11 | 18 |
| INTERNET SERVICES | 3.09 | 3.09 | -12% | 12 | 31 |
| UTILITY-GAS DISTRIBUTION | 3.10 | 3.31 | -8% | 6 | 17 |
| FOOD-MISC/DIVERSIFIED | 3.11 | 3.24 | 8% | 20 | 7 |
| MEDICAL-GENERIC DRUGS | 3.11 | 3.33 | 7% | 6 | 3 |
| COMPUTER-NETWORKS | 3.11 | 3.26 | -1% | 16 | 20 |
| INSTRUMENTS-SCIENTIFIC | 3.12 | 3.25 | 4% | 1 | 2 |
| COMPUTER-SERVICES | 3.12 | 3.05 | 0% | 40 | 42 |
| TEXTILE-APPAREL MFG | 3.12 | 3.11 | -9% | 6 | 17 |
| ELEC MEASRNG INSTRUMENTS | 3.13 | 2.93 | 13% | 10 | 5 |
| CHEMICALS-SPECIALTY | 3.14 | 3.18 | -8% | 8 | 10 |
| BANKS-MIDWEST | 3.15 | 3.28 | 0% | 3 | 7 |
| FINANCE-MRTG & REL SVC | 3.15 | 3.00 | -4% | 4 | 5 |
| BROADCASTING-RADIO/TV | 3.16 | 3.25 | -14% | 8 | 43 |
| PUBLISHING-PERIODICALS | 3.18 | 2.92 | -16% | 2 | 4 |
| COMPUTER-MICRO | 3.20 | 3.00 | 30% | 6 | 7 |
| INTERNET CONTENT | 3.20 | 3.21 | 2% | 6 | 7 |
| BLDG PROD-LIGHTING FIXT | 3.20 | 2.80 | -12% | 1 | 2 |
| AUTO/TRUCK-REPLACE PRTS | 3.20 | 3.00 | -24% | 0 | 4 |
| RETAIL-FOOD & RESTAURANTS | 3.21 | 3.31 | 3% | 44 | 20 |
| MEDICAL PRODUCTS | 3.21 | 3.38 | -5% | 13 | 56 |
| CABLE TV | 3.21 | 3.32 | -10% | 14 | 28 |
| MEDICAL/DENTAL-SUPPLIES | 3.21 | 3.15 | -11% | 4 | 16 |
| OIL REFINING & MARKETING | 3.22 | 3.17 | -3% | 16 | 26 |
| MEDICAL-WHSLE DRG/SUND | 3.22 | 3.00 | -4% | 0 | 1 |
| COMPUTER-PERIPHERAL EQ | 3.22 | 3.06 | -4% | 5 | 6 |
| ELECTRONIC COMMERCE | 3.22 | 3.33 | -13% | 2 | 8 |
| BANKS-NORTHEAST | 3.23 | 3.31 | -1% | 7 | 19 |
| TOOLS-HAND HELD | 3.25 | 3.50 | 2% | 1 | 0 |
| BUSINESS INFORMATION SERVICES | 3.25 | 3.20 | 1% | 9 | 3 |
| COMPUTER-GRAPHICS | 3.25 | 3.00 | -3% | 12 | 5 |
| TELECOMMUNICATIONS SVCS | 3.25 | 3.00 | -5% | 4 | 3 |
| MEDICAL-HLTH MAINT ORG | 3.27 | 3.20 | 3% | 5 | 3 |
| UTILITY-WATER SUPPLY | 3.27 | 3.45 | -43% | 1 | 11 |
| CHEMICALS-PLASTICS | 3.29 | 3.14 | 2% | 5 | 2 |
| RETAIL-HOME FURNISHINGS | 3.29 | 3.43 | -11% | 7 | 18 |
| OIL & GAS-U S EXPLO & PROD | 3.30 | 3.35 | -28% | 29 | 141 |
| INTERNET SOFTWARE | 3.31 | 3.16 | -17% | 5 | 20 |
| RETAIL-MISC/DIVERSIFIED | 3.31 | 3.21 | -18% | 18 | 77 |
| MOVIE/TV PRODUCTION/DISTRIB | 3.31 | 3.23 | -21% | 8 | 14 |
| PUBLISHING-NEWSPAPERS | 3.31 | 3.13 | -40% | 1 | 62 |
| MACHINERY-MATERIAL HDLG | 3.33 | 3.33 | 0% | 0 | 0 |
| AUTO/TRUCK-ORIGINAL EQP | 3.33 | 3.44 | -5% | 2 | 13 |
| FINANCE-PUBLIC TD INV FD | 3.33 | 3.00 | -8% | 0 | 3 |
| PRECIOUS METALS/JEWELRY | 3.33 | 3.67 | -17% | 0 | 1 |
| TEXTILE-HOME FURNISHING | 3.33 | 2.67 | -35% | 2 | 7 |
| RETAIL-MAIL ORDER & DIRECT | 3.38 | 3.00 | -7% | 7 | 7 |
| INSURANCE-BROKERS | 3.38 | 3.38 | -8% | 0 | 5 |
| ENGINEERING/R&D SVCS | 3.38 | 3.38 | -13% | 0 | 6 |
| INDSTRL AUTOMTN/ROBOTICS | 3.40 | 2.80 | -5% | 0 | 1 |
| BLDG-RESIDENT/COMMRCL | 3.43 | 3.52 | -7% | 3 | 16 |
| MEDICAL-OUTPNT/HM CARE | 3.46 | 3.31 | -7% | 10 | 20 |
| RETAIL-DISCOUNT & VARIETY | 3.47 | 3.33 | -9% | 11 | 27 |
| TEXTILE-MILL PRODUCTS | 3.50 | 3.50 | 0% | 0 | 0 |
| OFFICE SUPPLIES & FORMS | 3.50 | 3.50 | 0% | 0 | 0 |
| MACHINERY-FARM | 3.50 | 3.67 | -1% | 1 | 2 |
| LEISURE & RECREATION PROD | 3.50 | 3.19 | -19% | 1 | 10 |
| REIT-MORTGAGE TRUST | 3.52 | 3.61 | -19% | 6 | 15 |
| COAL | 3.57 | 3.57 | -9% | 2 | 11 |
| BLDG-MOBILE/MFG & RV | 3.57 | 3.43 | -32% | 0 | 6 |
| TOYS/GAMES/HOBBY PROD | 3.60 | 3.40 | -2% | 1 | 12 |
| RETAIL/WHLSLE COMPUTERS | 3.60 | 3.40 | -28% | 1 | 14 |
| FOOD-FLOUR & GRAIN | 3.67 | 3.33 | 6% | 1 | 0 |
| LINEN SUPPLY & RELATED | 3.67 | 3.33 | -28% | 2 | 6 |
| COMPUTER-MAINFRAMES | 3.67 | 3.67 | -56% | 0 | 3 |
| REAL ESTATE DEVELOPMENT | 3.75 | 3.25 | 0% | 0 | 0 |
| MINING-IRON | 4.00 | 4.00 | 0% | 0 | 0 |
| FOOD-MEAT PRODUCTS | 4.00 | 3.86 | -5% | 3 | 4 |
| PHOTO EQUIPMENT & SUP | 4.00 | 4.00 | -25% | 0 | 2 |
| FOOD-CONFECTIONERY | 4.00 | 3.67 | -27% | 0 | 8 |
| OIL & GAS-U S ROYALTY TR | 4.00 | 4.00 | -100% | 0 | 1 |
| RUBBER-TIRES | 4.33 | 4.00 | -20% | 2 | 3 |
| METAL PROD-FASTENERS | 5.00 | 5.00 | 0% | 0 | 0 |
| GLASS PRODUCTS | 5.00 | 4.50 | -14% | 0 | 2 |
*Total number of estimates for this fiscal year’s earnings (primarily 2006) revised upwards or downwards over the past four weeks.
^Net percentage of total estimates for this fiscal year’s earnings (primarily 2006) that have been revised upwards. This number is calculated by subtracting the number of estimates revised downwards over the past four weeks from the number of estimates revised upwards over the past four weeks and dividing this total by the total number of next fiscal year estimates.
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First-quarter earnings season kicks off this week with Alcoa (AA) reporting today, after the close. The company is projected to report a profit of 50 cents per share. AA has missed expectations three times during the past five quarters.
Despite Alcoa’s disappointments, the outlook for multiple commodity-related groups is very positive. Metal and oil groups dominate the industry rankings. The strong showing is not surprising given the continuing rally in commodity prices. Last week, oil neared $70 a barrel and silver is quickly becoming the metal du jour.
Onshore driller Patterson-UTI Energy (PTEN) recently delivered a very impressive fourth-quarter report. The company credited strong demand for its services, along with a “scarcity of land-based drilling rigs” for record revenues and earnings. PTEN anticipates activating 30 rigs this year, which would equate into an approximate 10% increase in total rigs. Within the past two weeks, eight of the 15 covering analysts have boosted their estimates for 2006, resulting in a 26-cent increase in the consensus estimate. The new estimate calls for a full year profit of $3.64 per share. Value oriented-investors should note that this forecast translates into a forward-looking P/E multiple of less than 10.
Estimates for Bronco Drilling Company (BRNC) have also been rising over the past few weeks. The positive revisions are particularly notable because a recently completed secondary offering included 1.7 million shares sold by the company. First-quarter estimates are up 10% from a month ago (43 cents versus 39 cents) and full year estimates are up 8% ($2.20 versus $2.03).
Although gold did reach $600 an ounce this week, all that glitters may actually be silver. May contracts have spiked by nearly 25% since Mar 1. A forthcoming silver ETF is pending approval from the SEC. In the meantime, Silver Wheaton (SLW) offers the opportunity for investors to get exposure to the surging metal. SLW, a Zacks #2 Rank stock, receives 100% of its revenues from silver production. More importantly, analysts have raised their forecasts for both full quarter and full year earnings. Silver Wheaton will report first quarter earnings on Apr 20.
The other story in the metal sector is steel. Last week, the Wall Street Journal reported that U.S. shipments were up 3.5% in January and February. Prices are also rising, as was evidenced by recently announced price increases of 6-9% by ATI Allegheny Ludlum, a unit of Allegheny Technologies (ATI). Analysts are paying attention to the rise in prices. First-quarter and full year estimates for ATI have been hiked by 3% over the past 30 days. Analysts have also upwardly revised estimates on Maverick Tube (MVK) and Olympic Steel (ZEUS).
Overall, first quarter earnings should be strong. To date, 109 companies within the Zacks Rank universe1 have reported – all of which operate on a fiscal year that deviates from the traditional calendar year. Within this small group, 63 companies have topped expectations and 27 have missed.
A complete listing of the Zacks Sector Rank and Industry Rank scores is presented in the tables below. Sector Rank is calculated by averaging the Zacks Rank for all of the industries within a given sector. Industry Rank is calculated by averaging the Zacks Rank for all covered companies within a given industry.
Charles Rotblut, CFA is a senior market analyst for Zacks.com. He can be reached at crotblut@zacks.com
1The Zacks Rank is assigned to companies with earnings estimates made available by brokerage analysts. The Zacks’ database contains earnings estimates for approximately 4400 companies.
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Revised Up*
Revised Down*
*Total number of estimates for this fiscal year’s earnings (primarily 2006) revised upwards or downwards over the past four weeks.
^Net percentage of total estimates for this fiscal year’s earnings (primarily 2006) that have been revised upwards. This number is calculated by subtracting the number of estimates revised downwards over the past four weeks from the number of estimates revised upwards over the past four weeks and dividing this total by the total number of next fiscal year estimates.