Zacks Earnings Preview: Best Buy Co., Gamestop Corporation and Sonic Corporation

Zacks Earnings Preview: Best Buy Co., Gamestop Corporation and Sonic Corporation

For Immediate Release

Chicago, IL - March 23, 2009 - Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Best Buy Co. (BBY - Analyst Report), Gamestop Corporation (GME - Analyst Report) and Sonic Corporation (SONC - Snapshot Report). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

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The Week's Events

This will be a quiet week for earnings, with just 58 companies confirmed to report. There are 10 S&P 500 members in this group, including Best Buy Co. (BBY - Analyst Report), Gamestop Corporation (GME - Analyst Report), Lennar Corporation (LEN - Snapshot Report), Tiffany & Co. (TIF - Analyst Report) and Walgreen Company (WAG - Analyst Report).

Housing data will headline the first half of the week with existing home sales published on Monday and new home sales published on Wednesday.

• Monday: February existing home sales
• Wednesday: February new home sales, February durable goods orders, weekly crude inventories
• Thursday: Final fourth-quarter GDP, weekly initial jobless claims
• Friday: March University of Michigan consumer confidence (revised), February personal spending and income

Fed Chairman Ben Bernanke will testify about American International Group, Inc. (AIG - Snapshot Report) in front of a House committee on Tuesday.

The markets are coming off of overbought conditions, so a continued pullback seems likely. Just remember that wildcard events (e.g. initiatives from the Obama administration, credit rating downgrades, bank announcements, etc.) still remain the primary drivers of market sentiment. It is also possible that we could get some first-quarter warnings as well.

Companies That Could Issue Positive Earnings Surprises

Fiscal fourth-quarter profit forecasts for Best Buy Co. (BBY - Analyst Report) were revised higher by 5 of the 20 covering brokerage analysts during the past 7 days. The revisions pushed the consensus earnings estimate up 2 cents to $1.39 per share. The most accurate estimate is slightly more bullish at $1.40 per share. It is possible that the revisions reflect the market share gained from the demise of Circuit City. BBY has topped expectations during 3 out of the last 4 quarters. Best Buy is scheduled to report on Thursday, Mar 26, before the start of trading.

Last month, Gamestop Corporation (GME - Analyst Report) narrowed its fiscal fourth-quarter guidance to between $1.33 and $1.34, the high-end of its previous forecast. In response, 5 brokerage analysts raised their quarterly projections. These changes moved the consensus earnings estimate 1 cent higher to $1.34 per share. The video game retailer has topped expectations for 8 consecutive quarters. GME is scheduled to report on Thursday, Mar 26, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

Sonic Corporation (SONC - Snapshot Report) has missed expectations for 3 consecutive quarters. Ahead of the fast food chain's fiscal second-quarter report, the majority of the 17 covering brokerage analysts have cut their forecasts. The consensus earnings estimate of 9 cents per share is 2 cents below the average forecast of a month ago. Sonic is scheduled to report on Monday, Mar 23, after the close of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com.

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About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com