Zacks Industry Rank Analysis Highlights: D.R. Horton, KB Home, Pulte Homes, Allstate, Hartford Financial Services, Travelers, Loews, Humana, Stericycle, C.R. Baird, Celgene, Gilead Sciences, AK Steel, Nucor, Regions Financial and Zions Bancorp

For Immediate Release

Chicago, IL – September 17, 2009 – Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week’s analysis include D.R. Horton (DHI - Analyst Report), KB Home (KBH - Snapshot Report), Pulte Homes (PHM - Snapshot Report), Allstate (ALL - Analyst Report), Hartford Financial Services (HIG - Analyst Report), Travelers (TRV - Snapshot Report), Loews (L - Analyst Report), Humana (HUM - Analyst Report), Stericycle (SRCL - Snapshot Report), C.R. Baird (BCR - Analyst Report), Celgene (CELG - Analyst Report), Gilead Sciences (GILD - Analyst Report), Anadarko Petroleum (APC - Analyst Report), EOG Resources (EOG - Analyst Report), AK Steel (AKS - Analyst Report), Nucor (NUE - Analyst Report), U.S. Steel (X - Analyst Report), Fifth Third (FITB - Analyst Report), Regions Financial (RF - Analyst Report), Suntrust Banks (STI - Snapshot Report) and Zions Bancorp (ZION - Analyst Report).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This week: Third-Quarter Earnings Forecast

Though the economy has stabilized, third-quarter results for the majority of companies will still be below year prior levels.

Per share profits for the S&P 500 are projected to fall 15.4%. The median company is forecast to report a 14% drop in per share earnings. (The difference being that the S&P 500 forecast is a weighted projection.) More than 340 companies may have experienced a year-over-year drop in profits.

On a revenue basis, things are not much better. Median company sales are forecast to have dropped 7.2%.* More than 360 companies are expected to report a year-over-year drop in earnings.

It's important to realize that during July and August 2008, the economy was in fairly good shape. Lehman did not collapse until September 2008. Furthermore, the credit crunch's grip severely tightened over the 2-month span of September and October 2008. As a result, many companies are now facing tough comparisons, meaning year-over-over declines in profits now.

It should be noted, however, that not all comparisons will be difficult. In fact, some industries are forecast to report actual earnings growth.

Industries Likely To Show Growth

Homebuilders

It may sound shocking, but homebuilders are likely to have some of the best year-over-year comparisons in terms of profitability.

There are 2 reasons for this. First, conditions in the housing industry were deteriorating last year, with mortgages becoming increasingly hard to get. Second, the housing market is now stabilizing, as is evidenced by the rising number of new and existing home sales.

This change will allow D.R. Horton (DHI - Analyst Report), KB Home (KBH - Snapshot Report) and Pulte Homes (PHM - Snapshot Report) to encourage shareholders with bottom line improvements by 50% or more. The improvements are relative, however, since all 3 companies will report sizable losses for Q309.

Insurance

Several insurance companies could impress investors with double-digit growth. Though some, like Allstate (ALL - Analyst Report) and Hartford Financial Services (HIG - Analyst Report), have the benefit of prior-year losses, others like Travelers (TRV - Snapshot Report) and Loews (L - Analyst Report) are experiencing true growth. (Revenues and earnings will rise for TRV and L).

The surprisingly calm hurricane season (fingers crossed that it stays this way) has helped property and causality insurers. Nearly all insurance companies have also benefited from the rebound in the financial markets. The economy is a drag, though there seem to be certain segments where premiums are rising.

Health Care

Despite all the talk about reform, profits for the entire medical sector continue to rise. The sector is less economically sensitive and less affected by swings in commodity prices. As result, several medical companies are likely growing both revenues and earnings this quarter.

Those with the strongest growth rates will include Humana (HUM - Analyst Report), Stericycle (SRCL - Snapshot Report), C.R. Baird (BCR - Analyst Report), Celgene (CELG - Analyst Report) and Gilead Sciences (GILD - Analyst Report).

Industries Likely to Report Contraction

Commodity-Related

Commodity-related companies face the toughest year-over-year comparisons. Oil peaked in July 2008 and, though the commodity bubble deflated throughout the remainder of the quarter, profits were still very, very strong. As a result, energy and metals companies are projected to report significant drops in Q309 profits.

In the Energy sector, exploration & production (E&P) companies such as Anadarko Petroleum (APC - Analyst Report) and EOG Resources (EOG - Analyst Report) will report the biggest declines. Among metals companies, AK Steel (AKS - Analyst Report), Nucor (NUE - Analyst Report) and U.S. Steel (X - Analyst Report) could all report losses after large profits in Q308.

Banks

Though government intervention has stabilized much of the financial sector, many banks remain unprofitable. High unemployment, a sustained high level of foreclosures and a weak commercial real estate market are all problem spots for the sector. As a result, analysts are projecting Fifth Third (FITB - Analyst Report), Regions Financial (RF - Analyst Report), Suntrust Banks (STI - Snapshot Report) and Zions Bancorp (ZION - Analyst Report) to post losses.

It's All About Expectations

The one positive for the third-quarter earnings season is that there is a general expectation that the numbers will be bad. Therefore, even those companies that report losses will be measured up against the consensus estimates and not the year prior results. What we could well see is a repeat of second-quarter earnings season, where brokerage analyst forecasts proved to be too pessimistic.

As always, pay attention to guidance and the level of visibility companies have about the fourth quarter and the early part of 2010. The markets will want assurance that business conditions are starting to improve, even if sales still remain at depressed levels.

*12 companies were excluded from the revenue forecasts due to a lack of broker estimates. The inclusion of these companies would have not significantly altered the median revenue forecast.

Zacks "Profit from the Pros " e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5611.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3:1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit From the Pros by going to http://at.zacks.com/?id=5610.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

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