For Immediate Release
Chicago, IL – February 7, 2010 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Principal Financial (PFG - Analyst Report) , Polo Ralph Lauren (RL - Analyst Report) , FMC Corp. (FMC - Analyst Report) , Sara Lee and Avon (AVP - Analyst Report) . To see more earnings analysis, visit https://at.zacks.com/?id=3207.
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Historically the best indicators of firms likely to report positive surprises are a recent history of positive surprises and rising estimates going into the report. The Zacks Rank is also a good indicator of potential surprises.
Similarly a recent history of earnings disappointments, cuts in the average estimate for the quarter in the month before the report is due and a poor Zacks Rank (#4 or #5) are often red flags pointing to a potential disappointing earnings report.
Potential Positive Surprises:
Principal Financial (PFG - Analyst Report) is expected to report $0.68 vs. $0.62 last year. Last time out it reported a 7.92% positive surprise, and over the last month the mean estimate for the about-to-be-reported quarter has increased by 1.76%. PFG is a Zacks #2 Ranked stock.
Polo Ralph Lauren (RL - Analyst Report) is expected to report $1.28 vs. $1.10 last year. Last time out it reported a 24.40% positive surprise, and over the last month the mean estimate for the about-to-be-reported quarter has increased by 1.09%. RL is a Zacks #2 Ranked stock.
FMC Corp. (FMC - Analyst Report) is expected to report $1.03 vs. $0.94 last year. Last time out it reported a 0.2.70% positive surprise, and over the last month the mean estimate for the about-to-be-reported quarter has increased by 0.42%. FMC is a Zacks #2 Ranked stock.
Potential Negative Surprises:
Sara Lee is expected to report $0.25 vs. $0.36 last year. Last time out it reported a 27.78% disappointment, and over the last month the mean estimate for the about-to-be-reported quarter has dropped by 5.44%. SLE is a Zacks #5 Ranked stock.
Avon (AVP - Analyst Report) is expected to report $0.67 vs. $0.69 last year. Last time out it reported an 12.77% disappointment, and over the last month the mean estimate for the about-to-be-reported quarter has been cut by 0.93%. AVP is a Zacks #4 Ranked stock.
Dirk Van Dijk, CFA, is the Chief Equity Strategist for Zacks.com.
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 (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
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Contact: Dirk Van Dijk, CFA