Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Circuit City (NYSE: CC) and Micron Technology (NYSE: MU). To see more earnings analysis, visit http://at.zacks.com/?id=3207.
Earnings Preview is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.
Two religious holidays will have an impact on trading activity this week. Passover starts today at sundown. Trading volume could lighten in the afternoon as some traders will likely leave early to help prepare for first night seders. Apr 6 is Good Friday and the U.S. markets will be closed in observance. Profit taking could occur late on Thursday if traders are nervous about holding positions over a three day weekend.
Only 27 companies are scheduled to report this week. Five are in the S&P 500: Best Buy (NYSE: BBY), Circuit City (NYSE: CC), Monsanto (NYSE: MON), Micron Technology (NYSE: MU) and Constellation Brands (NYSE: STZ). Although first-quarter earnings season will “officially” start on Apr 10, the bulk of profit reports will not start being released until after tax day.
There have been 72 first-quarter reports from companies within the Zacks Rank universe(a) released so far. Positive surprises are outnumbering negative surprises by a margin of 1.9:1. Average growth is 7.7%, but this number is dragged down by two that companies swung to a loss after a reporting a profit a year earlier. Excluding these companies changes the average growth rate to 13.4%. Among companies within the S&P 1500 that have reported, the average growth rate is 10.1%.
On the economic front, the ISM will release its March manufacturing index this morning. March vehicle sales data will be published on Tuesday. Wednesday brings February factory orders and the March ISM services index. The weekly initial jobless claims report will be published on Thursday. March employment data is scheduled for release on Friday, even though the markets will be closed. (This could affect trading on Thursday afternoon.) February wholesale trade and consumer credit numbers are also on tap.
Companies That Could Issue Negative Earnings Surprises During the Week of Apr 2 - 6
Earlier this week, Circuit City (NYSE: CC) projected that fiscal 2007 domestic same-stores sales growth likely came in at 6% versus previous guidance for 7% to 8% growth. One-third of the 21 covering analysts promptly cut their forecasts for fourth-quarter earnings in response, causing the consensus estimate to fall two cents to 64 cents per share. The Most Recent Consensus is more bearish at 62 cents per share. The electronics retailer missed third-quarter expectations by a margin of 14 cents per share. Circuit City is scheduled to report on Wednesday, Apr 4, before the start of trading.
Concerns about DRAM pricing have caused brokerage analysts to cut their quarterly projections ahead of Micron Technology’s (NYSE: MU) fiscal second-quarter report. During the past 30 days, six analysts have revised their projections. The combined cuts have resulted in a consensus estimate that calls for profits of just two cents per share, five cents below the forecast of just 30 days ago. The Most Recent Consensus is even more bearish and calls for a loss of six cents per share. MU has missed expectations once in the past two quarters. Micron Technology is scheduled to report on Wednesday, Apr 4.
Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206.
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