Zacks Earnings Trends Highlights: Alcoa, FedEx, Nike, Procter & Gamble and Ford

Zacks

 

For Immediate Release

 

Chicago, IL – July 9, 2012 – Zacks Director of Research Sheraz Mian says the second-quarter results from 26 S&P 500 companies have been painting a less-than-inspiring earnings picture.

.  

2Q Early Signs: Not Looking Too Good

 

Expectations for the second quarter 2012 earnings season are coming down as the early reporting companies highlight global growth concerns. A number of the 26 companies that have already reported results -- and many of those that have pre-announced -- have been pointing towards the slowdown in China and problems in Europe.

It is perhaps too early to draw any firm conclusions from the small sample of companies at our disposal. But it would make sense for the earnings picture to deteriorate given the tough macro-backdrop all over the world. There is hardly any place in the world at present that can be described as in good economic shape. Europe is in recession; China, India and Brazil are slowing down; and the outlook for the U.S. economy does not look that favorable, either.

The combination of these macro headwinds is showing up in down-trending earnings forecasts, with current expectations for second-quarter earnings to be up only 0.6%. This is down from growth expectation of 2.3% at the end of May and close to 5% in mid-April. Excluding Finance, this modest growth turns to a 5% decline.

Key Points

  • The second-quarter 2012  reporting season will ‘unofficially’ get underway next week with Alcoa’s (AA) results, though ‘officially’ earnings season started last month, and we have results in hand from 26 S&P 500 companies already.
  • These early reports do not paint a very inspiring picture of second quarter earnings season. Not only do the growth numbers for these companies compare unfavorably to the prior quarter, but the tone of management guidance has also been underwhelming.
  • On the earnings calls and pre-announcements, we are starting to hear a lot more about global growth uncertainties than was the case last quarter. We saw this with the earnings results from FedEx (FDX) and Nike (NKE) and pre-announcements from operators like Procter & Gamble (PG), Ford (F) and others.
  • Expectations for the 95% of companies still to report results continue to come down, with total earnings  expected to increase 0.6% from the same period last year. This growth expectation is down from 2.3% at the end of May and close to 5% as the first quarter reporting season was getting into high gear in early April. This growth expectation reflects a 0.3% drop in revenue and an 8-basis point expansion in net margins.

 Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: http://at.zacks.com/?id=7160

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

                                                                        

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5186

 

About Zacks

 

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

 

Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.  

 

The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription at http://at.zacks.com/?id=5187

 

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

 

Join us on Facebook:  http://www.facebook.com/ZacksInvestmentResearch

 

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

 

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: Sheraz Mian

Company: Zacks.com

Phone: 312-265-9211

Email: pr@zacks.com

Visit: www.Zacks.com

Read the analyst report on AA

Read the analyst report on FDX

Read the analyst report on NKE

Read the analyst report on PG

Read the analyst report on F

Zacks Investment Research



More From Zacks.com

Rates

View Comments (0)