For Immediate Release
Chicago, IL – June 19, 2013 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Discover Financial (DFS-Free Report), FedEx (FDX-Free Report), Oracle (ORCL-Free Report), Alcoa (AA-Free Report) and Goldman Sachs (GS-Free Report).
To see more earnings analysis, visit http://at.zacks.com/?id=3207.
Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here.
Looking Ahead to Q2 Earnings Season (revised)
We are issuing this revised version of Earnings Preview to address a mistake: earlier, we had mentioned that from Discover Financial (DFS-Free Report) was to have reported earnings yesterday after the bell; the company has not reported and will not report earnings this week.
Alcoa (AA-Free Report) typically gets credited for kicking off each earnings season, but we don’t count Alcoa’s report as the ‘official’ start. In fairness to Alcoa, investors start taking notice of the earnings season only with their release, which for Q2 will happen on July 8th.
As has been the case at the start of recent quarterly earnings cycles, expectations for Q2 earnings season remain quite low. Total earnings for companies in the S&P 500 are expected to be up only +0.6% from the same period last year. This is down from +3.9% growth expected in the quarter in early April. Total earnings were up +2.3% in Q1, but the expectation ahead of the start of the Q1 earnings season was for earnings growth to be in the negative territory.
Finance wasn’t a big driver of aggregate earnings growth for the S&P 500 in Q1, but takes back the lead role in Q2, with total earnings for the sector expected to be up +19.4% and estimates steadily going up. Earnings for the sector were up +7.7% in Q1, which came after many quarters of double-digit growth.
All industries within the Finance sector like the major banks, regional banks, brokers and insurers are expected to have positive growth. But the growth picture is particularly notable for the brokerage and investment management industry such as Goldman Sachs (GS-Free Report), with total earnings for the group expected to be up +39.6% in Q2 after the +2.6% gain in Q1.
Unlike Finance, the earnings picture for the Technology sector, the largest sector in the S&P 500, remains fairly weak. Total earnings for the sector are expected to be down -8.7% from the same period last year, which follows the -3.8% earnings decline in Q1.
Earnings estimates for the sector have been steadily coming down over recent weeks, with the current -8.7% decline down from expected decline of -3.1% in mid-April. The weakest group within the Technology sector is the PC makers, with total earnings for the Computers and Office Equipment industry expected to be down -16.1% in Q2 after the -14.1% decline in Q1. Semiconductors and electronics are other Tech industries with negative earnings growth in the quarter.
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 significantly underperformed the S&P 500 (+3% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.
Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Click to subscribe to this free newsletter today.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 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.
Follow us on Twitter: https://twitter.com/zacksresearch
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.
Zacks Investment Research
800-767-3771 ext. 9339
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
More From Zacks.com