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Previewing Earnings for Cisco, NetApp, Limited Brands & Others

the BullMarket.com Staff

Stocks tend to be most volatile around earnings season, when a good or bad report can make or break it. However, a good or even great earnings report doesn't necessarily translate into a huge pop for a stock.

During earnings season, BullMarket.com publishes a comprehensive 20- to 30-page Earnings Preview report for the week ahead each Friday.

Over the past year, BullMarket.com used the data it has collected to correctly predict investor reactions for approximately two-third of the stocks it's previewed.

In its latest earnings preview, BullMarket.com looks at several popular stocks still set to report this week, including NetApp (NTAP), Limited Brands (LTD), Wal-Mart (WMT), Dollar Tree (DLTR), and Cisco (CSCO).

Here is just a tiny sample of what BullMarket.com wrote about Dollar Tree:

Dollar Tree has beaten analyst EPS estimates each quarter over the past two years. During that time, the stock has risen the next session three of eight quarters. Seasonally, the stock has risen two of the last four years.

Last quarter, the company increased its profits to $116.1 million, or $1.00 per share, from $101.0 million, or 82 cents per share, in the year-earlier period. Sales increased to $1.72 billion from $1.55 billion. The company guided for the current-quarter profit to range from 87 to 93 cents.

Analysts were looking for 92 cents per share in profit on sales of $1.69 billion.

Same-store sales grew by a solid 5.6%, which came on top of a 7.1% comp increase in the year-earlier quarter. Of the 5.6% comp store sales increase, 5.4% came from increased transactions, the company said.

The top-performing categories for the quarter included home products; food, snacks and beverage; health care products; party supplies; household cleaning supplies; and seasonal merchandise. Sales increases in the first quarter came from growth in both basic and variety categories, with basic consumable categories generally growing at a faster pace.

The company said performance in the first quarter was relatively consistent across the country with the highest comps coming from the Mid-Atlantic and the Midwest regions, followed closely by New England and the Southwest. ...

Outside of earnings, there is a lot to like about Dollar Tree's operational performance, growth prospects, and business model. The $1 pricing limit can lead to more impulse purchases by its customers than at other retailers where even a few dollars can lead to a moment of pause. The fact the merchandise can vary a bit from store to store certainly hasn't hurt its sales growth, though it is a markedly different strategy than its competitors follow. ...

The full BullMarket.com earnings analysis includes a look at historical earnings data and EPS trends for the companies above and more; examines past investor reactions to earnings in various contexts; gives options activity analysis; reviews previous-quarter earnings; and gives an opinion on both what earnings will look like and how investors will react based on the aforementioned data points.

Just a few of the recent correct calls BullMarket.com made for Q2 were:

  • to be bullish on Green Mountain (GMCR) ahead of earnings.
  • to be bullish on Fusion-IO (FIO) ahead of earnings.
  • to be bearish on Deere (DE) ahead of earnings.
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