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Previewing Earnings for Salesforce.com, H-P, Dollar Tree, A&F and 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 25- to 40-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 results, including Hewlett-Packard (HPQ), Dollar Tree (DLTR), Abercrombie & Fitch (ANF) Dick's Sporting Goods (DKS), DSW (DSW), and Salesforce.com (CRM).

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

Dollar Tree has beaten analyst EPS estimates each of the past eight quarters. Over that period, the stock has risen the next session four of eight quarters. Seasonally, the stock has risen three times in the last four years..

Last quarter, Dollar Tree reported a Q4 profit of $228.6 million, or $1.01 per share, up 26% from $187.9 million, or 80 cents per share, in the year- earlier period. The results were at the high end of the 97 cents to $1.02 per share that the company had forecast in November and ahead of the 99-cent per share Wall Street consensus estimate.

Sales grew by 15.4% to $2.25 billion, aided by $125 million in sales from an extra week during the quarter. The Street was looking for $2.23 billion in revenue. Sales on a same-store basis grew by 2.4% on top of a 7.3% gain in the year- earlier period.

The company said sales growth was relatively consistent across the country as all zones achieved positive comp-store sales. The highest comps came from New England and the Midwest, followed closely by the Southwest, the Southeast, the Far West, and the Mid-Atlantic.

Sales growth came from a mix of both basic and discretionary products. The top- performing categories include housewares and home products, stationery, healthcare products, party supplies, food and beverages.

Dollar Tree guided for EPS of 53 to 58 cents in the first quarter on sales of $1.84 billion to $1.89 billion on a low single-digit increase in same-store sales. Wall Street analysts were projecting EPS of 58 cents on $1.87 billion in sales at the time. The EPS consensus has since moved to 57 cents on the same level of sales. ...

Outside of earnings, Dollar Tree has been our favorite in the dollar-store space for awhile. The $1 pricing limit can lead to more impulse purchases by its customers than at other retailers because it's only a dollar. The fact the merchandise can vary a bit from store to store certainly hasn't hurt its growth. Management predicted that the company's growth would also accelerate in the second half of the year, while acknowledging the change in the payroll tax law and economic pressure generally was making customers cautious. ...

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 correct calls BullMarket.com made for Q1 so far were:

  • to be bullish on Toll Brothers (TOL) ahead of earnings.
  • to be bearish on Deere (DE) ahead of earnings.
  • to be bullish on NetApp (NTAP) ahead of earnings.
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