Earnings Preview for Sep 14-18

This week brings the initial batch of third-quarter results. Seven early reporters from the S&P 500 - all of whom have quarters ending in August - will report: Adobe Systems (ADBE), Best Buy (BBY - Snapshot Report), Discover Financial Services (DFS), FedEx (FDX), Kroger (KR), Oracle (ORCL) and Pall (PLL). In total, we will see results from 20 companies.
So how will the third-quarter look? The Zacks Consensus Estimate calls for S&P 500 earnings of $13.50 per share, a 15.4% decline from a year prior. Going back to the week's events, the economic calendar will stay busy with inflation, manufacturing and housing data being released. * Tuesday: August Producer Price Index (PPI), August retail sales, September Empire State survey, July business inventories * Wednesday: August Consumer Price Index (CPI), August industrial production and capacity utilization, September NAHB housing market index, weekly crude inventories, weekly mortgage applications * Thursday: August housing starts and building permits, September Philadelphia Fed survey, weekly initial jobless claims, weekly natural gas inventories
President Barack Obama will speak about the financial crisis on Monday, which is also the anniversary of Lehman Brothers' collapse. The same day, Fed Governor Elizabeth Duke and Richmond Federal Reserve Bank President Jeffrey Lacker will give speeches. Duke will discuss regulation and accounting at the AICPA's annual conference in Washington D.C. Lacker will appear before the Charlotte chapter of the Risk Management Association.
Friday will be a quadruple witching day. Stock option contracts, stock futures contracts, market index options and market futures contracts will all expire. This could lead to increased volatility.
We are in a fear and greed market with a relatively small group of traders playing hot potato. Bonds are doing extremely well (fear), while the S&P 500 continues move higher (greed). It doesn't make sense, but stocks are trending higher. Dow 10,000 is only a few good days away and the fast money remains in control.
Companies That Could Issue Positive Earnings Surprises One analyst just raised his fiscal third-quarter profit forecast on Adobe Systems (ADBE). The revision pushed the Zacks Consensus Estimate a penny higher to 28 cents per share. The most accurate estimate is more bullish at 32 cents per share. Though the software company has only matched expectations over the past 2 quarters, it did top during the previous 4 quarters. Adobe is scheduled to report on Tuesday, Sep 15, after the close of trading.
Three analysts raised their fiscal second-quarter projections on Best Buy (BBY) over the past few weeks. The changes have resulted in a Zacks Consensus Estimate of 41 cents per share, a penny higher than the average forecast of a month ago. The most accurate estimate is slightly more bullish at 42 cents per share. BBY has topped expectations for 3 consecutive quarters. Best Buy is scheduled to report on Tuesday, Sep 15, before the start of trading.
FedEx Corporation (FDX) preannounced fiscal first-quarter earnings of 58 cents per share today. The number is well above both the company's guidance and the Zacks Consensus Estimate of 43 cents per share. Fiscal second-quarter guidance also looks strong at a range of 65 to 95 cents per share. Though the surprise should be baked into the price, if reaction to the conference call is favorable, there is the possibility of additional upside. FDX is scheduled to report on Thursday, Sep 17, before the start of trading.
Companies That Could Issue Negative Earnings Surprises Earnings estimate trends are not providing a clear indication that any of the scheduled companies will disappoint.

by Charles Rotblut http://www.zacks.com/.