It is hard to believe already, but another earnings season is coming upon us. With both the DJIA and the S&P 500 up 10% or more in the first quarter, the trend of major companies meeting and guiding within expectations is not likely going to create a large rush into stocks. So far, that is about all that the investing community is expecting. That will create a story of individual companies and individual sectors worth your money rather than investing in the broader market if things play out that way.
24/7 Wall St. has created a brief calendar of the major earnings announcements by day. Estimates have come from Thomson Reuters, although we would quickly point out that estimates may change at any time and may have likely changed marginally by the time mid-week gets here. We have also provided color on each.
This week we saw three of our ten suppositions come up which were in our Ten Things That Could Wreck The Bull Market. We also issued a quarter-end piece that was intended to act as the Blueprint for the Bull Market In April as well. Lastly, here are our DJIA dividend hike predictions for April as earnings season kicks off.
One thing needs to be addressed and this has not yet been covered enough by much of the financial press. The strength of the U.S. dollar will impact US exports and that will be something that companies either address that came up of late or which will impact earnings in the second quarter outlook.
Alcoa Inc. (NYSE: AA) will be the first of the DJIA components to report earnings for the first quarter of 2013. Investors always try to use this as a barometer but we would warn against putting so much faith in “The Alcoa Indicator” because the company is troubled and in a hard industry to boot. Look for Alcoa to maintain that the aluminum industry will still be double by the end of this decade. Estimates are $0.10 EPS and a 1.2% drop in revenue to $5.93 billion. Alcoa used to say “You Make The Call” on commercials, but now it simply asks “What Bull Market?” because its stock is down about 5% so far in 2013.
Bed Bath & Beyond Inc. (NASDAQ: BBBY) is set to report on Wednesday and this stock has tried to recover from its past earnings blunders. Estimates are for a 13% earnings gain to $1.68 EPS and a 24% sales gain to $3.4 billion. This retailer’s stock price is up 13% so far in 2013.
Carmax Inc. (NYSE: KMX) will also give us the first real look at auto sale earnings. The car dealer is expected to report earnings of $0.46 EPS on a 10% gain in sales to $2.73 billion. Carmax shares are up 10% so far in 2013.
J B Hunt Transport Services Inc. (NASDAQ: JBHT) will lead the transportation sector earnings with its report on Thursday. The trucker is not always a true proxy, but investors will try to garner what it means for trucking players, then perhaps for rail players, and perhaps even air freight shippers. Estimates are $0.64 EPS on a gain of almost 11% in revenues to $1.29 billion. Just keep in mind that this stock is up a sharp 22% so far in 2013.
Family Dollar Stores Inc. (NYSE: FDO) will report earnings Wednesday and will lead the dollar store chains ahead. Due to a sharp drop right after the first of the year, this stock is down about 6.5% so far in 2013. The dollar store owner and operator is expected to report earnings of $1.23 EPS and a 17% sales gain to $2.89 billion.
J.P. Morgan Chase & Co. (NYSE: JPM) will report earnings on Friday morning. The bank with the fortress balance sheet is expected to report earnings of $1.38 EPS but revenue is expected to be down 5% at $25.96 billion. Book value is $51.30 per share and shares are up just a hair under 10% so far this year despite shares pulling back 6% from the fresh highs.
Wells Fargo & Co. (NYSE: WFC) is also reporting Friday morning and its shares have pulled back about 4% off their highs, but this remains the safest of the big safest banks in America and its stock is still up almost 10% so far in 2013. Estimates are $0.88 EPS on expected flat revenue of $21.58 billion. Wells Fargo trades above its book value.