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Next Week's Top 10 Earnings on Deck (HPQ, TSN, CPB, LDK, TECD, BKS, BGP, JCG, DLTR, DE)

Earnings season has mostly wound down, but as always at least some major companies are reporting earnings.  Some are actually market-movers as well and it is a short week with earnings out only Monday and Tuesday, with a few on Wednesday.  On deck are Hewlett-Packard Company (NYSE: HPQ), Tyson Foods Inc. (NYSE: TSN), Campbell Soup Co. (NYSE: CPB), LDK Solar Co. Ltd. (NYSE: LDK), Tech Data Corp. (NASDAQ: TECD), Barnes & Noble, Inc. (NYSE: BKS), Borders Group, Inc. (NYSE: BGP), J. Crew Group, Inc. (NYSE: JCG), Dollar Tree Inc. (NASDAQ: DLTR), and Deere & Co. (NYSE: DE).

We have included estimates from Thomson Reuters, relative data on peers and recent developments, and relative performance on each where it was applicable.

The biggest on Monday is Hewlett-Packard Company (NYSE: HPQ) in the PC and It services sector.  We would note that estimates may have just been unofficially guided down after Dell’s rotten quarter, but we already have recent guidance from H-P.  Thomson Reuters has estimates of $1.13 EPS and $30.36 billion in revenues.  Estimates for next quarter are $1.04 EPS and $29.7 billion in revenues.  We are going to hold off on most data going into H-P earnings at least before Monday morning because of last-minute estimate changes based on Dell.  We would note that some of Dell’s woes are due to H-P, and then the Acer netbook and whatever you want to tie into Apple’s gains.  H-P is also really marginalized about what it says Monday because it already lifted guidance when it announced its buyout of 3Com (NASDAQ: COMS).

Tyson Foods Inc. (NYSE: TSN) is on deck Monday.  This may not seem important, but it is to the meat and food supplier companies.  Estimates are $0.26 EPS and $6.89 billion in revenues, and next quarter estimates are $0.15 EPS and $6.59 billion in revenues.  As a producer of chicken, beef, pork, and prepared foods, it will be interesting to see if the H1N1 fears by the public have finally worked themselves out.  The company just named a new CEO this week, which always makes for a wild card report or conference call.

Campbell Soup Co. (NYSE: CPB) has finally gotten off the floor after not participating in the rally.  At $34.13, its 52-week trading is $24.63 to $37.58.  Estimates are $0.81 EPS and $2.28 billion in revenues.  The big question here is what the company sees ahead for off-brand and private-label competition from grocery stores looking for more of the profits to stay in their pockets.  It turns out that Campbell Soup is not recession-proof and has some aspects of a luxury brand when it comes to pinching pennies.  Interestingly enough, this one just raised its dividend by 10%.

LDK Solar Co. Ltd. (NYSE: LDK) is also on deck Monday, and by now may just be a me-too solar earnings report.  It is a loser too as estimates are -$0.10 EPS and $277.2 in revenues.  Next quarter is expected to show -$0.05 EPS and $258.7 million in revenues.

Tech Data Corp. (NASDAQ: TECD) is often overlooked as a key company, but the company offers a broad insight on what is happening in the world of technology products as it gets all the goods from the factories to the end retailers around the globe.  Estimates are $0.70 EPS and $5.31 billion in revenues, and next quarter estimates are $0.82 EPS and $5.63 billion in revenues.  At just under 15-times expected Jan-2010 fiscal earnings, this isn’t expensive, but the performance is high: At $42.08 this one has a 52-week trading range of $14.14 to $44.63.  We’d watch Ingram Micro (NYSE: IM) for a chaser move either way.

We have the big book earnings war on Tuesday with both Barnes & Noble, Inc. (NYSE: BKS) and Borders Group, Inc. (NYSE: BGP) and we’d be sure to make note that these are thinly followed compared to most big retailers.  Barnes & Noble is expected to post -$0.33 EPS and $1.16 billion, but the coming holiday quarter estimates are $1.52 EPS and $2.18 billion in revenues.  Borders Group, Inc. (NYSE: BGP) is expected to post -$0.46 EPS and $630 million in revenues, and the coming important holiday quarter is expected to be $0.92 EPS and $987.9 million in revenues.  While both stocks are up significantly from the lows, neither stock is anywhere close to being a top performer and neither is close to 52-week highs.  There is a move to digital books on e-readers and online pure-plays for selling books or readers buying at Costco, Wal-Mart, and elsewhere.  And dare we say… Most Americans do not read books anymore anyway.  It looks like there are fresh reports that the Nook e-reader from Barnes & Noble is also getting delayed and might not make the Christmas deadline… a win for Amazon and the Kindle.

J. Crew Group, Inc. (NYSE: JCG) is far from a systemic stock, but it will be all over the media when it reports on Tuesday because of the Obama effect.  Michelle Obama has been a boom for J. Crew… to the point that you can’t not notice the premium valuations over other clothing retailers.  Estimates are $0.58 EPS and $407.99 million in revenues, and the estimates for the ever-important holiday season are $0.40 EPS and $435.48 million in revenues.  As far as how this translates to forward numbers, J. Crew trades after a 1.6% drop today to $40.45 at over 25-times the $1.60 EPS estimate for Jan-2010 FY and trades at 21-times the $1.93 EPS estimate for Jan-2011 FY.  With a $40.45, it is also at the top of the $8.02 to $44.29 trading range over the last 52-weeks.  This stock was at $50.00 briefly in early 2008 and above $50.00 in 2007 before the great bear market came to town before Santa.

Dollar Tree Inc. (NASDAQ: DLTR) is also on deck Tuesday, and this can influence all the other dollar stores.  By now you have figured out that dollar stores were the winner in the trade-down economy during the recession.  Estimates are $0.66 EPS on $1.24 billion in revenues.  The coming holiday quarter estimates are $1.35 EPS and $1.53 billion in revenues.  At $48.70 today, its 52-week trading range is $27.61 to $51.72.  That being said, there is little else to watch except for keeping an eye on Dollar General (NYSE: DG), 99 Cents Only Stores (NYSE: NDN), and Family Dollar Stores Inc. (NYSE: FDO).

Deere & Co. (NYSE: DE) has already recovered handily to the point that it is close to 52-week highs.  It reports Wednesday morning, right before everyone disappears to go eat Turkey with their families in America.  Estimates are $0.03 EPS and $4.44 billion in revenues.  Next quarter estimates are $0.23 EPS and $4.06 billion.  At $50.00, it is at the top of the $24.51 to $52.28 trading range over the last 52-weeks. Deere has already announced that it was recalling 452 laid off workers for an Iowa plant, so it would be a shock if suddenly the company announced that business was rolling back over hard.  We will be hoping for raised guidance for its fiscal October-2010 because the $2.68 estimate above the $2.61 EPS estimate for fiscal October-2009, but more importantly because that is 18.6-times forward earnings.  Anything short of raised guidance, by a handy amount, will be a disappointment to us.

We will follow-up on some of these each day next week with much more detailed earnings previews and some earnings reports in the key names.

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JON C. OGG
NOVEMBER 19, 2009