Earnings Preview: Alcoa (AA), Micron Technology (NU), Wells Fargo (WFC), JPMorgan Chase (JPM), Safeway (SW)

 @moranzhang
on October 04 2013 5:43 AM
JPMorgan
A man walks past JP Morgan Chase's international headquarters on Park Avenue in New York July 13, 2012. REUTERS/Andrew Burton

It is routine that stock analysts cut optimistic forecasts as a quarter progresses. But for the third-quarter earnings season, they are remaining more bullish on earnings than is usually the case. A higher bar makes it a bigger challenge for companies to “beat” estimates.

S&P 500 companies have beaten analysts' earnings expectations, on average, by 67 percent over the last four reporting periods.

Wall Street analysts trimmed their estimates for the S&P 500 companies’ third-quarter profits by 2.6 percent during the quarter, according to FactSet. They now expect 3.1 percent of earnings growth, down from 6.5 percent at the beginning of the quarter. This quarter’s cut was the smallest since the first quarter of 2011, which was a strong earnings season for stock.

Over the past five years, analysts have lowered their forecasts by an average of 6.4 percent during the quarter. Over the past 10 years, they cut estimates by an average of 4.2 percent.

Meanwhile, companies themselves have issued negative outlooks for the third quarter at a 5.2-to-1 ratio over positive announcements, the second highest since 2001 and the record was the second quarter when that ratio was 6.3-to-1, according to Thomson Reuters data.

We ran a screen and produced a list of eight notable companies set to report their earnings between Oct. 7 and Oct. 11. We've highlighted their expected reporting dates and times, along with analysts' earnings-per-share (fully reported) and revenue estimates from Reuters, as well as the stocks' year-to-date performances.

Tuesday After Markets Close, or AMC:

Alcoa Inc. (NYSE: AA) is the largest U.S. aluminum producer. The company has a market capitalization of $8.74 billion. It is expected to report FY2013 third-quarter EPS of 9 cents on revenue of $5.72 billion, compared with a loss of 13 cents a share on revenue of $5.83 billion in the year-ago period. Alcoa is trading at around $8.16 a share. So far this year, the stock has lost 5.9 percent.

Yum! Brands Inc. (NYSE: YUM) is a quick service restaurant company. The company has a market capitalization of $31.82 billion. It is expected to report FY2013 third-quarter EPS of 92 cents on revenue of $3.54 billion, compared with a profit of $1 per share on revenue of $3.57 billion in the year-ago period. Yum! Brands Inc. is trading at around $71.29 a share. So far this year, the stock has gained 7.4 percent.

Wednesday Before Markets Open, or BMO:

Family Dollar Stores Inc. (NYSE: FDO) is a regional chain of variety stores in the U.S. The company has a market capitalization of $8.31 billion. It is expected to report FY2013 fourth-quarter EPS of 84 cents on revenue of $2.56 billion, compared with a profit of 69 cents per share on revenue of $2.36 billion in the year-ago period. Family Dollar Stores Inc. is trading at around $72.30 a share. So far this year, the stock has gained 14.0 percent.

Costco Wholesale Corporation (Nasdaq: COST) engages in the operation of membership warehouses. The company has a market capitalization of $50.20 billion. It is expected to report FY2013 fourth-quarter EPS of $1.47 on revenue of $32.92 billion, compared with a profit of $1.39 per share on revenue of $32.22 billion in the year-ago period. Costco Wholesale Corporation is trading at around $115.02 a share. So far this year, the stock has gained 16.4 percent.

Thursday AMC:

Micron Technology Inc. (Nasdaq: MU) engages in manufacturing and marketing semiconductor devices worldwide. The company has a market capitalization of $18.09 billion. It is expected to report FY2013 fourth-quarter EPS of 24 cents on revenue of $2.70 billion, compared with a loss of 24 cents per share on revenue of $1.96 billion in the year-ago period. Micron Technology Inc. is trading at around $17.51 a share. So far this year, the stock has gained 175.7 percent.

Safeway Inc. (NYSE: SW) is a food and drug retailer in North America. The company has a market capitalization of $7.68 billion. It is expected to report FY2013 third-quarter EPS of 18 cents on revenue of $8.53 billion, compared with a profit of 66 cents per share on revenue of $8.53 billion in the year-ago period. Safeway Inc. is trading at around $31.88 a share. So far this year, the stock has gained 75.8 percent.

Friday BMO:

Wells Fargo & Co (NYSE: WFC) is a bank holding company. The company has a market capitalization of $220.60 billion. It is expected to report FY2013 third-quarter EPS of 97 cents on revenue of $21.01 billion, compared with a profit of 88 cents per share on revenue of $21.21 billion in the year-ago period. Wells Fargo & Co is trading at around $41.44 a share. So far this year, the stock has gained 21.2 percent.

JPMorgan Chase & Co (NYSE: JPM) is a financial holding company. The company has a market capitalization of $195.11 billion. It is expected to report FY2013 third-quarter EPS of $1.27 on revenue of $24.22 billion, compared with a profit of $1.40 per share on revenue of $25.86 billion in the year-ago period. JPMorgan Chase & Co is trading at around $51.83 a share. So far this year, the stock has gained 17.9 percent.

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