Earnings Preview: Monsanto Company (MON), Micron Technology Inc (MU), CarMax Inc (KMX)

 @moranzhang
on March 28 2014 6:56 AM
  • NYSE Jan 2013 2
    NYSE. Reuters
  • Monsanto
    A maize seedling is seen in the corn greenhouse at the Monsanto Research facility in Chesterfield, Missouri in this October 9, 2009 file photo. Picture taken October 9, 2009. REUTERS/Peter Newcomb
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Despite the 30 percent jump for the S&P 500 (INDEXSP:.INX) in 2013, and the more than 170 percent increase in prices since the market's low in 2009, stocks have not gotten ahead of fundamentals, according to S&P Capital IQ, as earnings per share growth has kept pace with price advances over the past five and seven years.

“In the coming year, we believe the S&P 500 will rise in price by an amount similar to the consensus increase in operating EPS through the first quarter of 2015, but trimmed slightly by the projected rise in inflation, reflecting the approximately 3 percent growth in real gross domestic product through early 2015,” Sam Stovall, chief equity strategist at S&P Capital IQ, said in a note.

S&P Capital IQ raised its 12-month target for the S&P 500 index to 1,985, which represents a 7 percent price increase for the U.S. equity benchmark during the coming year.

Preliminary results show that S&P 500 stock buybacks increased 1.0 percent to $129.4 billion during the fourth quarter of 2013, up from the $128.2 billion spent on share repurchases during the third quarter.

For fiscal year 2013, S&P 500 issues increased their buyback expenditures by 19.2 percent to $475.6 billion from $398.9 billion in 2012. The high mark was reached in 2007, when companies spent $589.1 billion. The recession low point was $137.6 billion recorded in 2009.

“Although there are headlines of record-setting buybacks programs, the 19.2 percent increase in buyback expenditures for 2013 only matched the 19.2 percent average daily stock price increase,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, said in a note.

“The average stock price for the first quarter of 2014 is running 21.0 percent higher than the first quarter of 2013, meaning that a 21 percent increase in current expenditures is necessary to purchase the same number of shares as last year,” Silverblatt added.

S&P Dow Jones Indices’ data show that 276 issues reduced, and 185 increased, their diluted share count in the fourth quarter of last year versus 263 decreases and 188 increases in the third quarter. For 2013, 272 issues reduced their share count while 200 increased.

For the year, the top five spenders are:

1) Apple Inc. (NASDAQ:AAPL): $25.9 billion

2) Exxon Mobil Corporation (NYSE:XOM): $16.0 billion

3) International Business Machines Corp. (NYSE:IBM): $13.9 billion

4) AT&T Inc. (NYSE:T): $13.0 billion

5) Pfizer Inc. (NYSE:PFE): $13.0 billion

We ran a screen and produced a list of five notable companies set to report their earnings between March 31 and April 4. We have 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' trailing 12-month performances.

Tuesday After Markets Close, or AMC:

Apollo Education Group Inc. (NASDAQ:APOL) formerly Apollo Group, Inc. is a private education provider. The company has a market capitalization of $3.67 billion. It is expected to report FY 2014 second-quarter EPS of 17 cents on revenue of $689.04 million, compared with a profit of 12 cents a share on revenue of $834.37 million in the year-ago period. Apollo Education Group Inc. is trading at around $32.55 per share. In the past 12 months, the stock has gained 87.2 percent.

Wednesday Before Markets Open, or BMO:

Monsanto Company (NYSE:MON) is a provider of agricultural products for farmers. The company has a market capitalization of $58.26 billion. It is expected to report FY 2014 second-quarter EPS of $3.06 on revenue of $5.81 billion, compared with a profit of $2.74 a share on revenue of $5.47 billion in the year-ago period. Monsanto Company is trading at around $110.96 per share. In the past 12 months, the stock has gained 5.6 percent.

Wednesday AMC:

Texas Industries Inc. (NYSE:TXI) is a supplier of construction materials in the southwestern U.S. The company has a market capitalization of $2.50 billion. It is expected to report a loss of 57 cents a share in the third quarter of fiscal year 2014 on revenue of $187.46 million, compared with a loss of 21 cents a share on revenue of $141.36 million in the year-ago period. Texas Industries Inc. is trading at around $87.41 a share. In the past 12 months, the stock has gained 32.4 percent.

Thursday AMC:

Micron Technology Inc. (NASDAQ:MU) is a global manufacturer and marketer of semiconductor devices. The company has a market capitalization of $23.57 billion. It is expected to report FY 2014 second-quarter EPS of 61 cents a share on revenue of $3.98 billion, compared with a loss of 28 cents a share on revenue of $2.08 billion in the year-ago period. Micron Technology Inc. is trading at around $22.21 per share. In the past 12 months, the stock has gained 123.1 percent.

Friday BMO:

CarMax Inc. (NYSE:KMX) is a retailer of used cars. The company has a market capitalization of $10.15 billion. It is expected to report FY 2014 fourth-quarter EPS of 53 cents on revenue of $3.18 billion, compared with a profit of 46 cents a share on revenue of $2.83 billion in the year-ago period. CarMax Inc. is trading at around $45.43 per share. In the past 12 months, the stock has gained 10.6 percent.

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