Earnings Preview – Week of May 29th
The focus this holiday-shortened week will be on the labor market, with the May non-farm payroll report coming out on Friday. Many will be hoping that the jobs report will help wash away the disappointing readings from the last two months. Relative to where expectations stood ahead of the April and March reports, it may not be that difficult to meet or exceed expectations this time around. There are a number of other major economic reports on the docket as well, with Thursday and Friday particularly busy.
The first quarter 2012 earnings season is effectively over, though we still have a handful of companies yet to report results. As of Friday (05/25), a total of 492 companies in the S&P 500 have already reported. We will get results from 55 companies this week, including 3 from the S&P 500.
Total earnings increased a solid 7.8% in the first quarter, compared to the preceding quarter’s 6.4% growth pace. Approximately 67% of companies came ahead of expectations, with a median earnings surprise of a very good 3.2%. Most of the growth came from top-line gains, with total revenues increasing 5% from the year-earlier level. Relative to earnings beats, far fewer companies were able to beat revenue expectations, with only about 40% of the companies coming out with positive revenue surprises.
Monday - 5/28
- Memorial Day holiday
Tuesday - 5/29
- Given the market’s well-justified European fixation, the Conference Board’s May Consumer Confidence report and the Case-Schiller’s April home price index may not get a lot of attention. But the expectation is for Consumer Confidence is to have modestly improved from April’s 69.2 level.
Wednesday - 5/30
- The April Pending Home sales report from the National Association of Realtors is the only release today. Pending homes are those where the contract has been signed, but the sale hasn’t closed yet. Last week’s new and existing home sales numbers were broadly on the better-than-expected side, indicating the improved outlook for the sector.
Thursday - 5/31
- A very busy morning for economic releases, starting with the May jobs report from Automatic Data Processing (ADP), the payroll processor. We will get the weekly Jobless Claims data, the second look at the first quarter GDP, and the Chicago PMI.
- The ADP report will give us a flavor of what to expect in the Friday’s government jobs report. Last month, the ADP report disappointed by coming up with a 119K jobs number, which was followed up by a disappointing government jobs report of 115K jobs.
- The GDP growth rate is expected to come down from the first round’s 2.2% to 1.9%, though the all-important personal consumers expenditures (or consumer spending) component will likely not see much revision.
Friday - 6/01
- We have four major reports coming out today, though the focus will be on the May non-farm payroll report. Other major reports include the May manufacturing ISM survey, the April Construction Spending report, and the April Personal Income & Outlays report.
- Despite the crowded economic calendar, the Jobs report will be the key driver of the day’s trading action. It appears that the disappointing reports in April and March have helped temper expectations a bit, as hardly anyone is looking for number of above 200K. The expectation is for ‘headline’ gains of about 165K, compared to the 115K gained in April. The unemployment rate is expected to remain unchanged at 8.1%.
- The ISM report is expected to show a modest decline from April’s 54.8 level, while construction spending growth is expected to have increased in April from March’s growth pace.
|Company||Ticker||1Q-12E||1Q-11A||Last EPS Surprise %||Report Day||Time|
|SOC QUIMICA MIN||SQM||0.52||0.42||1.69||Tuesday||AMC|
|JOS A BANK CLTH||JOSB||0.62||0.64||-0.63||Wednesday||BTO|
|BOOZ ALLEN HMLT||BAH||0.41||0.33||17.14||Wednesday||BTO|
|LIONS GATE ETMT||LGF||0.19||0.26||-111.11||Wednesday||AMC|
|NORTH AMER EGY||NOA||-0.12||0.29||-127.78||Wednesday||AMC|
|YINGLI GREEN EN||YGE||-0.19||0.36||79.45||Wednesday||BTO|
|NCI BLDG SYSTEM||NCS||-0.39||-0.48||53.62||Wednesday||AMC|
|JOY GLOBAL INC||JOY||1.95||1.52||-6.67||Thursday||BTO|
|CDN IMPL BK||CM||1.88||1.77||2.06||Thursday||BTO|
|JDA SOFTWARE GP||JDAS||0.48||0.32||8.93||Thursday||AMC|
|ISLE OF CAPRI||ISLE||0.3||0.22||70||Thursday||BTO|
|MOVADO GRP INC||MOV||0.25||0.02||51.16||Thursday||BTO|
|AMER ORIENT BIO||AOB||0.03||0.02||60||Thursday||AMC|
|STAR BULK CARRS||SBLK||-0.05||0.01||20||Thursday||BTO|