Zacks Earnings Preview: ConocoPhillips, ExxonMobil, Freeport-McMoRan, JetBlue and Lexmark International.CHICAGO -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes ConocoPhillips (NYSE NYSE See: New York Stock Exchange : COP), ExxonMobil (NYSE: XOM XOM Exxon Mobil Corporation (stock symbol) XOM X/Open Object Management XOM OSI-Abstract-Data Manipulation API XOM Xml Object Model XOM X/Open Osi Abstract Data Manipulation ), Freeport-McMoRan (NYSE: FCX FCX French Connexion (gaming site) FCX Freeport-McMoran Copper & Gold Inc (stock symbol) FCX Fuel Cell Experiment (Honda) FCX Fire Coordination Exercise FCX Fire Control Exercise ), JetBlue (Nasdaq: JBLU JBLU JetBlue Airways Corporation (stock symbol) ) and Lexmark International (NYSE: LXK). To see more earnings analysis, visit http://at.zacks.com/?id=3207. Earnings Preview is written by Charles Rotblut, CFA (Computer Fraud and Abuse Act of 1986) Signed into law in 1986, the CFA was a significant step forward in criminalizing unauthorized access to computer systems and networks. The Act applies to "federal interest computers" that include any system used by the U.S. , Senior Market Analyst for Zacks.com. It is going to be an exciting week. The Tour de France Tour de France World's most prestigious and difficult bicycle race. Staged for three weeks each July—usually in some 20 daylong stages—the Tour typically comprises 20 professional teams of nine riders each and covers some 3,600 km (2,235 miles) of flat and could have its general classification shaken up with a brutal mountain stage on Monday. Barry Bonds Barry Lamar Bonds (born July 24 1964 in Riverside, California) is a left fielder for the San Francisco Giants of Major League Baseball. He is the son of former major league All-Star Bobby Bonds, the godson of Hall of Famer Willie Mays, and a distant cousin of Hall of Famer Reggie could break Hank Aaron's home run record; he is two shy after hitting two homers at Wrigley on Thursday afternoon. Fans across the world will know how the final confrontation between Harry Potter and Voldemart (sorry, I forgot that I wasn't supposed to say his name) turns out. (And no, I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. the answer and I don't want anyone spoiling it for me either...) The economic calendar will have its first report of note on Wednesday with June existing home sales Existing Home Sales An economic indicator of both the number and prices of existing single family houses, condos and co-op sales over a one-month period. Released monthly by the U.S. data. Thursday features June new home sales New Home Sales An economic indicator that measures sales of newly built homes. Released by the U.S. Department of Commerce's Census Bureau, it includes both quantity and price statistics. and June durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. orders. The week ends with the final University of Michigan (body, education) University of Michigan - A large cosmopolitan university in the Midwest USA. Over 50000 students are enrolled at the University of Michigan's three campuses. The students come from 50 states and over 100 foreign countries. consumer confidence index Consumer Confidence Index A measure of consumer views regarding the current economic situation and consumer expectations for the future. Information for the index is compiled and released on the last Tuesday of each month by the Conference Board, an and the advance estimate of second-quarter GDP GDP (guanosine diphosphate): see guanine. . Second-quarter earnings will be front and center. We have confirmed scheduled reports for 847 companies, 175 of which are in the S&P 500. Six Dow components will step up to the plate and given the possibility of positive surprises, a further ascent by the average into record territory seems likely. Speaking of surprises, results for the second-quarter are looking alright so far. Not great, but certainly nothing to complain about either. Approximately one-fourth of S&P 500 companies have reported and positive surprises are outnumbering negative surprises by a margin of 2.8:1. Median company growth is running at 9.4%. For the broader S&P 1500 (S&P 500, S&P MidCap 400 and S&P SmallCap 600), growth is a little slower at 8.6%. Positive surprises are outnumbering negative surprises by a 2.6:1 ratio. Relative to the same point during first-quarter earnings, median company growth is better this earnings season, but the proportion of negative surprises is also higher. Nonetheless, it is still relatively early, so we caution about reading too much into these numbers. Companies That Could Issue Positive Earnings Surprises during the Week of July 23 - 27 One of the things I've recently focused on was an improvement in earnings projections for multiple oil-related companies. Higher oil prices are causing brokerage analysts to change their earnings assumptions. As a result, both ConocoPhillips (NYSE: COP) and ExxonMobil (NYSE: XOM) could both top expectations when they report second-quarter results. COP said in early July that "worldwide refining margins for the second quarter are expected to be significantly higher than the first quarter." Offsetting this may be a decline in production levels because of maintenance, the company's exit from Dubai and a few other factors. Nonetheless, brokerage analysts believe profits will be above first-quarter and year ago levels. The company is projected to report profits of $2.59 per share, 21 cents more than the consensus estimate of a month ago. The Most Recent Consensus is even more bullish at $2.65 per share. COP's first-quarter results were below expectations, but the company did top estimates during the previous three quarters. ConocoPhillips is scheduled to report on Wednesday, Jul 25, before the start of trading. XOM's market cap was $521 billion on Friday morning, a sign that investors are reacting positively to raised earnings expectations. More than half of the covering brokerage analysts have raised their second-quarter forecasts on the oil conglomerate during the past 30 days, sending the consensus estimate 17 cents higher to $1.92 per share. The Most Recent Consensus Estimate is more bullish at $1.95 per share. XOM has exceeded expectations during the each of the past four quarters by an average margin of 15 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . ExxonMobil is scheduled to report on Thursday, Jul 26, before the start of trading. Volatile copper prices have not deterred brokerage analysts from being optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about Freeport-McMoRan's (NYSE: FCX) second-quarter results. One brokerage analyst raised his forecast over the past week and five others have adjusted their projections during the past 30 days. The net result of these revisions has been a 17-cent increase in the consensus estimate to $2.64 per share. The Most Recent Consensus calls for profits of $2.69 per share. FCX has topped expectations for nine consecutive quarters. Freeport-McMoRan is scheduled to report on Wednesday, Jul 25, before the start of trading. Despite some bad press, JetBlue (Nasdaq: JBLU) realized a 1.7-point improvement in its load factor during June. (Load factor is the ratio of passenger miles to available seat miles Available seat miles (ASM) is a measure of an airline flight's passenger carrying capacity. It is equal to the number of seats available multiplied by the number of miles flown. This measures an airlines capacity for transporting passengers. . The more crowded a plane is, the higher load factor is.) This improvement led six of the 11 covering brokerage analysts to raise their forecasts for second-quarter profits. The consensus estimate calls for the discount airline to have earned 11 cents per share, a penny higher than the average forecast of a month ago. The Most Recent Consensus is predicting profits of 12 cents per share. JBLU topped first-quarter estimates by seven cents per share, but missed fourth-quarter expectations by a penny per share. JetBlue is scheduled to report on Tuesday, July 24, before the start of trading. Companies That Could Issue Negative Earnings Surprises during the Week of Jul 23 - 27 Lexmark International (NYSE: LXK) recently cut its guidance. Citing a decline in inkjet revenues and "aggressive pricing and promotion" on hardware, the company expects that adjusted earnings to be in a range of 62 to 67 cents per share, including a tax benefit of five cents per share. The company had previously predicted that second-quarter profits would be in the range of 82 to 92 cents per share. Nearly all of the covering brokerage analysts slashed their forecasts in response, sending the consensus estimate down to 64 cents per share. LXK's first-quarter results were seven cents below expectations. Lexmark is scheduled to report on Tuesday, Jul 24, before the start of trading. Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206. About the Zacks Rank Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank stocks have generated an average annual return of +31.9%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 132% annually (+5.1% vs. +11.9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively. Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. 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These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . These returns are not the result of a backtest; these are actual returns since 1988. The stocks in the Zacks Rank portfolios were available to Zacks clients before the beginning of each month (monthly rebalancing Rebalancing The process of realigning the weightings of one's portfolio of assets. Notes: For example, if your portfolio's proportion of stock has grown too large for your intended assets weightings and risk tolerance, you might rebalance by selling some stock and putting ). Performance results from 1988 through September 2006 are based on a subset of all Zacks Rank stocks that excludes stocks covered by only one analyst and ADR's. The S&P 500 Index is a well-known, unmanaged index of the prices of 500 large-company common stocks, mainly blue-chip stocks, selected by Standard & Poor's. The S&P 500 Index assumes reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of dividends but does not reflect advisory fees. An investor cannot invest directly in an index. Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security. |
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