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We have to wait another few weeks before the Q2 earnings season really takes the spotlight, but the reporting cycle has gotten underway, with results from 11 S&P 500 members already out. All of these early reporters, which includes major operators like FedEx (FDX - Free Report) , Oracle (ORCL - Free Report) and Adobe (ADBE - Free Report) and others, have fiscal quarters ending in May, but get counted as part of the June quarter tally. We have another 12 index members with fiscal quarters ending in May on deck to report results this week.
All in all, we will have seen Q2 results from almost two dozen S&P 500 members by the time JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) (unofficially) kick-off this earnings season on July 14th.
The notable earnings reports coming out this week include:
Darden Restaurants (DRI - Free Report) reports on Tuesday (6/27) before the market’s open, with the company expected to earn $1.15 per share in earnings on $1.9 billion in revenues, which compares to $1.1 per share on $1.79 billion in revenues in the year-earlier period. The stock was up big following the last earnings report on March 27th and has been a strong performer since the August quarter release in October 2016. The stock is up +22.4% in the year-to-date period vs. +11.7% gain for the Zacks Restaurant industry and +9.2% gain for the S&P 500 index.
General Mills (GIS - Free Report) reports on Wednesday (6/28) morning, with the company expected to earn 71 cents per share on $3.75 billion in revenues, which compares to 66 cents in earnings on $3.93 billion in revenues in the year-earlier period. Estimates have come down a bit in recent days and the stock has lost ground following each of the last two earnings reports. The stock is currently down -9.5% in the year-to-date period vs. -3.7% decline for the peer group.
Nike (NKE - Free Report) reports after the market’s close on Thursday (6/29), with the company expected to earn 49 cents in EPS on $8.6 billion in revenues, which compares to unchanged EPS on $8.24 billion in revenues in the year-earlier period. This will be the fiscal fourth quarter for the company, with estimates for fiscal year 2018 steadily coming down over the last three months. The apparel and footwear space has been struggling lately as a result of headwinds in the broader retail space. The stock is up +4% in the year-to-date period vs. +3.1% gain for the Zacks Apparel & Footwear industry.
Micron Technology (MU - Free Report) will also report after the market’s close on Thursday (6/29), with the company expected to earn $1.37 per share in earnings on +5.4 billion in revenues. The year-over-year comparisons are very easy – the company had lost 8 cents in earnings on $2.9 billion in revenues in the year-earlier period. As is the case with most other semiconductors stocks, Micron shares have been standout performers lately, up +45% in the year-to-date period vs. +45.4% gain for the Zacks Semiconductor industry.
The chart below shows the weekly calendar of earnings releases for the entire Q2 earnings cycle. As you can see, we are about three weeks away from the reporting cycle really ramping up.
Expectations for Q2
Total Q2 earnings are expected to be up +5.8% from the same period last year on +4.6% higher revenues. This would follow +13.4% earnings growth in 2017 Q1 on +7.0%, the highest growth pace in all most two years.
Estimates for Q2 came down as the quarter unfolded, with the current +5.8% growth down from +7.9% at the end of March. The chart below shows how Q2 earnings growth expectations have evolved over the last three months.
Please note that while Q2 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compared favorably to other periods. In other words, Q2 estimates have come down, but they haven’t come down by as much.
The table below shows the summary picture for Q2, contrasted with what was actually achieved in Q1.
The chart below shoes Q2 earnings growth expectations contrasted with what is expected in the following three quarters and actual results in the preceding 5 quarters. As you can see in the chart below, this growth pace is expected to continue through the rest of the year.
Scorecard for Early Q2 Results
As mentioned earlier, we have May quarter results from 11 S&P 500 members already. It is hard to draw any firm conclusions from the results thus far, but total earnings for these 11 index members are up +11.6% from the same period last year on +9.5% higher revenues, with 81.8% beating EPS estimates and an equivalent proportion beating revenue estimates.
The table below provides a summary view of the results that have come out already.
And here is our traditional scorecard table.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
Company
Ticker
Current Qtr
Year-Ago Qtr
Last EPS Surprise %
Report Day
Time
SCHNITZER STEEL
SCHN
0.56
0.46
0.00%
Monday
BTO
NOVAGOLD RSRCS
NG
-0.03
-0.03
N/A
Monday
AMC
DARDEN RESTRNT
DRI
1.15
1.1
3.94%
Tuesday
BTO
IHS MARKIT LTD
INFO
0.43
N/A
-8.11%
Tuesday
BTO
FACTSET RESH
FDS
1.84
1.64
0.56%
Tuesday
BTO
KB HOME
KBH
0.26
0.17
7.14%
Tuesday
AMC
AEROVIRONMENT
AVAV
0.99
0.23
73.53%
Tuesday
AMC
CALAMP CORP
CAMP
0.22
0.27
-4.35%
Tuesday
AMC
MONSANTO CO-NEW
MON
1.74
2.17
15.58%
Wednesday
BTO
PAYCHEX INC
PAYX
0.53
0.49
1.85%
Wednesday
BTO
GENL MILLS
GIS
0.71
0.66
1.41%
Wednesday
BTO
UNIFIRST CORP
UNF
1.34
1.49
8.91%
Wednesday
BTO
OMNOVA SOLUTION
OMN
0.16
0.18
0.00%
Wednesday
BTO
SHAW COMMS-CL B
SJR
0.25
0.37
0.00%
Wednesday
BTO
WORTHINGTON IND
WOR
0.83
0.87
-17.91%
Wednesday
AMC
PIER 1 IMPORTS
PIR
-0.05
-0.07
3.03%
Wednesday
AMC
PROGRESS SOFTWA
PRGS
0.32
0.25
55.00%
Wednesday
AMC
SCHULMAN(A) INC
SHLM
0.65
0.79
3.33%
Wednesday
AMC
INVESTORS RL ES
IRET
0.1
0.14
-7.69%
Wednesday
AMC
CONSTELLATN BRD
STZ
1.98
1.54
8.03%
Thursday
BTO
MCCORMICK & CO
MKC
0.77
0.75
2.70%
Thursday
BTO
WALGREENS BAI
WBA
1.31
1.18
0.00%
Thursday
BTO
ACUITY BRANDS
AYI
1.92
1.96
-2.94%
Thursday
BTO
CONAGRA BRANDS
CAG
0.38
0.52
6.67%
Thursday
BTO
MICRON TECH
MU
1.37
-0.08
0.00%
Thursday
AMC
NIKE INC-B
NKE
0.49
0.49
30.77%
Thursday
AMC
GREENBRIER COS
GBX
0.83
1.12
29.76%
Thursday
BTO
GMS INC
GMS
0.46
0.53
0.00%
Thursday
BTO
LINDSAY CORP
LNN
0.92
0.9
23.68%
Thursday
BTO
RITE AID CORP
RAD
-0.02
0.01
100.00%
Thursday
BTO
US PHYSICAL THR
USPH
0.47
0.43
-6.12%
Thursday
BTO
8POINT3 ENERGY
CAFD
0.18
0.5
116.67%
Thursday
AMC
FRANKLIN COVEY
FC
-0.1
-0.07
22.73%
Thursday
AMC
EXFO INC
EXFO
0.03
0.02
0.00%
Thursday
AMC
AM OUTDOOR BRND
AOBC
0.38
0.66
22.22%
Thursday
AMC
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Q2 Earnings Season Preview
We have to wait another few weeks before the Q2 earnings season really takes the spotlight, but the reporting cycle has gotten underway, with results from 11 S&P 500 members already out. All of these early reporters, which includes major operators like FedEx (FDX - Free Report) , Oracle (ORCL - Free Report) and Adobe (ADBE - Free Report) and others, have fiscal quarters ending in May, but get counted as part of the June quarter tally. We have another 12 index members with fiscal quarters ending in May on deck to report results this week.
All in all, we will have seen Q2 results from almost two dozen S&P 500 members by the time JPMorgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) and Citigroup (C - Free Report) (unofficially) kick-off this earnings season on July 14th.
The notable earnings reports coming out this week include:
Darden Restaurants (DRI - Free Report) reports on Tuesday (6/27) before the market’s open, with the company expected to earn $1.15 per share in earnings on $1.9 billion in revenues, which compares to $1.1 per share on $1.79 billion in revenues in the year-earlier period. The stock was up big following the last earnings report on March 27th and has been a strong performer since the August quarter release in October 2016. The stock is up +22.4% in the year-to-date period vs. +11.7% gain for the Zacks Restaurant industry and +9.2% gain for the S&P 500 index.
General Mills (GIS - Free Report) reports on Wednesday (6/28) morning, with the company expected to earn 71 cents per share on $3.75 billion in revenues, which compares to 66 cents in earnings on $3.93 billion in revenues in the year-earlier period. Estimates have come down a bit in recent days and the stock has lost ground following each of the last two earnings reports. The stock is currently down -9.5% in the year-to-date period vs. -3.7% decline for the peer group.
Nike (NKE - Free Report) reports after the market’s close on Thursday (6/29), with the company expected to earn 49 cents in EPS on $8.6 billion in revenues, which compares to unchanged EPS on $8.24 billion in revenues in the year-earlier period. This will be the fiscal fourth quarter for the company, with estimates for fiscal year 2018 steadily coming down over the last three months. The apparel and footwear space has been struggling lately as a result of headwinds in the broader retail space. The stock is up +4% in the year-to-date period vs. +3.1% gain for the Zacks Apparel & Footwear industry.
Micron Technology (MU - Free Report) will also report after the market’s close on Thursday (6/29), with the company expected to earn $1.37 per share in earnings on +5.4 billion in revenues. The year-over-year comparisons are very easy – the company had lost 8 cents in earnings on $2.9 billion in revenues in the year-earlier period. As is the case with most other semiconductors stocks, Micron shares have been standout performers lately, up +45% in the year-to-date period vs. +45.4% gain for the Zacks Semiconductor industry.
The chart below shows the weekly calendar of earnings releases for the entire Q2 earnings cycle. As you can see, we are about three weeks away from the reporting cycle really ramping up.
Expectations for Q2
Total Q2 earnings are expected to be up +5.8% from the same period last year on +4.6% higher revenues. This would follow +13.4% earnings growth in 2017 Q1 on +7.0%, the highest growth pace in all most two years.
Estimates for Q2 came down as the quarter unfolded, with the current +5.8% growth down from +7.9% at the end of March. The chart below shows how Q2 earnings growth expectations have evolved over the last three months.
Please note that while Q2 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compared favorably to other periods. In other words, Q2 estimates have come down, but they haven’t come down by as much.
The table below shows the summary picture for Q2, contrasted with what was actually achieved in Q1.
The chart below shoes Q2 earnings growth expectations contrasted with what is expected in the following three quarters and actual results in the preceding 5 quarters. As you can see in the chart below, this growth pace is expected to continue through the rest of the year.
Scorecard for Early Q2 Results
As mentioned earlier, we have May quarter results from 11 S&P 500 members already. It is hard to draw any firm conclusions from the results thus far, but total earnings for these 11 index members are up +11.6% from the same period last year on +9.5% higher revenues, with 81.8% beating EPS estimates and an equivalent proportion beating revenue estimates.
The table below provides a summary view of the results that have come out already.
And here is our traditional scorecard table.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>