Zacks Earnings Trends Highlights: Apple, Dell, Cisco, Wal-Mart and Target - Press Releases

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For Immediate Release

 

Chicago, IL - May 10, 2012 - Zacks Director of Research Sheraz Mian explains how first quarter earnings season is an improvement on fourth quarter earnings.  

 

1 st Quarter Better Than 4 th Quarter

The first quarter 2012 earnings season has turned out to be way better relative to pre-season expectations. And with the bulk of the results now known, this reporting season has also proven to be better than the fourth quarter of 2011. Most of us suspected in the run up to the earnings season that the odds of disappointing results were lower, given the extremely low expectations. But hardly anyone of us could foretell how good the earnings season has turned out to be, particularly at this late stage of the earnings cycle.

Total earnings for the 88% of S&P 500 companies that have already reported are up 7.4% from the same period last year. Approximately 65% of the companies are coming ahead of expectations, with the median surprise at a very good 3.5%. At this stage in the previous quarter (4Q-11), total earnings for the same companies were up 6.6%. Approximately 62% of these companies beat expectations in the fourth quarter, with a median surprise of 2.3%.

Most of the earnings growth is coming from top-line gains, with margins essentially flat from the year-earlier level. Revenues for the companies that have already reported are up 4.7% year over year, though only 38.7% have come out with positive revenue surprises, with a median surprise of 0.9%.

As the Earnings Scorecard table below shows, the Tech and Finance sectors have been major growth drivers, though overall growth is fairly well dispersed with half of the sixteen Zacks sectors showing double-digit earnings growth.

Blowout results from Apple ( AAPL ) no doubt play a major role in the Tech sector's strong performance. Excluding Apple's results, the sector's earnings growth drops to only 3.4% from the very impressive 21.8%. Earnings growth for the 88% of companies that have already reported drop to 4.9% from 7.4%, once Apple's results are excluded.

Expectations Remain Low
 
Estimates have started going up a little in recent days, though they still remain quite low relative to what we have seen thus far this season.
 
Most of the remaining companies still to report results are in the retail sector, though we do have a number notable tech companies such as Dell ( DELL ) and Cisco ( CSCO ) coming out with results as well. Many important retail players such as Wal-Mart ( WMT ) and Target ( TGT ) still have to report results. In total, these 59 S&P 500 companies are expected to show an earnings drop of 1.9% from the year-earlier level. A major contributor to the negative growth expectation is Dell, which is expected to see earnings decline from the year-earlier level.

The first quarter is expected to be the low point in terms of earnings growth this year, with a meaningful ramp-up apparent in current growth expectations for the second quarter and the rest of the year.

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Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

 

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.

 

Contact: Sheraz Mian, Director of Research

Company: Zacks.com

Phone: 312-265-9211

Email: pr@zacks.com

Visit: www.zacks.com


 
APPLE INC (AAPL): Free Stock Analysis Report
 
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
 
DELL INC (DELL): Free Stock Analysis Report
 
TARGET CORP (TGT): Free Stock Analysis Report
 
WAL-MART STORES (WMT): Free Stock Analysis Report
 
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Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: AAPL , CSCO , DELL , TGT , WMT

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