Hasbro, Tyson Foods, General Motors, Michael Kors and Disney are part of Zacks Earnings Preview

For Immediate Release

Chicago, IL - February 06, 2017 - releases the list of companies likely to issue earnings surprises. This week's list includes Hasbro (NASDAQ: HAS - Free Report ), Tyson Foods (NYSE: TSN - Free Report ), General Motors (NYSE: GM - Free Report ), Michael Kors (NYSE: KORS - Free Report ) and Disney (NYSE: DIS - Free Report )

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All-Time Record Earnings in Q4

The Q4 earnings season has turned out to be fairly good. Not only is growth on track to be the highest in two years, but total earnings for the quarter are also on track to be a new quarterly record.

Please recall that earnings growth turned positive only in 2016 Q3, having declined in each of the preceding 5 quarters.

Importantly, the positive Q4 growth isn't a result of easy comparisons, but actually a function of strong gains in actual earnings. In fact, the overall tally of Q4 earnings for the S&P 500 index is on track to reach an all-time record for the index, surpassing the previous record achieved in 2014 Q4. This record isn't expected to last very long, with growth expected to ramp up notably in the coming quarters.

One other positive for this earnings season is the relatively modest negative revisions to current-quarter (2017 Q1) estimates; they have come down, but not by as much as has historically been the case.

Q4 Scorecard ( as of February 3, 2017 )

We now have Q4 results from 275 S&P 500 members, or 55% of the index's total membership. With 84 index members on deck to report results next week, we will have seen Q4 results from 71.8% of the index's total membership by the end of next week.

Total earnings for these 275 index members are up +6.9% on +4.2% higher revenues, with 68% beating EPS estimates and 54.5% coming ahead of top-line expectations.

The Q4 growth pace is notably tracking above what we had seen from the same group of 275 index members in other recent periods. But positive surprises (right-hand chart above) are tracking on the low side relative to historical periods, particularly on the earnings front. The 68% proportion of Q4 companies beating EPS estimates compares to 76.7% in the preceding quarter, 74.5% as the 4-quarter average and 72.7% as the 12-quarter average. Positive revenue surprises are tracking below what we had seen from the same group of companies in Q3, but are roughly in-line with historical periods.

Standout Sectors

Sectors with strong growth and better than expected results (earnings & revenues) include the Finance, Construction, Technology, and Basic Materials. Positive surprises for all of these sectors are tracking above the index level.

Finance : With results from 74.1% of the sector's market cap in the S&P 500 index already out, total earnings for the sector are up +12.1% from the same period last year on +4.7% higher revenues, with +70.8% beating EPS estimates and +55.4% beating top-line estimates.

This is better growth performance than we have seen from the sector in other recent periods. Please note that positive surprises are as hard to come by in the Finance sector as they are elsewhere.

Strong Finance sector growth is a big driver of the aggregate growth performance for the S&P 500 index as a whole. Excluding the Finance sector, the Q4 growth pace still compares favorably with other recent periods, but a lot less so.

Technology : For the Technology sector, we now have Q4 results from 84% of the sector's total market cap. Total earnings for these companies are up +7.4% from the same period last year on +5.4% higher revenues, with 71.1% beating EPS estimates and 78.9% beating revenue estimates.

This is better earnings growth than we have seen from this same group of Tech companies in Q3 or the preceding four quarters, but is about in-line with the 12-quarter average. Revenue growth, on the other hand, is tracking above historical periods. The revenue outperformance is visible in terms of positive surprises as well, with the proportion of Tech sector positive surprises notably tracking above Q3, the 4-quarter and 12-quarter averages. Earnings surprises (green bars in the right-hand chart) are tracking below historical periods, as is the case with other sectors as well.

Key Reports for the Week of February 6 th

We have almost 500 companies reporting results this week, including 84 S&P 500 members. At the end of this week, we will have seen Q4 results from 359 S&P 500 members or 71.8% of the index's total membership.

Monday - 2/6/2017 : We have 56 companies reporting results today, including 10 S&P 500 members, with Hasbro (NASDAQ: HAS - Free Report ) and Tyson Foods (NYSE: TSN - Free Report ) as the notable reports today, both in the morning.

Tuesday - 2/07/2017 : On a busy reporting docket, we have more than 220 companies coming out with quarterly results, including 27 S&P 500 members. General Motors (NYSE: GM - Free Report ) and Michael Kors (NYSE: KORS - Free Report ) are the notable reports in the morning, while Disney (NYSE: DIS - Free Report ) will report after the market's close.

GM shares are up +26.6% over the past 12 months vs. +18.1% gain for the S&P 500 index and +19.5% gain for the Zacks Auto sector (Ford is up only +8.7%). The company is expected to earn $1.13 in earnings on $42.2 billion in revenues vs. $1.39 in earnings on $39.6 billion in revenues in the year-earlier period.

Disney is expected to report $1.47 in earnings on $15.3 billion in revenues, which compare to $1.63 on $15.24 billion in revenues in the year-earlier period. Estimates have come down a bit, with the current $1.47 EPS estimate down $1.49 a week ago and $1.56 three months back.

Disney shares struggled last year on concerns about the long-term growth outlook for the ESPN franchise in the current chord cutting and streaming media environment, but that has turned around over the last few months. It was up +15.6% over the past 12months vs. +24.7% for the Zacks Media industry in that same time period. Over the last three months, however, Disney shares have outperformed the Zacks Media Industry, up +19.3% vs. +16.6%. Given the positive stock price momentum into this earnings release, the market seems to be looking for a perfect release from the company; anything less than perfect will likely see the stock losing ground in a major way.

Note : Sheraz Mian regularly provides earnings analysis on and appears frequently in the print and electronic media. In addition to this Earnings Preview article, he publishes theZacks Earnings Trendsreport every week.

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Hasbro, Inc. (HAS): Free Stock Analysis Report

Tyson Foods, Inc. (TSN): Free Stock Analysis Report

General Motors Company (GM): Free Stock Analysis Report

Michael Kors Holdings Limited (KORS): Free Stock Analysis Report

Walt Disney Company (The) (DIS): Free Stock Analysis Report

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