We are getting into the thick of the Q4 earnings season with 170 of the S&P 500 members (as of Jan 27) having already reported their results.
Per the latest Earnings Preview , total earnings for these 170 index members were up 6.0% from the year-ago quarter on a 3.1% improvement in revenues. The beat ratio was 64.1% for earnings and 54.7% for revenues.
Though the fourth quarter is poised to witness the highest growth in the last eight quarters, positive surprises, predominantly on the earnings front, are trailing below other historical periods at this juncture.
Leisure Stocks in Focus
Turning our focus on the leisure companies from the Consumer Discretionary sector, we note that their performance has been mixed so far this earnings season.
Among the leisure stocks that have reported, both Royal Caribbean Cruises Ltd. RCL and Brunswick Corporation BC delivered mixed performance in the fourth quarter. On one hand, the companies surpassed earnings expectations, but they missed the revenue estimates. On the other hand, International Speedway Corporation ISCA lagged on both fronts.
Three leisure stocks from the sector are set to report their quarterly results on Feb 2. Will these companies manage to put up a decent performance? Let's take a look at what might be in store for them this quarter:
Callaway Golf CompanyELY recorded a positive earnings surprise of 45.45% in the last quarter. Moreover, in the trailing four-quarter average earnings surprise is a positive 17.75%.
Callaway Golf Company Price and EPS Surprise
Our proven model does not conclusively show that Callaway Golf Company is likely to beat earnings this time. This is because, according to our quantitative model, a company needs the right combination of two key ingredients - a positive Earnings ESP and a Zacks Rank #3 (Hold) or better - to increase its odds of an earnings surprise. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .
For the fourth quarter of 2016, the company has an Earnings ESP of 0.00%, which makes surprise prediction difficult even though the company has a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
The Zacks Consensus Estimate for the quarter's bottom line is pegged at a loss of 17 cents.
Diversified gaming and pari-mutuel wagering company, Penn National Gaming, Inc.PENN posted a positive earnings surprise of 88.89% in the last quarter. Moreover, in the trailing four-quarter average earnings surprise is a positive 44.69%.
Penn National Gaming, Inc. Price and EPS Surprise
We note that the company is unlikely to post a beat in fourth-quarter 2016 due to the combination of its Zacks Rank #4 (Sell) and Earnings ESP of -33.33%. The Zacks Consensus Estimate for the quarter's bottom line is pegged at a loss of 15 cents.
Notably, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Intrawest Resorts Holdings, Inc.SNOW registered a 5.66% negative earnings surprise in the previous quarter. However, in the trailing four-quarter average earnings surprise is a positive 2.20%.
Intrawest Resorts Holdings, Inc. Price and EPS Surprise
For second-quarter fiscal 2017, the company has an Earnings ESP of 0.00%, which makes surprise prediction difficult even though the company has a Zacks Rank #3.
The Zacks Consensus Estimate for the quarter's bottom line is pegged at a loss of 65 cents.
Stay tuned! Check back on our full write-up on earnings releases of these stocks.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.