The Q1 earnings season has reached its pinnacle as almost 374 S&P 500 members have already announced their results, and investors are still on the lookout for companies that can beat estimates. While many sectors have seen a bulk of their companies report earnings, most retailers are yet to come out with their results this season.
Per the latest Zacks Earnings Trend report, out of the 374 S&P 500 members that have come up with their quarterly numbers, approximately 71.4% have posted positive earnings surprises. This is because the estimates had fallen quite low ahead of the start of this season as 2016 commenced on a dismal note. This therefore reflects an improvement in the overall corporate earnings picture.
According to the report, earnings for the 374 S&P 500 companies that have reported are down 7.5% from the same period last year, while revenues have declined 1.9%. The report further projects that earnings for the total S&P 500 companies will decline 7.1% from the year-ago period, and total revenue will dip 1.1%. We observe that this will be the fourth straight quarter, if the index witnesses a decline in earnings.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, 8 are expected to witness an earnings decline in Q1, with Basic Materials, Industrial Products, Energy and Conglomerates being a big drag. However, the Retail/Wholesale sector is showing some resilience in spite of overseas turmoil, yet-to-recover Chinese economy, fluctuating commodity prices and Fed rate-related controversies that to an extent are affecting consumers' spending behavior.
Total earnings for the Retail/Wholesale sector are expected to remain flat, whereas revenues are projected to increase 4.9%.
Among Retail/Wholesale stocks lined up to report, let's take a sneak peek at two companies.
CST Brands, Inc.CST , an independent retailer of motor fuel and convenience merchandise items, is slated to report first-quarter 2016 results on May 6. Our proven model does not conclusively show that CST Brands is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. CST Brands has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 24 cents. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company's ESP of 0.00% makes surprise prediction difficult.
In the trailing four quarters, this San Antonio, TX-based company outperformed the Zacks Consensus Estimate by an average of 79.7%.
Cst Brands Inc. (CST) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
Addison, TX-based Fiesta Restaurant Group, Inc.FRGI , which is scheduled to release its first-quarter 2016 results on May 9, has an Earnings ESP of -2.44% and a Zacks Rank #4 (Sell). Meanwhile, the Zacks Consensus Estimate for first-quarter earnings is pegged at 41 cents. However, we note that in the trailing four quarters, this operator of fast-casual restaurants outperformed the Zacks Consensus Estimate by an average of 0.7%.
Fiesta Restaurant Group Inc. (FRGI) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompany
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
