Positive earnings report for the week ending the 10th
So far this week, from the companies we are following most have reported better than expected EPS as well as revenue growth above expectations. The exceptions have been Sohu (SOHU), which missed on EPS by almost 50%, and Disney (DIS), which missing on the revenue expectations by less than 4%.
Most of the consumer related names have beaten their expectations on strong EPS and revenue growth numbers versus the same quarter last year. Yum! Brands (YUM) (beat by 2%), Buffalo Wild Wings (BWLD) (beat 5% the revenue line after growing over 30% year over years EPS and revenue line), Ralph Lauren (RL) (beat the EPS by 5% after growing them by over 140% vs. the previous year), cigarette maker Lorillard (LO) (beat EPS by 12% and raised its dividend by 19%).
The consumer/retail sector names that have reported so far are:
For next week we return to the technology names reporting Rackspace (RAX), Nvidia (NVDA), Baidu (BIDU), and Applied Materials (AMAT). We also have a report from Comcast (CMCSA) (expected revenue growth of 50%), which will come after this week’s better than expected report from Time Warner (TWX). For the most part the markets are expected a drop in EPS for the names mentioned below, but an increase in revenues versus the same period last year.
Expected earnings for next week:
So far this year, earnings and the US economic numbers have been the focus for us equity markets. Some of the money that has been safely hiding in US treasuries for most of last year started to come back into the equity asset class as the VIX index dropped below 20 for the 1st time in over 6 months. Money is still scared, and we and not out of the woods with the European crisis still looming on the sidelines. One of the other positive consequences of seeing US rates bottoming and start to move higher is the increase spread the large retail banks will start to earn on deposits; this will be a positive for bank core earnings.
*DISCLOSURES: No relevant positions
