Wednesday afternoon following the market close, Nike Inc. (NYSE: NKE) will be reporting its fiscal first quarter earnings, and analysts are looking to see the company show earnings for the quarter of 92 cents per share.The last time that the company reported was back on June 25, when it was able to beat out Wall Street estimates by two pennies, with a reported 98 cents per share for its fiscal fourth quarter, mostly a result of strong international demand, which was able to overcome weak consumer spending that hurt the company at home in the U.S. In fact, to find the last time that the company reported quarterly figures under Wall Street estimates, you would have to go all the way back to its fiscal fourth quarter 2006 when it missed by a penny, with a reported 70 cents per share.
On a year over year basis, should Nike come in with 92 cents per share, it would be a 16.9% drop from the $1.12 that it was able to earn during the first quarter of 2007.
This quarter we should probably expect to see more of the same sort of news from the company that we saw last quarter. Don't expect to see huge breakout numbers for its domestic business this time around either, but we could get a boost in international demand stemming from this summers Olympic games.
Nike spent a lot of money on marketing during the recent Beijing Olympic games, but with the period ending so close to the end of the games, it is doubtful that the total benefit of the marketing campaign will be reflected in the quarterly numbers. We will get to hear more about how the company views the success of the Olympic games during their conference call.
Going into Wednesday's report, John Shanley from Susquehanna Financial Group, is bullish on the company's situation. He stated that he believes that Nike's dominance in the U.S. athletic footwear market, its wide range of products, and recent growth trends in countries such as China and Russia should enable it to deal with the current economic slowdown much better than its peers in the industry.
Earlier today, the company announced a stock buyback plan, that will see the company buying back $5 billion worth of Nike stock over the next 4 years. This move should give the stock some long term stability in the currently rocky economic climate.
Shares of Nike have been moving to the downside today, with the stock dropping 1.4% on the day, to $62.70, down $1.00.
What are your predictions for Nike? Should we expect to see the company put up better than expected numbers, or do you think the company will come up short for the quarter? Let us hear what your thoughts are on this upcoming earnings release.
Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.
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