The week in preview: Earnings season winds down

Posted Mar 1st 2009 12:30PM by Trey Thoelcke
Filed under: Earnings Reports, Forecasts, Economic Data

While the release of economic data doesn't stop next week (see economic schedule highlights below), the earnings season does wind down dramatically. Most of the S&P 500 companies already have reported on the past quarter, which means dismal earnings news is largely behind us, at least for a while. About the only companies of note expected by analysts surveyed by Thomson Reuters to report falling earnings this week are Costco Wholesale Corp. (NASDAQ: COST), Wendy's/Arby's Group Inc. (NYSE: WEN), Foot Locker Inc. (NYSE: FL), Bank of Montreal (NYSE: BMO), and Steinway Musical Instruments Inc. (NYSE: LVB).

While PetSmart Inc. (NASDAQ: PETM) and Big Lots Inc. (NYSE: BIG) quarterly profits are expected to be about the same as a year ago, Liz Claiborne Inc. (NYSE: LIZ), Kenneth Cole Productions Inc. (NYSE: KCP), Ciena Corp. (NASDAQ: CIEN), and Trina Solar Ltd. (NYSE: TSL) are expected to have swung to losses in the most recent quarter.

And then there are those companies expected to report quarterly earnings growth this week, including DISH Network Corp. (NASDAQ: DISH), America's Cart-Mart Inc. (NASDAQ: CRMT), AutoZone Inc. (NYSE: AZO), Jackson Hewett Tax Service Inc. (NYSE: JTX), BJ's Wholesale Club Inc. (NYSE: BJ), and Weight Watchers International Inc. (NYSE: WTW).

While some of the week's biggest anticipated earning gainers may not be household names, they may be worth a closer look.

New York-based Overseas Shipholding Group Inc. (NYSE: OSG) has a fleet of more than 100 crude oil tankers and product carrier vessels registered in the U.S. and other countries. For a fourth quarter that saw management changes, the bulk shipper is expected to report a profit of $1.67 per share, 59.9% higher than a year ago, and revenue of $364.2 million, up 31.6%. For the full year, their forecast is $13.23 per share (+62.3%) on $1.6 billion (+44.7%). OSG has topped earnings estimates in most recent quarters, by as much as 86 cents per share. Though the long-term EPS growth forecast is 12.0%, which is better than the industry average and the S&P 500, the consensus recommendation has shifted from buy to hold OSG recently. But the Motley Fool recently called OSG a stock ready to run. The share price has fallen 38.9% since the beginning of the year, and hit a 52-week low of $25.25 last week. OSG also recently announced a quarterly dividend of about $0.44 per share.

Texas-based Martin Midstream Partners (NASDAQ: MMLP), a producer and distributor of petroleum products, is expected to report fourth-quarter earnings of $0.90 per share, 45.6% higher than a year ago, and revenue of $386.3 million, up 47.0%. For the full year, the forecast is $2.46 per share (+31.7%) on $1.4 billion (+79.3%). Martin Midstream beat estimates in two of the past three quarters, by 19 cents per share in the third quarter. The long-term EPS growth forecast is only 4.0%, but the consensus recommendation remains to buy MMLP. Martin Midstream recently declared a dividend that was the same as in the previous quarter. The share price has risen 4.2% in the past three months to $18.61 but is still 45.6% lower than a year ago.

Greatbatch Inc. (NYSE: GB) makes batteries and other components for medical devices and other devices. For a fourth quarter that saw Greatbatch buy back some of its debt, the company is expected to post earnings of $0.37 per share (+43.3%) and revenue of $132.2 million (+56.6%). For the full year, analysts are looking for earnings of $1.28 per share on sales of $533.3 million, compared to $1.40 per share and $318.8 million in the previous year. Greatbatch topped earnings estimates in previous two quarters, by 38.3% in the third quarter. The long-term EPS growth forecast of 15.5% is better than the industry average and the S&P 500. Analysts, on average, recommend buying GB, and Minyanville recently included it on a list of stock picks for 2009. The share price has fallen 22.9% in the past three months to $19.48 but is still 11.2% lower than a year ago.

Engineering and technical services firm URS Corp. (NYSE: URS) announced several new contracts in its fourth quarter. The San Francisco-based company is expected to post a profit of $0.59 per share (+33.9%) and revenue of $2.4 billion (+40.2%). For the full year, analysts expect earnings of $2.70 per share on revenue of $9.9 billion, compared to $2.35 per share and $5.4 billion in the previous year. URS has topped earnings estimates in most recent quarters, by as much as 25.2%. The long-term EPS growth forecast is 13.0%, which is better than that of rival KBR Inc. (NYSE: KBR). The consensus recommendation remains to buy URS. The share price has fallen 18.6% in the past three months to $30.92 but is still 25.6% lower than a year ago.

For a fourth-quarter that saw Central European Distribution Corp. (NASDAQ: CEDC) announce an arrangement to refinance its short-term debt, the spirits distiller and distributor is expected report earnings of $1.03 per share on revenue of $476.7 million, compared to $0.73 per share on $393.4 million in the same period of last year. For the full year, analysts expect earnings of $2.83 per share on revenue of $1.7 billion, compared to $1.69 per share and $1.2 billion in the previous year. CEDC has topped estimates in the past three quarters, by 20.0% in the third quarter. The long-term EPS growth forecast is 19.0%, and the consensus recommendation remains buy CEDC. The share price fell to a 52-week low of $6.58 last week, and it is 88.9% lower than it was a year ago.

And finally there's California-based Fuel Systems Solutions Inc. (NASDAQ: FSYS), which manufactures equipment that allows automobiles to run on alternative fuels. The green company is expected to report fourth-quarter earnings of $0.42 per share on revenue of $91.4 million, compared to $0.31 per share on $79.7 million in the same period of last year. For the full year, analysts expect a profit of $2.09 per share on revenue of $389.8 million, compared to $0.58 per share and $265.3 million in the previous year. FSYS has easily beaten estimates in the past four quarters, reporting record numbers in the third quarter. The long-term EPS growth forecast is 25.0%, and the consensus recommendation remains buy FSYS. The share price has fallen 39.5% since the beginning of the year to $19.81.

As for other economic data, here's what's on the schedule for this week: