After the Memorial Day holiday in the United States, the earnings spotlight turns to Canadian banks: Bank of Montreal (NYSE: BMO), Canadian Imperial Bank of Commerce (NYSE: CM), Royal Bank of Canada (NYSE: RY), and Toronto-Dominion Bank (NYSE: TD) are all scheduled to report their second-quarter results.
While banks north of the border of generally have held up better than their U.S. counterparts, analysts surveyed by Thomson Reuters expect the four listed above to report that earnings declined between 20% and 30% since the same period of last year. All four have P/E ratios around 10, and they are paying dividends. Shares of all four have surged 50% to 83% in the past three months, but are still 26% to 38% lower than a year ago.
As for their counterparts in the United States, look for FDIC Chairman Sheila Bair to discuss Q1 bank and thrift earnings Wednesday morning.
Other companies expected to report earnings declines this week include HJ Heinz Co. (NYSE: HNZ), Polo Ralph Lauren Corp. (NYSE: RL), Staples Inc. (NASDAQ: SPLS), and Tiffany & Co. (NYSE: TIF). Those expected to report losses for the most recent quarter include Borders Group Inc. (NYSE: BGP), Take-Two Interactive Software Inc. (NASDAQ: TTWO), TiVo Inc. (NASDAQ: TIVO), and Zale Corp. (NYSE: ZLC). Of course, there will be a few earnings gainers as well.
Analysts are looking for second-quarter earnings from poultry producer Sanderson Farms Inc. (NASDAQ: SAFM) to come in 45.5% higher than a year ago, or $0.55 per share. But revenue for the quarter is expected to be 5.8% lower to $408.7 million. The Mississippi-based company reported a loss in the past three quarters, with the first quarter loss four cents per share less than analysts expected. Its forward PE ratio estimate is 12.0, it significantly reduced its debt in the previous three quarters, and it continues to pay a quarterly dividend. The First Call consensus recommendation is to buy SAFM. Shares have surged 44.0% in the past three months to $41.18, but they are still 13.0% lower than a year ago. Analysts also expect snack-food producer Diamond Foods Inc. (NASDAQ: DMND) and baker Flowers Foods Inc. (NYSE: FLO) to report earnings growth this week.
Virginia-based Dollar Tree Inc. (NASDAQ: DLTR), a leading discount retail chain operator, is expected to report a profit of $0.60 per share for the first quarter, which is 20.0% higher than a year ago. Revenue is expected to be 13.4% higher to $1.2 billion, which is in line with previously released sales numbers. Dollar Tree earnings beat expectations in the past five quarters, by as much as six cents per share. The long-term EPS growth forecast is 13.6%, and the forward PE ratio estimate is 15.0, which is higher than the retail industry average. The company reported having more cash on hand than debt in the previous quarter. The consensus recommendation is to buy DLTR; a mutual fund recently bought shares but the Motley Fool is not impressed. The share price reached a 52-week high of $45.33 at the end of March but has since slipped below the 50-day moving average and closed Friday at $42.67. Analysts expect rival discount retailer Fred's Inc. (NASDAQ: FRED) to report earnings growth as well, while profits for Costco Wholesale Corp. (NASDAQ: COST) and Big Lots Inc. (NYSE: BIG) are expected to be smaller, year over year.
Analysts expect Esterline Technologies Corp. (NYSE: ESL), the aerospace and defense company, to report a second-quarter profit of $0.96 per share, which is 12.5% higher than a year ago. Revenue is expected to be down slightly to $371.1 million, though. The company's earnings topped estimates in the four of the past five quarters, but fell short of expectations in the first quarter. The long-term EPS growth forecast is 17.0%, which is better than that of rival Goodrich Corp. (NYSE: GR). Analysts on average recommend buying ESL, and have for more than 90 days. Shares have fallen 28.7% year to date, and at $27.02 they are 51.5% lower than a year ago.
AutoZone Inc. (NYSE: AZO), the nation's largest auto parts chain, is expected to post a profit for its fiscal third quarter that is 13.8% higher than a year ago to $2.89 per share. The forecast revenue of $1.6 billion is 6.1% higher than a year ago. For the fiscal year, analysts are looking for $11.36 per share (+11.6%) on $6.7 billion (+3.2%). The Memphis-based company's earnings have topped expectations in most recent quarters, by as much as 10%. The long-term EPS growth forecast is 12.4%, which is higher than the retail industry average, and the forward PE ratio estimate is 13.0. The stock impressed one fund manager and the Motley Fool as well. At $155.65, the share price is not too far from its 52-week high, but it recently slipped below the 50-day moving average.
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