AOL Money & Finance

The week in preview: Seeking more signs of economic stability

More

Last week's Fed Beige Book report and GDP numbers suggested that the economy may be stabilizing, and this coming week will bring plenty of economic data to confirm or deny that suggestion. On the schedule are consumer credit, construction spending, factory orders, and pending home sales for June, the employment situation, the Import Price Index, and new motor vehicle sales for July, as well as the ISM Manufacturing and Non-manufacturing Indexes for July.

The week will also bring quarterly reports from home builders Beazer Homes USA Inc. (NYSE: BZH), D.R. Horton Inc. (NYSE: DHI), and Pulte Homes Inc. (NYSE: PHM). Yet again, analysts surveyed by Thomson Reuters expect all three to have narrowed their losses in the most recent quarter. However, they've all tended to post deeper-than-expected losses in recent quarters as well. Analysts also expect to see their revenue down 45% or more for the past quarter. They forecast long-term EPS growth of 7% or more, but none of these homebuilders has a First Call consensus buy recommendation, not surprisingly. Short interest is falling off for Beazer and D.R. Horton, and D.R. Horton and Pulte have been reporting positive cash flow from operations, but all three of them said they had more long-term debt than cash in hand last time around. Mortgage insurer PMI Group Inc. (NYSE: PMI) is likewise expected to report that it narrowed its second-quarter loss.

Companies expected to report lower earnings this week include Allstate Corp. (NYSE: ALL), Archer Daniels Midland Co. (NYSE: ADM), CBS Corp. (NYSE: CBS), Cisco Systems Inc. (NASDAQ: CSCO), Kraft Foods Inc. (NYSE: KFT), Marathon Oil Corp. (NYSE: MRO), Polo Ralph Lauren Corp. (NYSE: RL), Procter & Gamble Co. (NYSE: PG), and Whole Foods Market Inc. (NASDAQ: WFMI). But analysts anticipate the real earnings losers will be Toyota Motor Corp. (NYSE: TM) and financial giant MBIA Inc. (NYSE: MBI), which are expected to report swinging to losses from a year ago.

But there should be plenty of good earnings news this week as well. Here are a few for which analysts appear to have high hopes. That is, these companies are expected to report double-digit earnings grown in the most recent quarter, they have tended to offer positive surprises in recent quarters, and they have long-term EPS growth forecasts of greater than 10%. Also, the analysts' consensus recommendation is to buy each of them.

Insurer and Medicare provider Humana Inc. (NYSE: HUM) named a new chief marketing officer in the second quarter. The Louisville, Ky.-based company is expected to report that earnings rose 24.4% from a year ago to $1.64 per share. Revenue is expected to total $7.8 billion, 5.7% higher than a year ago. Humana reported more cash on hand than long-term debt in the previous quarter. The Motley Fool recently featured Humana as a stock ready to pop due to its growth potential and cash. Shares are up 13.6% in the past three months to $32.85, but they are still down 11.9% year to date.

VeriSign Inc. (NASDAQ: VRSN) provides internet and network services to telecoms and other enterprise customers. In its second quarter, the Mountain View, Calif.-based company spun off its Real-Time Publisher Services and Communications Services Groups. Analysts are looking for VeriSign to report that earnings rose 21.9% from a year ago to $0.32 per share. Revenue is expected to come to $255.2 million, which is 9.5% higher. VeriSign has an earnings multiple of 15x, and it also reported more cash on hand than long-term debt in the previous quarter. The share price is down 4.0% from three months ago to $20.44, and down 36.2% from a year ago.

A leading producer of dairy products, Dean Foods Co. (NYSE: DF) announced a stock offering and an acquisition in its second quarter. The Dallas-based company is expected to post a second-quarter profit that is 21.4% higher to $0.42 per share. However, revenue is expected to have fallen 9.5% from a year ago to $2.8 billion. Dean Foods has an earnings multiple of 13x, and Investopedia is optimistic for an earnings beat from Dean Foods. Shares are 11.9% higher than three months ago, or $21.19, which is just 1.2% higher than a year ago.

With more than 24 million subscribers, Comcast Corp. (NASDAQ: CMCSA) is the largest provider of cable television in the U.S., as well as a leading internet and digital phone service provider. In the second quarter that included the digital television conversion, the Philadelphia-based company is expected to post a profit of $0.26 per share on revenue of $8.9 billion. That's up from $0.21 per share on of $8.6 billion in the year-ago period. This dividend-paying company has reported cash flow from operations rising over the past few quarters. The Motley Fool recently pointed to Comcast as a bargain. Shares have dropped 9.2% in the past three months to $14.86, despite a 7.0% rise in the past month.

Dollar Tree Inc. (NASDAQ: DLTR) announced the retirement of a board member at its annual meeting in June. For the second quarter, the discount retailer's earnings are forecast to come to $0.50 per share on revenue of $1.2 billion. That's up from $0.42 per share on of $1.1 billion a year ago. Dollar Tree has much more cash on hand than long-term debt, according its last report, and an earnings multiple of 15x. Investopedia suggests that retailers like Dollar Tree will continue to grow after the recession passes. The share price reached a multiyear high of $47.28 last week and they are 10.6% higher year to date.

Others expected to post higher profits this week include Clorox Co. (NYSE: CLX), Coinstar Inc. (NASDAQ: CSTR), CVS Caremark Corp. (NYSE: CVS), DIRECTV Group Inc. (NASDAQ: DTV), Jack in the Box Inc. (NASDAQ: JACK), Live Nation Inc. (NYSE: LYV), Molson Coors Brewing Co. (NYSE: TAP), Public Storage Inc. (NYSE: PSA), Tyson Foods Inc. (NYSE: TSN), and many others.

Visit AOL Money & Finance for more earnings coverage.

Reader Comments (Page 1 of 2)

Symbol Lookup
IndexesChangePrice
DJIA-158.4110,305.99
NASDAQ-35.952,140.10
S&P 500-17.961,092.67

Last updated: November 27, 2009: 10:41 AM

BloggingStocks Exclusives

Hot Stocks

DailyFinance Headlines

Latest from BloggingBuyouts

TheFlyOnTheWall.com Headlines

BioHealth Investor Headlines

WalletPop Headlines

My Portfolios

Track your stocks here!

Find out why more people track their portfolios on AOL Money & Finance then anywhere else.

BloggingStocks Partners

More from AOL Money & Finance

WalletPop Headlines