Alcoa Inc. (NYSE: AA) kicks off another earnings season this week, and analysts surveyed by Thomson Reuters are looking for another net loss for the third quarter. Can we take that as a sign of things to come, or as a bellwether for the economy? Well, barring a big downside surprise, this will be the third narrower quarterly loss for Alcoa. But while Alcoa beat estimates in July, it missed them in April. Alcoa's shares, on the other hand, are up 145.6% since the March low, which is well more than twice as much either the Dow or the S&P 500.
During its third quarter, New York-based Alcoa continued restructuring efforts, remained a part of the DJIA Sustainability Index, and declared a quarterly dividend. It is expected to report a net loss of $0.12 per share for the three months that ended in September. That compares to a profit of $0.37 in the same period of last year. Third-quarter revenue is forecast to have fallen 38.3% to $4.5 billion. Analysts so far expect to see a profit in the fourth quarter, but not for the full year. Alcoa has missed earnings expectations in three of the past four quarters. The long-term EPS growth forecast is 20.0%, again much better than the S&P 500. The First Call consensus recommendation is to hold AA; CNBC concurs that now is not the time to buy. At $12.82, shares are 30.0% higher than three months ago, but 33.4% lower than a year ago.
PepsiCo Inc. (NYSE: PEP) and Pepsi Bottling Group Inc. (NYSE: PBG) are also scheduled to report their third-quarter results this week, and analysts anticipate that they are holding on, more or less.
Soft drink and snack food giant PepsiCo said it would merge with Pepsi Bottling, as well as invest in Russia, during the three months that ended in September, and it is expected to post a profit of $1.02 per share, four cents per share less than a year ago. Revenue for the quarter is expected to come to $11.3 billion, about the same as last year. So far, the forecast for the full year is for $3.71 per share (+0.8%) on $43.4 billion (+0.2%). PepsiCo only fell short of earnings expectations in one of the past four quarters, and that by only two cents per share. The long-term EPS growth forecast is 10.5%, which is better than rivals Coca-Cola Co. (NYSE: KO) and Dr Pepper Snapple Group Inc. (NYSE: DPS), and its earnings multiple is 15x. This dividend-paying company has been accumulating cash on hand in the past few quarters. The First Call consensus is to buy PEP, with a mean price target of $64.41. One money manager called it "underrated" here on BloggingStocks, and the Motley Fool called it too cheap to ignore. Shares are up only 15.6% in the past six months to $60.90, which is 11.7% lower than a year ago.
In addition to the above-mentioned merger with PepsiCo, Pepsi Bottling, the world's largest producer and distributor of Pepsi-Cola beverages, saw a new distribution agreement and the declaration of a quarterly dividend in the three months that ended in September. It is expected to report a profit of $1.06 per share, the same as a year ago. Revenue for the quarter is expected to be down 2.0% to $3.7 billion. So far, the forecast for the full year is for $2.39 per share (+5.0%) on $13.5 billion (-2.1%). Pepsi Bottling has topped earnings expectations in recent quarters, by as much as five cents per share. Its long-term EPS growth forecast is only 5% and its earnings multiple is 14x. Shares have been trading around $36 since early August, but they jumped up to a 52-week high of $37.37 on Friday.
Yum! Brands Inc. (NYSE: YUM), the fast food chain operator whose flagships include KFC, Pizza Hut, and Taco Bell, is expected to be holding its own as well. That is, analysts expect to see a third-quarter profit of $0.58, the same as a year ago. For the period that ended in September and that saw release of a popular iPhone app and an increase in the quarterly dividend, revenue is expected to be 1.5% lower to $2.8 billion. The full-year forecast is for $2.12 per share (+9.9%) on $11.0 billion (-2.7%). Yum! Brands has beat earnings estimates in the past five quarters, by as much as eight cents per share. Its long-term EPS growth forecast of 11.9% is better than that of rival McDonald's Corp. (NYSE: MCD), and its earnings multiple is 15x. The consensus recommendation remains to buy YUM, and the mean price target is $37.64. Shares have fallen 3.2% in the past three months to $33.15; they have been meeting resistance above $35 since May.
Family Dollar Stores Inc. (NYSE: FDO) has been benefiting from bargain-seeking consumers during the recession. But for its fiscal fourth-quarter, analysts are looking for earnings growth of only three cents per share from a year ago to $0.41. Sales for the period that ended in August are expected to be 3.4% higher to $1.8 billion. The full-year forecast is for $2.05 per share (+19.0%) on $7.4 billion (+6.2%). Family Dollar's earnings have met or beat the Street view in the past five quarters, beating consensus estimates by as much as five cents per share. This dividend payer's long-term EPS growth forecast is 12.2% and the earnings multiple is 12x. Its cash on hand has been growing over the past few quarters and was more than its long-term debt in the third quarter. The Motley Fool considers FDO a bargain stock, and Zacks feels Family Dollar will continue to benefit from frugal consumers. Family Dollar has not benefited from the recent rally, with shares having fallen 16.5% in the past six months to $26.63.
St. Louis-based agrochemical and biotech giant, Monsanto Co. (NYSE: MON), announced an acquisition, a collaboration, and a divestiture in its fiscal fourth quarter. It is expected to squeeze out a $0.01 per share profit, compared to a $0.03 per share loss in the same quarter of last year. Revenue is expected to have fallen 2.2% to $2.0 billion. And for the full year, analysts expect to see $4.41 per share (+17.5%) on $11.9 billion (+3.3%). Monsanto has reported better-than-expected earnings in the past three quarters. The long-term EPS growth forecast for this dividend payer is 12.0%, and its earnings multiple is 20x. The consensus recommendation is to buy MON; the mean price target is $89.69. Morningstar recently pointed to MON as an undervalued stock. At $74.93, shares are 4.1% higher than three months ago, but are 10.0% lower than a year ago.
Also watch for quarterly results from Costco Wholesale Corp. (NASDAQ: COST), Marriott International Inc. (NYSE: MAR), and Mosaic Co. (NYSE: MOS) this week.











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