The second half of the calendar year has begun, and earnings return to the spotlight this week. As usual, Alcoa Inc. (NYSE: AA) is among the first of the S&P 500 to report quarterly results. For the second quarter in which Alcoa agreed to sell its wire harness and electrical distribution business and its fastening systems business expanded into Morocco, analysts surveyed by Thomson Reuters expect the New York-based aluminum producer to report swinging to a net loss of $0.34 per share from a profit of $0.66 per share in the year-ago period. Second quarter revenue is expected to have fallen 48.3% to $3.9 billion. The full-year forecast is currently for a loss of $1.04 per share and revenue of $16.7 billion (-38.0%). Alcoa has missed expectations in the past three quarters, by as much as 17 cents per share. The long-term EPS growth forecast is 10.0%, which is better than the sector average. Alcoa slashed its dividend earlier this year, and the First Call consensus recommendation remains to hold AA. However, TheStreet.com recommends it as an against-the-grain pick. At $9.86, shares are down 12.4% since the beginning of the year, and recently have been bumping up against the 200-day moving average.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Eagle Outfitters Inc. (NYSE: AEO) reported better-than-expected Q1 earnings, lifting shares.
• AutoZone Inc. (NYSE: AZO) posted a better-than-expected Q3 profit said it will continue to buy back shares.
• Bank of Montreal (NYSE: BMO) reported lower Q2 earnings and also announced 1,100 layoffs.
• Big Lots Inc. (NYSE: BIG) higher Q1 earnings topped estimates even though same-store sales fell.
• BioMed Realty Trust Inc. (NYSE: BMR) earnings prospects after the recent capital raise led to a downgrade.

Dollar Tree (NASDAQ: DLTR) saw a nice increase in its bottom-line profit. The retailer, which reported earnings for the first quarter earlier this week, said it made 66 cents per share, good for an increase of more than 37%. Revenues increased 14%, and same-store sales went up a whopping 9%. So many retailers would absolutely kill to have that same-store number.

It's no secret why Dollar Tree is thriving. Bad economy plus items-that-sell-for-a-dollar-each equals retail success. Brand equity is important. So is convenience. But a cheap price point oftentimes trumps all.

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.

The New York Times reports that dollar stores are thriving as consumers look to pinch pennies: "The nation's dollar stores, those once-dowdy chains that lured shoppers by selling some or all of their merchandise for $1, are suddenly hot. They are busily opening new stores, outfitting existing stores with refrigerators and freezers, and sprucing up their aisles with better lighting, fresh paint and new signs."

Shares of Dollar Tree Inc. (NASDAQ: DLTR) have been strong performers as the company's same-store sales numbers have been terrific and the company plans ambitious new store opening plans. KKR's $7.3 billion acquisition of Dollar General in March of 2007 looks like one of the few good buyout deals to have come at the peak of that boom.

Family Dollar (NYSE: FDO) has had quite a run. Over the year shares in the super discount store chain have risen by roughly 65%, rising from just under $20 on April 7, 2008 to a closing price of just over $33 on April 6, 2008. The obvious reason is the awful economy.

Earnings later this morning are hotly anticipated. Our Piqqem Sentiment for Family Dollar is positive but beginning to trend down. Will cheap keep beating the Street?

• Merriman upgraded Taser (NASDAQ: TASR) to Buy from Neutral as it believes current valuation levels do not reflect the company's market opportunities and that the law enforcement funding in President Obama's stimulus plan will boost sales in Q4 and FY10.
  
• Goldman upgraded Macy's (NYSE: M) to Buy from Neutral and added shares to its Conviction Buy List based on reduced balance sheet concerns and improved risk/reward. The firm also raised their target to $8.25 from $8.
  
• JP Morgan upgraded Family Dollar (NYSE: FDO) to Neutral from Underweight and raised its target to $29 from $19 following the better-than-expected Q2 report. The analyst continues to prefer Dollar Tree (NASDAQ: DLTR) and Wal-Mart (NYSE: WMT).
• Goldman removed Universal Am (NYSE: UAM) from the Conviction Sell List.
  
• McDermott (NYSE: MDR) was upgraded to Buy from Hold at Jefferies.
  
• Canadian Natural (NYSE: CNQ) was upgraded to Sector Outperformer from Sector Performer at CIBC.

• Jefferies upgraded Ansys (NASDAQ: ANSS) shares to Buy from Hold following the company's reduced guidance as it now believes estimates are much more achievable. Despite the upgrade, the firm lowered its target price to $25 from $29.
  
• Deutsche Bank upgraded shares of Signet Jewelers (NYSE: SIG) to Buy from Hold on expectations the company will benefit from a capacity reduction in U.S. jewelry retailing.
  
• Thomas Weisel upgraded Omnicare (NYSE: OCR) to Overweight from Market Weight citing improving fundamentals and misunderstandings regarding Obama's healthcare proposal.
• Verizon (VZ) was lifted to Outperform from Sector Perform at RBC Capital.
  
• The Inventure Group (NYSE: SNAK) was raised to Buy from Hold at Roth Capital.
  
• Chico's FAS (NYSE: CHS) was upgraded at Friedman Billings to Outperform from Market Perform.

• Stephens downgraded Wilbros Group (NYSE: WG) to Equal Weight from Overweight to reflect a lack of visibility into earnings and deterioration in the company's end markets. The firm lowered its target price to $9.
• Jefferies downgraded Limelight Networks (NASDAQ: LLNW) to Hold from Buy as it believes the company can not sustain profits or cash flow this year given its capex requirements. The firm lowered its target price to $3 from $4.
  
• Barclays cut SLM Corp (NYSE: SLM) to Equal Weight from Overweight following President Obama's proposal to eliminate Federal Family Education Loan Program.
• Synta Pharma (NASDAQ: SNTA) was lowered to Hold from Buy at Roth Capital and to Sector Perform from Outperform at RBC Capital.
  
• U.S. Cellular (NYSE: USM) was downgraded at Baird to Underperform from Neutral.
  
• Paychex (NASDAQ: PAYX) was downgraded to Sell from Neutral at Goldman.

• ThinkEquity expects Emulex (NYSE: ELX) to generate positive FCF in 2010 and views valuation as attractive. Shares were initiated with a Buy rating and $7 target.
  
• Lazard Capital initiated Constant Contact (NASDAQ: CTCT) with a Buy rating and $19 target. The firm believes the company is well positioned in the Software as a Service category of E-mail Marketing.
• Morgan Stanley assumed Dollar Tree (NASDAQ: DLTR) with an Overweight rating and $45 target and Family Dollar (NYSE: FDO) with an Equal Weight rating.
  
• Regal Entertainment (NYSE: RGC) was started at Barclays with an Overweight rating and $14 target.

Analyst upgrades:

• UBS upgraded Dollar Tree (NASDAQ: DLTR) to Buy from Neutral but lowered its target to $42 from $45 following the solid Q4 report. The firm expects Dollar Tree's cost containment to continue. JP Morgan upgraded shares to Overweight from Neutral on valuation as it believes the recent pullback is overdone and the company set achievable FY09 guidance. The firm has a $43 target on the stock.
  
• JP Morgan also upgraded Smithfield Foods (NYSE: SFD) to Overweight from Neutral on valuation as they find the stock oversold at current levels.
  
• KeyBanc upgraded Nordson (NASDAQ: NDSN) to Hold from Underweight based on valuation, strong balance sheet and cost reductions, and a solid track record of execution.
• Philips Electronics (NYSE: PHG) was upgraded to Neutral from Underweight at HSBC.
  
• Aeropostale (NYSE: ARO) was raised to Equal Weight from Underweight at Barclays.
  
• Carter's (NYSE: CRI) was upgraded at Goldman to Neutral from Sell.

Analysts surveyed by Thomson Reuters expected the parade of earnings declines to continue into the final week of February, with Martha Stewart Living Omnimedia Inc. (NYSE: MSO), Nordstrom Inc. (NYSE: JWN), Home Depot Inc. (NYSE: HD), Wynn Resorts Ltd. (NASDAQ: WYNN), Macy's Inc. (NYSE: M), DreamWorks Animation SKG Inc. (NYSE: DWA), Limited Brands Inc. (NYSE: LTD), Target Corp. (NYSE: TGT), Royal Bank Of Canada (NYSE: RY), Del Monte Foods Co. (NASDAQ: DLM), Kohl's Corp. (NYSE: KSS), Washington Post Co. (NYSE: WPO), Dell Inc. (NASDAQ: DELL), Gap Inc. (NYSE: GPS), Campbell Soup Co. (NYSE: CPB), RadioShack Corp. (NYSE: RSH), and H.J. Heinz Co. (NYSE: HNZ) all expected to post lower earnings for the most recent quarter. Office Depot Inc. (NYSE: ODP), Saks Inc. (NYSE: SKS), and Cooper Tire & Rubber Co. (NYSE: CTB) are expect to have swung to a loss.

• Citigroup upgraded shares of Liberty Property Trust (NYSE:LRY) to Hold from Sell to reflect the company's capital raises and progress on leasing over the past quarter. The firm raised their target price to $21 from $16.
  
• UBS upgraded shares of Lonmin (Other OTC:LNMIY) to Neutral from Sell as they believe Xstrata may make an offer for the company.
  
• Cantor Fitzgerald upgraded RadiSys (NASDAQ:RSYS) to Buy from Hold after the company reported better-than-expected Q4 results and provided Q1 guidance which the firm believes indicates that fiscal 2009 results will be better than expected. The firm set a target of $8.50.
• Duke Energy (NYSE:DUK) and PG & E (NYSE:PCG) were raised to Outperform from Sector Perform at RBC Capital.
  
• Techne (NASDAQ:TECH) was upgraded at Baird to Outperform from Neutral.

• Oppenheimer upgraded AmerisourceBergen (NYSE:ABC) to Outperform from Perform on the company's strong branded drug price inflation, potential for greater than expected buybacks, and their belief that prescription volume growth will stabilize after Q1. The firm raised their target to $45 from $36.
  
• Baird upgraded Ecolab (NYSE:ECL) to Outperform from Neutral based on valuation following reaffirmed guidance.
  
• Goldman removed shares of Dollar Tree (NASDAQ:DLTR) from its Conviction Sell List and upgraded it to Neutral from Sell based on valuation.
• Teppco Partners (NYSE:TPP) was upgraded to Outperform from Market Perform at Wachovia.
  
• Barrick Gold (NYSE:ABX) was raised to Buy from Hold at Canaccord.
  
• Coca Cola Femsa (NYSE: KOF)) was upgraded at Morgan Stanley to Overweight from Equal Weight.

• RBC Capital downgraded Apple (NASDAQ:AAPL) shares to Underperform from Sector Perform and lowered their target to $70 from $125 following the announcement that CEO Steve Jobs is taking a medical leave of absence. The analyst expects shares to be pressured by reduced earnings growth expectations and near-term leadership uncertainty.
  
• Barclays downgraded Motorola (NYSE:MOT) to Equal Weight from Overweight as they do not expect handset recovery for at least 6 to 9 months.
  
• Banc of America/Merrill downgraded Shire (NASDAQ:SHPGY) to Underperform from Buy based on earnings risk from the upcoming generic launch of Adderall XR.
• Royal Caribbean (NYSE:RCL) was added to Goldman's Conviction Sell List.
  
• Starent Networks (NASDAQ:STAR) and Ceragon Networks (NASDAQ:CRNT) were downgraded to Equal Weight from Overweight at Barclays.
  
• Casella Waste (NASDAQ:CWST) was lowered at JP Morgan to Neutral from Overweight.

• Citigroup initiated Cliffs Natural (NYSE:CLF) with a Buy rating and $43 target. The firm believes the company's multi-tier North American contract sales arrangements should allow it weather the volatility in the spot and seaborne markets and the firm expects volumes to improve in Q2.
  
• ING started Arcelor Mittal (NYSE:MT) with a Sell rating and believes the economic slowdown will have a greater than expected impact on the steel industry.
  
• Friedman Billings believes weakness in M&T Bank's (NYSE:MTB) regional economy could hinder the company's growth prospects and the firm is concerned about the bank's concentration in commercial and industrial loans. The firm has an Underperform rating and $30 target on the stock.
• S&T Bancorp (NASDAQ:STBA) was initiated with a Market Perform rating at Keefe Bruyette.
  
• RBC Capital initiated Norfolk Southern (NYSE:NSC) with a Sector Perform rating and $61 target.

Family Dollar Stores (NYSE: FDO), a retailer that competes with Dollar Tree (NASDAQ: DLTR) and Wal-Mart Stores, Inc. (NYSE: WMT), reported earnings for the first quarter on Wednesday, and the market couldn't have been happier. As I was writing this, the stock was trading up over 13% on very nice volume. But, is 13 an unlucky number in this case? Would those buying in now be buying in too high?

Well, I can understand the euphoria surrounding the stock rise. To begin with, Q1 earnings beat estimates by two pennies. They came in at $0.42 per share, and that represented a double-digit growth rate for the bottom line of over 13% (there's that unlucky number again!). Top-line sales of approximately $1.8 billion essentially met expectations. When you think of Family Dollar's business and marketing model, you can understand why it's doing well. We're in one of the worst recessions ever, and people are looking for cheap prices on everything. I'm not the biggest fan of dollar-store businesses (for instance, I don't think I'd buy foodstuffs for a buck), but I do shop at them from time to time and can appreciate the allure. I think you can also understand why the stock is performing as well as it has been today: on top of the earnings beat, Family Dollar was the greatest S&P stock story of 2008 according to this source.

Here's the big question on everyone's mind: Is Family Dollar still a buy? If you're currently trading strength, I think you could buy this one after a pullback and then ride the stock to its 52-week high of over $32 per share. I see no reason why it won't make that level, especially if economic conditions continue to worsen (did I say if?). However, I certainly wouldn't be a buyer of today's rally. I think there's momentum behind this name, but I'll say this -- there are probably better bargains out there for any profit you might make from a trade on Family Dollar. So if you do make some bucks on it (pun intended), I'd probably take the profits and allocate them elsewhere. I'm just not sure that Family Dollar will be the best performer in '09 as well.

Disclosure: I don't own any company mentioned, but positions can change without notice.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• American Eagle Outfitters Inc. (NYSE: AEO) saw lower Q3 results in the tough retail envirnoment.
• Analog Devices Inc. (NYSE: ADI) Q4 profit surged but it lowered its Q1 forecast due to slowing orders.
• Borders Group Inc. (NYSE: BGP) had dismal Q3 results and said it had ceased its quest to sell itself.
• Campbell Soup Co. (NYSE: CPB) solid Q1 results beat estimates but shares fell despite a market rally.
• Deere & Co. (NYSE: DE) fell short of Q4 profit expectations and guidance was below estimates.
• Dollar Tree Inc. (NASDAQ: DLTR) had a bigger-than-expected Q3 profit and raised its full-year outlook.
• D.R. Horton Inc. (NYSE: DHI) reported a wider Q4 loss as home sales revenue declined by 50%.
• Hewlett-Packard Co. (NYSE: HPQ) posted strong Q4 numbers that didn't quite match the preliminary results.
• Salesforce.com Inc. (NYSE: CRM) had strong results and an optimistic forecast despite economic conditions.
• Starbucks Corp. (NASDAQ: SBUX) lowered its fiscal 2009 forecast and warned of further restructuring.
• Tiffany & Co. (NYSE: TIF) Q3 earnings declined but topped expectations, and it announced staff reductions.
• Warner Music Group Corp. (NYSE: WMG) Q4 earnings beat expectations though revenues fell slightly.
• Xerox Corp. (NYSE: XRX) forecast a full-year profit in line with estimates and said it is confident in its liquidity.

Upcoming earnings releases include Sears (NASDAQ: SHLD), Staples (NASDAQ: SPLS), Aeropostale (NYSE: ARO), Del Monte Foods (NYSE: DLM), Guess (NYSE: GES), Novell (NASDAQ: NOVL), Toll Brothers (NYSE: TOL), Big Lots (NYSE: BIG), Royal Bank of Canada (NYSE: RY).

Visit AOL Money & Finance for more earnings coverage.