While the earnings crunch for this quarter is all but over, there is still plenty of action in the earnings arena this coming week. For instance, analysts surveyed by Thomson Financial are expecting America's Car Mart Inc. (NASDAQ: CRMT) and Campbell Soup Co. (NYSE: CPB) to be among this week's top earnings gainers.
Bentonville, Ark.-based America's Car Mart is expected to post net income of 38 cents per share (up 52.6% from the same period a year ago) on revenue of $73.8 million (up 25.8%). The used car dealer chain has tended in recent quarters toward positive surprises -- by 21 cents per share, or 73.5%, in the previous quarter. The long-term EPS growth forecast is 15%, about the same as the S&P 500. The consensus recommendation of analysts is to buy CRMT.
Campell is tentatively scheduled to report this week, and the world's biggest soup maker is expected to post net income of 25 cents per share (up 44.0% from a year ago) on revenue of $1.7 billion (up 7.5%). The Camden, N.J.-based company has just missed earnings estimates in the past three quarters. Its long-term EPS growth forecast is 7.5%, which is less than the industry average, but about the same as rivals Kraft Foods (NYSE: KFT) and Heinz (NYSE: HNZ). The analysts' consensus recommendation is currently to buy Campbell.
TheStreet.com's Jim Cramer says all that money has to go somewhere, and this is a likely destination.
Clash of the ideals! Oil's down, and what can you buy when there's so much bad bank news? What can you buy when Wachovia (NYSE: WB) (Cramer's Take) is boosting reserves and Morgan Stanley (NYSE: MS)) (Cramer's Take) is still being pursued by authorities and JPMorgan (NYSE: JPM) (Cramer's Take) says July stunk and UBS (NYSE: UBS) (Cramer's Take) is so tarnished that you can't believe it was once the most conservative blue chip out there.
The answer is tech, of course!
Wait a second. Would anyone mind if we actually had a reason to buy tech beyond the Kindle, the device that made Citigroup gaga about Amazon (NASDAQ: AMZN) (Cramer's Take) -- not that you needed a device to do that.
Sure, we have pre-seasonality. Remember, you are supposed to buy tech at the end of the summer, not that anyone waits that long.
National Semiconductor (NYSE: NSM) manufactures a broad range of analog and mixed signal semiconductor devices and subsystems. Products include power management circuits, display drivers, audio and operational amplifiers, interface products and data conversion devices. These are used in communications, networking, automotive, test measurement and aerospace applications. Customers include IBM (NYSE: IBM), Motorola (NYSE: MOT) and Sony (NYSE: SNE). Texas Instruments (NYSE: TXN) is a major competitor.
The firm pleased investors last week, when it reported Q4 EPS of 34 cents and revenues of $462 million. Analysts had been looking for 26 cents and $449.5 million. The gross margin of 65.9% was up sequentially and year over year, driven by cost efficiencies and an improved product mix of higher-value analog devices. Management also guided Q1 revenues to $460-$475 million ($451.22M consensus) and FY09 EPS to about $1.45-$1.51 ($1.24 consensus).
The fourth quarter turned out to be a good one for National Semiconductor Corp. (NASDAQ: NSM) and Brown-Forman Corp. (NYSE: BF.B), producer of Jack Daniels Tennessee Whiskey. On Thursday, both companies reported results that beat Wall Street forecasts.
For the quarter ended May 5, National Semiconductor, the Santa Clara, Calif.-based chip maker, reported net income of $83.2 million, or 34 cents per share. Revenue rose to $462 million from $455.9 million in the year-ago period.
Analysts polled by Thomson Financial expected income of 26 cents per share on revenue of $449.5 million.
For the full fiscal year, National Semiconductor recorded net income of $332.3 million, or $1.26 per share, and revenue slipped to $1.89 billion from $1.93 billion.
The company also forecast fiscal first-quarter revenue of $460 million to $475 million, compared to analysts' expectations of $451.2 million.
Shares of National Semiconductor rose 78 cents, or 3.6%, to close at $22.66, and climbed another $2.13, or 9.4% in after-hours trading.
RBC Capital Markets has a price target of $18 on NSM.
NSM June option implied volatility is at 46; July is at 40 above its 26-week average of 38 according to Track Data, suggesting larger price movement.
Ciena (NASDAQ: CIEN) closed at $29.97 Monday. CIEN is scheduled to report Q2 EPS on June 5.
Bank of America has Neutral rating with a $32 price target on CIEN.
CIEN June option implied volatility of 65 and July option implied volatility of 57 is above its 26-week average of 55 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
Here's a peek at what analysts surveyed by Thomson Financial are expecting from companies scheduled to report quarterly results in the first week of June, 2008.
The following companies are expected to post earnings growth, compared to the same period in the previous year:
Take-Two Interactive (NASDAQ: TTWO) up 136.6% (from a loss) to $1.12 per share, on $499.1 million in revenue
MOST NOTEWORTHY: National Semi, E.W. Scripps and Dell were today's noteworthy upgrades.
Deutsche Bank upgraded shares of National Semiconductor Corp (NYSE: NSM) to Buy from Hold as it expects the company to benefit from a rebound in margins and revenue through 2008.
Bear upgraded E.W. Scripps (NYSE: SSP) to Outperform from Peer Perform based on strength in the network cable market and third party interest in potentially acquiring Scripps Networks Interactive.
Morgan Stanley upgraded Dell (NASDAQ: DELL) to Overweight from Equal Weight based on the company's competitively priced systems and a broader product portfolio.
OTHER UPGRADES:
Goldman Sachs added Apple (NASDAQ: AAPL) to its Conviction Buy List.
The firm also raised Arcelor Mittal (NYSE: MT) to Buy from Neutral and added shares to the Pan-European Buy List.
Nasdaq (NASDAQ: NDAQ) was upgraded at Merrill to Buy from Neutral.
Deutsche Bank upgraded National Semiconductor (NYSE:NSM) from "hold" to "buy", according toMarketWatch. The financial website also reports that Moody's downgraded AIG's (NYSE:AIG) senior unsecured debt rating to Aa3 from Aa2.
Morgan Stanley upgraded Dell (NASDAQ:DELL) from "equal weight" to "overweight" according toBriefing.com. The news service also reports that Merrill Lynch has raised it price target on Apple (NASDAQ:AAPL) from $186 to $215.
Douglas A. McIntyre is an editor at 247wallst.com.
MOST NOTEWORTHY: J. Sainsbury, Orthofix and Salary.com were today's noteworthy downgrades:
Merrill Lynch downgraded J. Sainsbury (Other OTC:JSAIY) to Sell from Neutral following the company's quarterly results; Deutsche Bank downgraded shares to Sell from Hold as they believe the company's results show it has lost momentum.
ThinkPanmure downgraded Orthofix (NASDAQ:OFIX) to Source of Funds from Accumulate citing the loss of Osteocel, which will impact growth.
Wachovia cut Salary.com (NASDAQ:SLRY) to Market Perform from Outperform citing concerns that FY09 will be a challenging given significant increases in investment for sales and marketing.
MOST NOTEWORTHY: Analog Semiconductors, OrthoVita and First Solar were today's noteworthy initiations:
Morgan Stanley initiated Analog Semiconductors with an In Line rating. The firm assumed National Semiconductor Corp (NYSE: NSM) with an Overweight rating and $26 target and is the firm's top pick; Analog Devices (NYSE: ADI) and Linear Tech (NASDAQ: LLTC) were initiated with Equal Weight ratings and a $32 target and $34 target, respectively.
Barrington believes OrthoVita (NASDAQ: VITA) is the market share and technological leader of the biomaterials market. The firm assumed shares with an Outperform rating and $4 target.
Canaccord Adams believes First Solar's (NASDAQ: FSLR) management and business model are among the best of any PV company and that execution has led to strong profitability plus a successful aggressive capacity ramp. Shares were started with a Buy rating and $325 target.
OTHER INITIATIONS:
Morgan Stanley initiated Yum! Brands (NYSE: YUM) and Domino's Pizza (NYSE: DPZ) with Equal Weight ratings and targets of $40 and $15, and also initiated McDonald's (NYSE: MCD) and Burger King (NYSE: BKC) with Overweight ratings and targets of $65 and $34.
Lehman initiated Alcoa (NYSE: AA) with an Overweight rating and $44 target.
MOST NOTEWORTHY: Bed Bath & Beyond, DSW Inc and Oplink Comm were today's noteworthy downgrades:
JP Morgan downgraded Bed Bath & Beyond (NASDAQ: BBBY) to Underweight from Neutral citing recent sales commentary from competitors and the difficult macro environment.
Oppenheimer cut DSW Inc (NYSE: DSW) to Perform from Outperform following the company's Q1 miss and lower than expected guidance, as they see little visibility in the coming quarters.
Piper downgraded shares of Oplink Communications (NASDAQ: OPLK) to Sell from Neutral following the company's negative earnings preannouncement and lowered their target to $9.00 from $14.
OTHER DOWNGRADES:
Tiffany (NYSE: TIF) was downgraded to Sell from Neutral at Merrill.
While the earnings crunch for this quarter is all but over, there is still plenty of action in the earnings arena this coming week. For instance, analysts surveyed by Thomson Financial are expecting America's Car Mart Inc. (NASDAQ: CRMT) and Campbell Soup Co. (NYSE: CPB) to be among this week's top earnings gainers.
National Semiconductor
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