Earnings to Watch Out for: AA, SWY, JPM, WFC

PUBLISHED: Oct 08 2012 @ 10:06 | Comments (0) | More info about Ed Liston

I have already started dreaming about holiday season, but before that there is another season waiting which is promising to be even more exciting. Yes, that’s right; it’s the earnings season, which is all set to start this week. Quarterly earnings reporting is an important event for the company, analysts and investors alike.

Markets have been trading well so far and the earnings season will test the robustness of this rally. The signs are not good for the season and it is likely that many major companies will not be able to meet their guidance but they are also likely to perform worse on year over year basis. Either way, earnings season is an important time for any investor to shuffle their portfolio. So, let’s take a look at the major companies scheduled to announce their quarterly earnings this week:

Alcoa Inc. (NYSE:AA): The company is scheduled to announce its quarterly numbers on Tuesday. According to street estimates, Alcoa will be barely scraping by and is likely to report about a penny per share in earnings. This would represent 92.9 percent decline from the earnings reported in the corresponding quarter in 2011. For the current fiscal year, the company surpassed analysts’ expectations in the first quarter, whereas in the second quarter, it fell in line with consensus estimates. For the third quarter, the company was expected to report about 12 cents per share in earnings. However, in the past three months, the consensus has been brought down to a cent per share. In the early trading, the stock is at $9.02, down 0.77 percent from its previous close of $9.09. It has traded in the range of $7.97 and $11.66 in the past 52 weeks. Alcoa is trading below its short term 20 days moving average price and long term 50 days moving average price of $9.08.

Safeway Inc. (NYSE:SWY): The stock is trading 0.43 percent down from its previous close of $16.16 and is currently at $16.09. Safeway is scheduled to announce its third quarter earnings on October 11, 2012. The company had reported its second quarter revenue at $10.4 billion, 3.8 percent higher than the revenue for the second quarter of the previous year. The company had also managed to surpass consensus estimates. For this quarter, it’s likely to report less than 2 percent higher revenue at $10.24. Its third quarter earning is estimated to be at $0.43 per share, up 11 percent from the third quarter of the last year. The stock is trading below its 20 days moving average price of $16.12 and 50 days moving average price of $16.15. Safeway commands market capitalization of $3.85 billion and its stock is trading at Price Earnings ratio of 8.70. The stock has traded in the range of $14.73 and $23.16 in the past 52 weeks.

JPMorgan Chase & Co. (NYSE:JPM): Among the most prominent banking stocks, JPMorgan Chase is scheduled to report its third quarter earnings on Friday, October 12. The banking stock is currently trading at $41.41, down 0.72 percent from its previous close of $41.72. JPMorgan Chase is expected to report its third quarter earnings at $1.21 per share, up from $1.02 per share it had reported a year earlier for the corresponding quarter. The stock is trading below its 50 days moving average price of $41.51. JPMorgan Chase has market capitalization of $157.42 billion and its stock is trading at beta of 1.33. Citigroup has rated the banking stock as Buy and has set its price target at $48. Oppenheimer also holds the same verdict of Outperform for the stock.

Wells Fargo & Company (NYSE:WFC): The stock has made pretty good gains in last three months. The banking company is expected to report $0.87 per share for the third quarter of the year, up from $0.72 per share in earnings it had reported for the corresponding quarter of the last year. The company had failed to meet consensus estimates in the third quarter of the last year. Wells Fargo is currently trading at $35.78, down 0.17 percent. The company stock is trading at Price Earnings ratio of 11.87 and its beta is at 1.13. Wells Fargo is currently trading below its 20 days moving average price and 50 days moving average price of $35.71. The stock has been rated ‘Hold’ by Deutsche Bank and its price target is set at $36, whereas Raymond James considers the stock to be Strong Buy with price target of $43.

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