Bank of America, Verizon, Travelers and Prudential Financial are part of Zacks Earnings Preview: - KMPH FOX 26 | Central San Joaquin Valley News Source

Bank of America, Verizon, Travelers and Prudential Financial are part of Zacks Earnings Preview:

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE Zacks Investment Research, Inc.

CHICAGO, Feb. 10, 2014 /PRNewswire/ -- Zacks.com releases the list of companies likely to issue earnings surprises. This week's list includes Bank of America (NYSE:BAC-Free Report), Verizon (NYSE:VZ-Free Report), Travelers (NYSE:TRV-Free Report) and Prudential Financial (NYSE:PRU-Free Report).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here.

Positive Surprises & Negative Guidance

The jobs report didn't remove doubts about the economy, but investors don't appear ready to give up; at least not yet. Whether the frigid weather has anything to do with the recent run of soft data or not, it has nevertheless been a pain in the neck. Hard to envision how the green shoots will sprout with all the snow sitting around.

We may not be 100% sure about what's going in the economy, but there is little doubt about the corporate earnings picture. The Q4 earnings season is by no means over, with more than 400 companies releasing results this week, including 55 S&P 500 members. But the bulk of the reporting season is now behind us, giving us a good enough sense of how good, or otherwise, this reporting season has been.  

We are sticking with our overall take that the Q4 earnings season has turned out to be no worse than other recent quarters. In fact, this earnings season is better than recent quarters in terms of earnings growth and positive surprises. Where it's no different from other recent quarters is in terms of lackluster top-line growth and continued negative guidance.

It appears that investors were looking for something better, particularly on the guidance front. The hope was that given the improving domestic economic scene and signs of stabilization in Europe, we will get relatively reassuring guidance from management teams. But we didn't get that, with managements continuing to provide sub-par outlooks for the coming quarter(s).

In other words, management teams are dishing out what they have been doing for more than a year now. And this is prompting estimates for the current quarter to come down, as the chart below shows.

Q4 Earnings Scorecard (as of Friday, 2/7/2014)

Total earnings for the 345 S&P 500 members that have reported already, combined accounting for 78.6% of the index's total market capitalization,  are up +11.4% from the same period last year, with a 'beat ratio' of 69.6% and a median surprise of +2.5%. Total revenues are barely in the positive column, up only +0.2%, with a revenue 'beat ratio' of 62.6% and a median surprise of +0.8%.

More companies have beat earnings and revenue expectations than has been the case in recent quarters, as the chart below shows. Perhaps expectations had fallen a bit low ahead of the Q4 reporting season.

The earnings growth rate for these 345 companies is better than what we saw from this same group of companies in Q3 and the 4-quarer average. A big contributor to the strong Q4 earnings growth is easy comparisons for three companies – Bank of America (NYSE:BAC-Free Report), Verizon (NYSE:VZ-Free Report), and Travelers (NYSE:TRV-Free Report). Exclude these three companies and total earnings growth for the S&P 500 companies that have reported drops to +6.7% from the 'headline' +11.4%, which is about where growth has been in recent quarters.

The revenue growth rate is notably weak, but that's primarily because of the Finance and Energy sectors.

Prudential Financial (NYSE:PRU-Free Report) had an unusually large top-line gain in the year-earlier quarter and is a big reason for the Finance sector's -12% drop in reported revenues. Excluding these two sectors, total revenue growth for the S&P 500 improves to +4.4%, which compares to +4.6% gain for the same group of companies in Q3 and the 4-quarter average of +2.9%. What this means is that top-line growth is weak, but it's as weak as the 'headline' +0.2% gain would make you believe.  

The Composite Growth Picture

The 'composite' picture for Q4, where we combine results from the 345 companies that have reported already with the 155 still to come, is for growth rate of +8.9%. This will be the highest quarterly growth pace of 2013, with easy comparisons playing a non-trivial role in propping up the growth pace. The +8.9% growth rate compares to +5.0% in Q3 and +4% in Q2.

Finance remains a big growth driver in Q4 – total earnings growth for the S&P 500 in Q4 drop to +5.9% once the sector is excluded. Energy continues to be a drag on aggregate growth, with total earnings for the sector expected to be down -9.8% in Q4 after declining -8.4% in Q3. Excluding the Energy sector, total Q4 earnings for the S&P 500 would be up +11.7% vs. +6.9% in Q3.  

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Click to subscribe to this free newsletter today.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros.  In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros.

Get the full Report on BAC - FREE

 Get the full Report on VZ - FREE

 Get the full Report on TRV - FREE

Get the full Report on PRU - FREE

Follow us on Twitter:  http://twitter.com/zacksresearch

Join us on Facebook:  http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

http://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

©2012 PR Newswire. All Rights Reserved.

Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KMPH. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.