Week in Preview: End-of-Quarter Earnings and March Unemployment Rate
The calendar quarter winds down this week and quarterly reports due out include Apollo Group (APOL), Carmax (KMX), Global Payments (GPN), Krispy Kreme (KKD), Lennar (LEN) and McCormick (MKC). But analysts surveyed by Thomson Reuters have high hopes for results from fertilizer and animal feed maker Mosaic (MOS), apparel maker Phillips Van Heusen (PVH) and discount retailer Family Dollar (FDO). So here's a look at what analysts anticipate from these three companies.
Mosaic
During its fiscal second quarter, Cargill agreed to distribute its stake in Mosaic, and Mosaic also said it would redeem senior notes. Analysts anticipate that the Minnesota-based potash producer will report per-share earnings of $1.07, a jump of 53.3% from the same quarter of last year. Mosaic also is expected to post revenue of $2.4 billion for the three months that ended in February, which is a 35.9% rise from a year earlier.
Looking ahead to the third quarter, analysts expect sequential and year-over-year growth, both in earnings per share (EPS) and in revenue. Note though that Mosaic earnings have beat consensus expectations in just two of the past four quarters.
Mosaic has a long-term EPS growth forecast of 14.3%, as well as a forward price-to-earnings ratio of 16.1, though that is lower than the industry average. Its PEG ratio is 1.1, the dividend yield is a mere 0.2%, but the return on equity (ROE) is a healthy 54.3%. Citigroup (C) just downgraded MOS, but InvestorPlace expects strong results. The share price hit a 52-week high of $89.24 in February but has since pulled back and ended last week at $78.82.
Phillips Van Heusen
Phillips Van Heusen announced a sponsorship deal with the NFL and also reaffirmed its guidance during the three months that ended in January. Analysts expect the New York-based maker of Calvin Klein and Izod shirts to report that its revenue surged 122.3% to $1.4 billion. And they predict that fiscal forth-quarter earnings came to 82 cents per share, compared to 61 cents per share a year ago.
Analysts also forecast full-year earnings of $3.94 per share (up 28.2%) on revenue of $4.6 billion (up 91%). And its earnings have topped consensus estimates in recent quarters by as much as 19 cents per share.
The long-term EPS growth forecast is 13.7%, which is higher than that of competitors Oxford Industries (OXM) and Polo Ralph Lauren (RL). Phillips Van Heusen's forward P/E of 13.3 is less than the trailing P/E, indicating expectations of stronger growth. And it has a PEG ratio of 0.9. The dividend yield is 0.3% and the ROE is 15.6%.
The First Call consensus recommendation has been to buy PVH for more than 90 days, and the mean price target for the stock currently is $73.50. Goldman Sachs (GS) has a conviction buy rating on PVH and expects an earnings beat. Shares have traded between $55 and $65 since the beginning of the year, but the stock price ended the last week above both the 50-day and 200-day moving averages.
Family Dollar
Analysts anticipate that the operator of the nation's No. 2 dollar-store chain will post fiscal second-quarter earnings of 97 cents per share, up 16.5% year over year. Revenue is expected to have risen 8.4% to $2.3 billion during the three months that ended in February. North Carolina-based Family Dollar boosted its dividend and received a buyout offer during that period.
Looking ahead to the third quarter, the forecast thus far calls for similar year-over-year growth for both EPS and revenue. Family Dollar has topped consensus EPS estimates in four of the past five quarters, but missed by two cents per share in the first quarter.
Family Dollar has a long-term EPS growth forecast of 14.5%, which tops that of competitor Dollar Tree (DLTR). Family Dollar's 16.1 forward P/E is lower than both its trailing P/E and the sector average. The PEG ratio is 1.1, and there's also a dividend yield of 1.2% and a ROE of 21.4%. Short interest has been falling since last summer and is now about 3% of the float. But some options traders seem to expect weakness. The share price recently hit a 52-week high of $55.62 and is up 40% from a year ago.
End-of-Quarter Economic Data
As usual, monthly employment data will the focus as the calendar page turns. Here's what else is on tap this week:
Monday: Personal income data and pending home sales in February
Tuesday:Consumer Confidence Index
Wednesday:Challenger Job-Cut Report
Thursday:ADP National Employment Report, as well as motor vehicle sales numbers for March
Friday:Unemployment rate for March, as well as construction spending in February and the ISM Manufacturing Index for March
While consumer confidence is expected to fall, reflecting concern about events in Japan and the Middle East, little change is expected in the unemployment rate, even as some jobs were added.
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