With second-quarter corporate earnings season kicking into high gear, here are 10 companies that StarMine data indicates will deliver big disappointments or positive surprises.
About 194 of companies in the S&P 500 had reported their second-quarter results as of July 24. Two of the ten companies the StarMine research team picked to either beat or miss estimates are in and the results are mixed. Ford Motor (F.N) handily beat estimates as predicted, but Forest Labs (FRX.N) also beat estimates when we indicated an earnings miss. The other eight companies report earnings over the next six weeks.
Of the 194 companies, 69% beat analysts’ estimates while only 22% announced numbers that fell short of analysts’ expectations. As we do each quarter, on the eve of the second quarter we selected 10 companies that we expect to fall into one camp or the other, based on SmartEstimate and Predicted Surprise data. We have summarized the data and the supporting facts for each company. Historically, our selections have demonstrated an accuracy rate of about 70%, giving investors an edge ahead of earnings announcements.
When the second-quarter earnings season wraps up, we’ll report back on how the other companies fared – and give you a look at what these companies said about their outlook for the coming quarters.
TOP POSITIVE SURPRISE FORECASTS:
1. Pilgrim’s Pride Corp. (PPC.O) is benefiting from rising chicken prices on tight supplies and falling grain prices.
2. Ford Motor Co. (F.N) saw the biggest increase in sales for car companies with over 50K sales. The company reported earnings of 45 cents a share and beat the consensus estimate.
3. Plains All American Pipeline LP (PAA.N) is enjoying the effects of the domestic oil boom and the logistics required to transport the oil.
4. Melco Crown Entertainment (MPEL.O) has continued to see strength in its high end VIP customers and strong traffic to its attractions in Cotai.
5. Madison Square Garden Co. (MSG.O) saw both the Rangers and Knicks reach the playoffs and continues to see strong demand for the venue among entertainers.
TOP NEGATIVE SURPRISE FORECASTS:
1. Carbo Ceramics (CRR.N) suffers from an oversupply of proppant and falling chemical prices.
2. Royal Caribbean Cruises Ltd. (RCL.N) is still affected by the poor publicity from a fire and epidemic on board its ships.
3. Forest Laboratories (FRX.N) may see earnings decline from the loss of Lexapro to a generic. The company reported earnings of 28 cents a share and beat the estimates.
4. Mellanox Technology (MLNX.O) has seen an inventory buildup of its products at the OEM level.
5. Susser Holdings (SUSS.N) is seeing intense competition in the Texas market from bigger retail chains and is seeing increased labor costs.
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