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Springing Into Earnings
Next week, aluminum producer Alcoa (NYSE:AA) will kick off what is bound to be an action-packed Q2 earnings season. A handful of additional big name companies will also be weighing in with their results as the week winds down. Expectations are up from a year ago, but the path ahead will be anything but smooth. Here is what investors can expect from some of the heavy-hitters reporting in the coming days.
TUTORIAL: Investing 101
On the Up and Up
Alcoa has quietly beat analyst expectations in each of its last four quarters, and the company's stock price has risen 3% year-to-date. The consensus on Wall Street is that the company will announce Q2 EPS of 35 cents versus 13 cents in the prior year quarter. Total revenue is projected to rise by 21.8% over the same time frame.
Alcoa went through a rough patch when the commodity price bubble burst a few years ago, but it is now getting its mojo back. In Q1, the company experienced record profits from its midstream and downstream businesses and benefited from strong demand from the automotive sector. As long as pricing continues to remain in Alcoa's favor, the company is setting up for a strong second-half of the year.
Analysts are also expecting a robust quarter out of the construction supplies company Fastenal (Nasdaq:FAST) when it reports its quarterly results before the market open on Tuesday. The consensus estimate is that the company will report a 25.% improvement in EPS on a 20.6% pop in total revenue when compared to the year-ago quarter. FAST shares have spiked 20.6% so far this year. (Wall Street analysts' consensus earnings estimates are used by the market to judge stock performance. For more, see Earnings Forecasts: A Primer.)
Straight to the Banks
On the financial front, JPMorgan Chase & Co. (NYSE:JPM) is slated to announce its Q2 numbers before the market open next Thursday. Analysts are expecting total revenue to tick down slightly, but EPS should be up by 11.9% over the company's Q2 in 2010.
JPMorgan has been battling higher credit costs, but turned in a solid Q1 as its investment banking operations continued to lead the way. The company has benefited from record debt underwriting fees and healthy year-over-year gains from its advisory work. Shares of JPM are down 6.9% year-to-date.
One other bank for investors to keep an eye on heading into next week is Citigroup (NYSE:C). Although total revenue is expected to fall by 9.3% from the prior year quarter, analysts are calling for a 7.8% increase in EPS when the company reports at the end of the week. Investors could use some good news as this stock has declined 14.3% on the year.
The Bottom Line
All in all, the earnings releases that will be coming next week should be favorable for shareholders. The financials are still struggling to break through, but Alcoa and Fastenal appear to be on the right track. Each of these companies may leave something to be desired, but they are in a better place than they were a year ago and leaps and bounds above where they were two years ago. (For related reading, see The Evolution Of Banking.)
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TUTORIAL: Investing 101
On the Up and Up
Alcoa has quietly beat analyst expectations in each of its last four quarters, and the company's stock price has risen 3% year-to-date. The consensus on Wall Street is that the company will announce Q2 EPS of 35 cents versus 13 cents in the prior year quarter. Total revenue is projected to rise by 21.8% over the same time frame.
Alcoa went through a rough patch when the commodity price bubble burst a few years ago, but it is now getting its mojo back. In Q1, the company experienced record profits from its midstream and downstream businesses and benefited from strong demand from the automotive sector. As long as pricing continues to remain in Alcoa's favor, the company is setting up for a strong second-half of the year.
Analysts are also expecting a robust quarter out of the construction supplies company Fastenal (Nasdaq:FAST) when it reports its quarterly results before the market open on Tuesday. The consensus estimate is that the company will report a 25.% improvement in EPS on a 20.6% pop in total revenue when compared to the year-ago quarter. FAST shares have spiked 20.6% so far this year. (Wall Street analysts' consensus earnings estimates are used by the market to judge stock performance. For more, see Earnings Forecasts: A Primer.)
On the financial front, JPMorgan Chase & Co. (NYSE:JPM) is slated to announce its Q2 numbers before the market open next Thursday. Analysts are expecting total revenue to tick down slightly, but EPS should be up by 11.9% over the company's Q2 in 2010.
JPMorgan has been battling higher credit costs, but turned in a solid Q1 as its investment banking operations continued to lead the way. The company has benefited from record debt underwriting fees and healthy year-over-year gains from its advisory work. Shares of JPM are down 6.9% year-to-date.
One other bank for investors to keep an eye on heading into next week is Citigroup (NYSE:C). Although total revenue is expected to fall by 9.3% from the prior year quarter, analysts are calling for a 7.8% increase in EPS when the company reports at the end of the week. Investors could use some good news as this stock has declined 14.3% on the year.
The Bottom Line
All in all, the earnings releases that will be coming next week should be favorable for shareholders. The financials are still struggling to break through, but Alcoa and Fastenal appear to be on the right track. Each of these companies may leave something to be desired, but they are in a better place than they were a year ago and leaps and bounds above where they were two years ago. (For related reading, see The Evolution Of Banking.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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