Analysts are expecting a drop in profit for Macy's (NYSE:M) when it reports its results for the third quarter on Wednesday, November 7, 2012. The company reported profit of 32 cents a year ago, but the current consensus estimate anticipates earnings per share of 28 cents.

In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: How To Decode A Company's Earnings Reports

What to Expect: Macy's is expected to report earnings of 28 cents per share, down 12.5% from a year ago, when the company reported earnings of 32 cents per share.

The consensus estimate has risen over the past month, from 27 cents, but it is the same as it was 90 days ago. For the fiscal year, analysts are projecting earnings of $3.38 per share.

Macy's is expected to beat last year's reported revenue of $5.85 billion and come in at $6.05 billion for the quarter. For the fiscal year, expected revenue is $27.7 billion.

Company Performance: Revenue for Macy's has been on the rise for four consecutive quarters on a year-over-year basis. It rose 3% in the second quarter, 4.3% in the first quarter, 5.5% in the fourth quarter of the last fiscal year and 4.1% in the third quarter of the last fiscal year.

M's P/E ratio is 12.0. Price/earnings ratios (P/E ratios) provide a measure of the relative value of a stock. High P/E stocks could be "growth" stocks, while low PE stocks may be "value" stocks. SEE: The P/E Ratio: A Good Market-Timing Indicator

Over the past quarter, the stock price has risen to $40.52 from $36.84 on August 6, 2012.

The Competition: Macy's is a retailer that sells apparel and accessories, cosmetics, home furnishings and other consumer goods. Most analysts (10 of 14) rate Macy's a buy. This rating hasn't changed in three months.

The company's closest competitor in the retail (department and discount) industry is Wal-Mart (WMT). Analysts are more optimistic about Macy's than about Wal-Mart. Only 11 out of 21 analysts rate the latter a buy.

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Tickers in this Article: M

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