For Immediate Release

 

Chicago, IL – April 26, 2010 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Broadcom(BRCM), Rockwell Automation (ROK), United Parcel Service (UPS), A.M. Castle (CAS) and Kellogg (K). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

 

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Lots of Earnings, Plus GDP

 

Earnings season will be in full gear next week as more than 900 firms report, including 167, or more than a third of the firms in the S&P 500. The list of companies reporting reads like a who’s who list of U.S industry.

 

The economic data calendar will be light early in the week potentially market moving at the end of the week. We start out the week with the Consumer Confidence on Tuesday. The only numbers coming out on Wednesday are the crude inventory numbers, but we also have a Fed meeting. Thursday will only have the regular weekly data on jobless claims.

 

Friday things get interesting with the release of the first cut on the GDP for the first quarter, along with the other numbers in the same release, like the chain deflator, an imbedded measure of inflation and the Employment Cost Index. We also get the Chicago PMI and the University of Michigan Consumer Sentiment numbers.

 

Historically, the best indicators of firms likely to report positive surprises are a recent history of positive surprises and rising estimates going into the report. The Zacks Rank is also a good indicator of potential surprises. While normally firms that report better-than-expected earnings rise in reaction, that has not been the case so far this quarter. While pickings are getting slim, some of the companies that have these characteristics include:

 

Broadcom (BRCM) is expected to report EPS of $0.30, up from a loss of $0.17 per share a year ago. Last time out, BRCM posted a positive surprise of 82.6% and over the last month the mean estimate for its first quarter earnings is up 0.36%. BRCM has a Zacks #1 Rank.

 

Rockwell Automation (ROK) is expected to post EPS of $0.51, up from $0.27 a year ago. Last time, ROK beat expectations by 54.3%, and over the last month analysts have shaved their estimates for the about to be reported quarter by 3.05%. ROK is also a Zacks #1 Ranked stock.

 

United Parcel Service (UPS) is expected to post EPS of $0.69, up from $0.54 a year ago. Last time out, the company beat expectations by 21.5%. Over the last month, estimates for the quarter are up 21.5%. UPS is a Zacks #1 Ranked stock.

 

A.M. Castle (CAS) is expected to post a loss of $0.12 a share, versus EPS of $0.02 a year ago. Last time they reported 148.0% below expectations. For this Zacks #5 Ranked stock, analysts have cut the estimates for this quarter over the last month by 3.11%.

 

Kellogg (K) is expected to earn $0.94 a share this quarter, up from of $0.84 a year ago. They were 4.1% below expectations last time out. Analysts have cut the estimate for this quarter by 1.3% over the last month. The stock holds a Zacks #4 Rank.


Dirk Van Dijk, CFA, is the Chief Equity Strategist for Zacks.com.

 

About the Zacks Rank

 

Since 1988, the Zacks Rank has proven that “Earnings estimate revisions are the most powerful force impacting stock prices.” Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have significantly underperformed the S&P 500 (+2% versus +9%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

 

 

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Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com

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