For Immediate Release

Chicago, IL – October 19, 2009 – releases the list of companies likely to issue earnings surprises. This week’s list includes Eastman Chemical (EMN), E.I. DuPont (DD), T. Rowe Price (TROW), Western Digital (WDC) and SuperValu (SVU). To see more earnings analysis, visit

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This Week’s Events

Third-quarter earnings season hits full stride this week with 439 companies confirmed to report. More than of a quarter of these are from the S&P 500 (135 companies).

Housing data will be the highlight on the economic calendar. The existing home sales data will be influenced by the first-time home buyers’ credit. The starts and permits data could be more interesting, especially if they show fear on the part of builders about the subsidy potentially not being renewed.

  • Monday: October NAHB housing index
  • Tuesday: September housing starts and building permits, September Producer Price Index (PPI)
  • Wednesday: Fed Beige Book, weekly crude inventories, weekly mortgage applications
  • Thursday: September Leading Indicators, August FHFA housing price index, Fed balance sheet, weekly initial jobless claims, weekly natural gas inventories
  • Friday: September existing home sales

Fed Chairman Ben Bernanke has 2 speeches scheduled for this week. On Monday, he will talk about Asia and the financial crisis at a conference in Santa Barbara. On Friday, he will talk about the changes to the financial regulations and monetary policy at a Boston Fed conference.

Boston Federal Reserve Bank President Eric Rosengren will give opening remarks to conference attendees on Wednesday. He will speak again on Thursday to discuss whether the Fed should make fiscal stability one of its objectives. New York Federal Reserve Bank President William Dudley will moderate a panel about monetary policy on Thursday. Vice Chairman Donald L. Kohn will be at the conference on Friday, participating in a panel discussion about the international response to the financial crisis.

Philadelphia Federal Reserve Bank President Charles Plosser will discuss monetary policy at the Standford Institute for Economic Policy Research on Tuesday. Governor Daniel Tarullo is scheduled to speak on Wednesday at the Exchequer Club of Washington, D.C.

Attitudes towards earnings news appear to have shifted from celebrating positive surprises to almost demanding perfection. This week should be more telling, given the large number of companies reporting. Keep an eye on revenues, since that appears to be a stumbling block for many. Through Thursday (Oct 15) evening, the ratio of positive-to-negative revenue surprises is just 1.5:1. Conversely, the ratio of positive-to-negative earnings surprises is 6.1:1.

Companies That Could Issue Positive Earnings Surprises

Recent revisions by 3 analysts have pushed the third-quarter Zacks Consensus Estimate higher for Eastman Chemical (EMN). Analysts now expect the company to report profits of $1.13 per share, a 4-cent increase over the average forecast of a month ago. The most accurate estimate is more bullish at $1.15 per share. EMN has topped expectations for 2 consecutive quarters. Eastman Chemical is scheduled to report on Friday, October 23, before the start of trading.

Five analysts have raised their full-year forecasts on E.I. DuPont (DD) in recent weeks, including 3 during the past 7 days. The revisions have pushed the Zacks Consensus Estimate 2 cents higher to 33 cents per share. Though DD has topped expectations twice in the past 4 quarters, this call is not without risk since the chemical company’s Q408 results were 4 cents below projections. DuPont is scheduled to report on Tuesday, Oct 20, after the close of trading.

A continued rise in assets under management (AUM) has analysts optimistic about T. Rowe Price (TROW). The Zacks Consensus Estimate has risen by 2 cents over the past 30 days, reaching 46 cents per share. More than half of the 19 covering analysts have increased their projections. TROW has topped expectations for 2 consecutive quarters, reversing a previous trend of disappointments. T. Rowe Price is scheduled to report on Friday, Oct 23, before the start of trading.

Western Digital (WDC) has topped earnings expectations for 7 consecutive quarters. Ahead of the hard drive maker’s fiscal first-quarter report, about one-third of the covering analysts have raised their profit projections. The revisions have pushed the Zacks Consensus Estimate 6 cents higher to 89 cents per share. The most accurate is far more bullish at 94 cents per share. Western Digital is scheduled to report on Thursday, Oct 22, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

SuperValu (SVU) has missed expectations twice during the last 4 quarters. This past week, 2 analysts lowered their fiscal second-quarter forecasts, causing the Zacks Consensus Estimate to fall by a penny to 36 cents per share. The most accurate estimate is even more bearish at 33 cents per share. SuperValu is scheduled to report on Tuesday, Oct 20, before the start of trading.

Charles Rotblut, CFA, is the senior market analyst for

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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 +26%. 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 underperformed the S&P 500 by 111% annually (-0.8% versus +8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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Contact: Charles Rotblut, CFA
Phone: 312-265-9352


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