It’s not a perfect world out there for investors, but things may be starting to get better.
Last week’s run to a new Dow Jones Industrial Average high and the encouraging drop of the unemployment rate to its lowest level in more than four years are welcome signs.
I recently went over some of the companies that are expected to post lower quarterly profits when they report this week. Thankfully, they’re the exceptions and not the rule.
Let’s go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.
|Company||Latest Quarter EPS (Estimated)||Year-Ago Quarter EPS|
|Rentech Nitrogen (NYSE:RNF)||$0.55||$0.30|
|Ross Stores (NASDAQ:ROST)||$1.07||$0.85|
|KB Home (NYSE:KBH)||($0.22)||($0.59)|
Clearing the table
Let’s start at the top with Rentech Nitrogen Partners.
Shares of the Rentech took a hit last month after Dahlman Rose’s agriculture stock analyst downgraded some of the market’s fertilizer stocks. He wasn’t the only one souring on the limited partnership. Wall Street has been trimming its expectations on the company in recent months.
Three months ago, the pros figured that Rentech would earn $0.86 per unit for the quarter. Two months ago, those same analysts were hovering around $0.66 a unit, and last week it was $0.58 a unit. The good news for investors in the high-yielding Rentech is that the current target of $0.55 per unit is still well ahead of the $0.30 a unit it posted a year earlier.
Oracle Corporation (NASDAQ:ORCL) is the leading enterprise software company.
CEO Larry Ellison is brash, charismatic, and a serial acquirer. He doesn’t have a problem insulting his rivals and buying them out if it’s strategically necessary.
Wall Street sees Oracle chiming in with quarterly net income of $0.66 a share. This would be modest improvement over the $0.62 a share it rang up during the same quarter a year earlier. Investors shouldn’t be surprised if Ellison finds a way to earn more than the $0.66 a share that the pros are forecasting. Oracle Corporation (NASDAQ:ORCL) has found a way to beat Wall Street estimates in 11 of the past 13 quarters.
Ross Stores, Inc. (NASDAQ:ROST) runs the popular namesake department store chains that prides itself on selling brand names for less. Everyone loves a good bargain, and the discounter’s 1,091 stores had a good holiday run. Ross Stores actually boosted its fiscal fourth-quarter guidance twice, and its latest update was calling for a profit per share of $1.06 to $1.07 on a 5% uptick comparable store sales.
Investors eyeing the pop from $0.85 a share during the prior year’s holiday quarter to $1.07 a share this time around need to keep in mind that there was an extra week in the mix this time around. The additional week accounts for nearly half — or $0.10 a share — of the projected earnings growth.
Ross Stores, Inc. (NASDAQ:ROST) also may be hitting some resistance here. Earlier this month, it revealed that comps actually turned slightly negative for the month of February. Investors will want an update on how the current quarter is trending, but the holiday quarter itself should be solid in Thursday’s report.