Earnings Preview For The Week Of Nov 17 - 21

Companies that could issue positive surprises include Hot Topic (HOTT) and Raven Industries (RAVN). AnnTaylor Stores Corp (ANN) could potentially disappoint investors.

The Week’s Events

This will be the last big week for third-quarter earnings. Dow component Home Depot (HD) will be joined by fellow S&P 500 members Dell (DELL), Lowe’s (LOW) and Target Corporation (TGT).

We have confirmed reports from 91 companies. Retailers account for nearly half of this list.

Housing and inflation data are on the economic calendar. Minutes from the late-October Fed meeting will be released on Wednesday afternoon.

• Monday: October industrial production and capacity utilization, November Empire State manufacturing index
• Tuesday: October Producer Price Index (PPI), September net foreign purchases
• Wednesday: October Consumer Price Index (CPI), October building permits and housing starts, minutes from the October Fed meeting, weekly crude inventories
• Thursday: October Leading Indicators, Philadelphia Fed survey, weekly initial jobless claims

Vice Chairman Donald Kohn will speak on Wednesday about monetary policy at a conference in Washington, D.C.

November options will expire on Friday. This could add to the intraday volatility, but probably not enough to be noticeable. Unfortunately, there is nothing on the calendar that would reduce the level of volatility.

Action by Congress on the financial and proposed automaker bailouts could have an impact on market direction. The other wildcard out of Washington is who President-Elect Obama chooses as a nominee for Treasury Secretary.

Companies That Could Issue Positive Earnings Surprises

Hot Topic (HOTT) said last week that October comparable-store sales rose 8.3%. The teen clothing retailer also raised its guidance for the third quarter to between 16 cents and 17 cents per share. (Previously, HOTT had forecast profits of 12 cents to 15 cents.) Nearly all of the covering brokerage analysts raised their forecasts in response, pushing the consensus earnings estimate 3 cents higher to 17 cents per share. The company has topped expectations twice during the past 4 quarters. Hot Topic is scheduled to report earnings on Wednesday, Nov 19, after the close of trading.

During the past 30 days, the third-quarter consensus earnings estimate for Raven Industries (RAVN) has been raised by 2 cents. The average forecast now calls for per share profits of 43 cents. RAVN has topped market forecasts in 3 out of the last 4 quarters. Raven Industries is scheduled to report earnings on Thursday, Nov 20, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

AnnTaylor Stores Corp (ANN) recently warned that per share profits would only be breakeven for the third quarter. The company blamed a 19% drop in same-store sales for the warnings. Brokerage analysts, who had been projecting profits of 50 cents per share, slashed their forecasts to 7 cents. The most accurate estimate is more bearish at 1 cent. ANN has missed once during the past 3 quarters. AnnTaylor is scheduled to report earnings on Friday, Nov 21, before the start of trading.

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