US Earnings Preview For Aug 17 - 21

A bunch of the retailers and a smattering of technology names are on tap this week as 110 companies are scheduled to report earnings. Dow components Home Depot (HD) and Hewlett Packard (HPQ) will join 20 other names from the S&P 500 including Target (TGT) and Agilent Technologies, Inc. (A).

The week’s economic data will focus on the housing market and manufacturing surveys before culminating in a speech on Friday by Federal Reserve Chairman Ben Bernanke called “Reflections on the Year of Crisis” at the Kansas City Fed’s annual Jackson Hole conference. It’s scheduled to start at 10 am eastern time.

• Monday: Empire State Manufacturing Survey for August, Housing Market Index from the National Association of Home Builders for August
• Tuesday: ICSC-Goldman Store Sales, Housing starts and permits for July, July Producer Price Index (PPI)
• Wednesday: weekly crude inventories
• Thursday: jobless claims, leading indicators for July, Philadelphia Fed Survey, natural gas inventories
• Friday: Existing home sales for July, Ben Bernanke speech in Kansas City

While the equities markets finished Friday’s session with some weakness, the S&P 500 held above the key psychological marker of 1000. The bullish trend remains intact but earnings season is winding down and many traders are on vacation for the rest of the month.

Trading volume remains light and there will be little news to really move the markets. It’s the type of conditions that could result in equities moving in a narrow trading range until September. But these markets have been anything but “normal” for the past year.

Companies That Could Issue Positive Earnings Surprises

1 out of 12 covering analysts have raised estimates in the past week on the TJX Companies, Inc. (TJX) with 6 also boosting estimates in the past month. TJX raised second quarter forecasts on July 9, after reporting a 4% increase in June same store sales as the discount retailers continue to be beneficiaries of consumers trying to bargain shop.

Projections for fiscal 2010 have also been rising as 10 out of 15 have raised in the past month and 2 were bullish in just the last week. The company has met or beat 3 out of the last 4 quarters. TJX Companies is scheduled to report on Aug 18 before the opening of trading.

Lowe’s Companies Inc. (LOW) has a history of surprising, having beaten 3 out of the last 4 quarters. 2 out of 24 analyst have raised second quarter estimates in the last week.

While this wasn’t enough to move the Zacks Consensus Estimate higher, the most accurate estimate is more bullish by 5.66% which could mean another surprise is in the making. The company is expected to report on Aug 17 before the opening of trading.

Companies That Could Issue Negative Earnings Surprises

Keep an eye on Gamestop Corp. (GME), the video game retailer. According to market researcher NPD Group, video game sales fell a worse than expected 29% in July, the fifth month in a row of falling sales in an industry that was thought to be insulated from the effects of an economic slowdown.

3 out of 14 analysts have lowered estimates in the last 30 days with the Zacks Consensus Estimate falling by a penny. This is more bullish than the most accurate estimate which calls for a downside potential of 6.67% compared to the Zacks Consensus Estimate.

The full year Zacks Consensus Estimate is also trending lower, with 3 out of 15 analysts lowering in the past 30 days.

Gamestop is expected to report on Aug 20 before the opening of trading.

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