Earnings Preview: BBY, LOW, COST, DELL

Published on Sunday, 20 May 2012 21:59 Written by Todd Shriber

The summer doldrums aren’t quite here yet and it’s become more apparent with each passing day that global equity markets will be held hostage to data points and macroeconomic headwinds. Said differently, as earnings season winds down, it’s going to take something truly special (or something quite terrible) to really move individual stocks that will step into the earnings confessional this week. Still, there are a few marquee names investors might want to keep an eye on.

Best Buy (NYSE: BBY):

Shares of the electronics retailer are down 42% in the past year and 22% year-to-date. The stock’s recent declines indicate investors aren’t expecting to be anything but disappointed when Best Buy reports on Tuesday. Analysts are expecting a profit of 58 cents on revenue of $50.2 billion. The EPS has come up in recent months, but it’s going to take some bullish guidance to get investors excited about this stock.

Lowe's (NYSE: LOW):

Rival Home Depot (NYSE: HD) has been one of the best-performing stocks in the Dow Jones Industrial Average this year and Home Depot’s recent earnings report was solid to say the least. Lowe’s is expected to report EPS of 42 cents, up from 34 cents a year earlier. The estimate was 39 cents two months ago.

Costco (NASDAQ: COST):

The warehouse-retailing giant to say Thursday its third-quarter EPS rose 16.1% year over year to $0.87 and that revenue came to $22.1 billion. In addition to Best Buy, Lowe’s and Costco, the earnings calendar is chock full of earnings updates from retailers of all stripes this week as American Eagle (NYSE: AEO), Autozone (NYSE: AZO), Big Lots (NYSE: BIG), Collective Brands (NYSE: PSS), Express (NASDAQ: EXPR) and Tiffany (NYSE: TIF), among others, all give profit updates.

Dell (NASDAQ: DELL):

Another fallen tech darling, Dell’s best days in terms of share performance are arguably behind it. The company is expected to post 46 cents per share on $14.9 billion in sales, down from 55 cents a share and $15 billion last year. Rival and Dow component Hewlett-Packard (NYSE: HPQ) is also expected to report a drop in profits to 91 cents from $29.9 billion from $1.24 and $31.6 billion a year ago. It is also widely expected HP will announce significant layoffs on Wednesday in an effort to pare costs.

Ralph Lauren (NYSE: RL):

The high-end retailer reports on Tuesday and is expected to post a profit of 83 cents on sales of $1.6 billion. If the sales meet expectations, that would be a 12% increase. A year earlier, Ralph Lauren earned 74 cents a share. The key takeaway from this report will be how much the European economic slowdown is hurting Ralph Lauren’s top and bottom lines. Developed Europe represents key markets for this company.