Zacks Earnings Preview: Deckers Outdoor, JetBlue Airways, Timken and Affymetrix

Zacks.com releases the list of companies likely to issue earnings surprises. This weeks list includes Deckers Outdoor (Nasdaq: DECK), JetBlue Airways (Nasdaq: JBLU), Timken (NYSE: TKR) and Affymetrix (Nasdaq: AFFX). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Earnings Preview is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

The Week's Events

Will earnings season finally become the focus of traders? We're about to find out.

Nearly 140 S&P 500 members are scheduled to report. Included within this group are several Dow components including Microsoft (Nasdaq: MSFT).

There will be very little economic data released. Given the concerns about a worsening recession, this could be a positive.

  • Monday: September Leading Indicators
  • Wednesday: Weekly crude inventories
  • Thursday: Weekly initial jobless claims
  • Friday: September existing home sales

Fed Chairman Ben Bernanke will testify before the House budget committee on Monday morning. He will discuss the economy and the financial markets.

Fed Governor Randall Kroszner will discuss risk at a conference in Baltimore on Monday afternoon.

As has been the case for the past several weeks, the credit crunch, the economy, central banks and trader sentiment all remain wildcards. Nonetheless, the major indexes are overdue for a short-term rebound. Whether we'll see this happen over the next 5 days is a questionable, but I do think we are either at or near a short-term bottom.

Companies That Could Issue Positive Earnings Surprises

Deckers Outdoor (Nasdaq: DECK) raised its third-quarter sales guidance last week, helped by robust demand for its UGG shoes. The company now sees revenue of about $195 million, a rise of 51% over 2007 levels, up from its prior view of a 34% increase. Though DECK did not provide a new profit target, the majority of the covering analysts raised their forecasts. The consensus earnings forecast now calls for profits of $1.79, versus the previous forecast of $1.68 per share. DECK has topped expectations for 13 consecutive quarters. Deckers Outdoor is scheduled to report on Thursday, Oct 23, after close of trading.

JetBlue Airways (Nasdaq: JBLU) saw preliminary passenger revenue per available seat miles rise by 28% in September. Lower oil prices of late have also acted in favor of the company, which has topped consensus estimates in all of the last 4 quarters. Analysts have thus become more bullish on JBLU and expect the company to post a narrower loss in the third quarter. The consensus estimates now stands at a loss of 5 cents per share compared with a projected loss of 9 cents a month ago. JetBlue is scheduled to report earnings on Thursday, Oct 23, before the start of trading.

Timken (NYSE: TKR) boosted its third-quarter guidance to a range of $1 to $1.10 per share, helped by strong overseas demand, capacity expansion and lower scrap prices. The new outlook is significantly above the companys prior view of 65 cents to 75 cents per share. Analysts now expect the companys quarterly profit to reach $1.07 per share. Timken is scheduled to report quarterly earnings on Friday, Oct 24, before the start of trading.

Companies That Could Issue Negative Earnings Surprises

Affymetrix (Nasdaq: AFFX) forecast third-quarter sales below brokerage analysts expectations, citing increased competition for academic research funding and a fall in industrial spending. The company, which has missed forecasts twice during the last 4 quarters, guided to sales of $75 million. Analysts now see a quarterly loss of 6 cents a share, wider than the loss of 1 cent they had forecast a week ago. Affymetrix is scheduled to report results on Thursday, Oct 23, after close of trading.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com.

Want to turn earnings surprises into quick profits? Learn how by visiting http://at.zacks.com/?id=3206.

About the Zacks Rank

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 +30%. 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 81% annually (+2% versus +11%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

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Contacts:

Zacks.com
Charles Rotblut, CFA
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

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