5 Stocks To Watch This Week: DRI, ORCL, FDX, RAD, BBRY
Estimize | Dec 16, 2014 05:57AM ET
h3 Tuesday - Darden Restaurants/h3
Darden Restaurants (NYSE:DRI) which owns several casual dining chains including its crown jewel Olive Garden, is set to report 3rd quarter earnings on Tuesday, December 16 before the opening bell.
Promotional deals including Olive Garden’s eyebrow raising 30 day unlimited pasta pass are expected to drive sales higher this quarter. Favorable conditions for the consumer including strong jobs numbers and cheap gasoline may both spur demand. Contributing analysts on Estimize are looking for Darden to report revenue of $1.548 billion, coming up just shy against the Wall Street consensus.
Sales at Darden are expected to drop roughly 24% this quarter compared to the same period of last year due to the firm selling of Red Lobster in July. Activist investment fund Starboard Value adamantly opposed disposing of Red Lobster and in November won all 12 seats on Darden’s board of directors. Starboard has been critical of Red Lobster’s cavalier spending and will look to pump profitability by giving away fewer breadsticks and elevating a focus on alcohol sales.
The Estimize community expects Darden’s earnings to miss the Wall Street consensus by 1 cent per share quarter, improving compared to FQ3 2013, but coming in flat against the same period of 2012.
h3 Wednesday - Oracle/h3Last quarter Oracle’s (NYSE:ORCL) long serving frontman Larry Ellison stepped down from his role as CEO and appointed 2 co-CEO successors. Heading into Oracle’s first quarter in the post-Ellison era Estimize community members are expecting the technology company to continue growing steadily and slightly outperform Wall Street’s earnings expectations.
On Wednesday Estimize contributors are looking for a 1 cent gain in earnings per share while year over year revenue rises 3%. These results would maintain Oracle’s rate of sales expansion over the past 5 quarters and represent a slowing of profit growth to a rate between 1% and 2%.
h3 Wednesday - FedEx/h3
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At one point this summer crude oil was trading at over $100 per barrel. As we enter the final stretch of the year that price has collapsed to just $56. As a major player in logistics FedEx’s (NYSE:FDX) financial performance is greatly impacted by the price of oil, falling gas prices throughout the fall could provide FedEx an opportunity to post gains to its bottom line.
Over the past 3 months EPS estimates and revenue projections from both Estimize and Wall Street have been rising. With the final picture clearing up the Estimize community’s EPS forecast is settling at $2.16 per share, 2 cents lower than the Wall Street consensus, but still an impressive 38% higher than the number FedEx reported in the same quarter of last year.
On the top line Estimize analysts are calling for $11.99 billion which is marginally higher than Wall Street’s prediction and would mark a 5% improvement from last year’s total.
h3 Thursday - Rite Aid/h3Pharmacy giant Rite Aid (NYSE:RAD) is slated for a Thursday morning report. Recently the company released its comparable November sales result and saw revenue rise 5.1%, beating expectations of 4.1% according to Investors Business Daily. Rite Aid was in the news this quarter for jilting Apple Pay (Apple Inc (NASDAQ:AAPL)); The pharmacy chain is reportedly working on its own mobile payment system.
In September, Rite Aid reported earnings of 13 cents per share, topping the Estimize consensus of 8 cents and thoroughly smashing the Street’s view of 6 cents. Despite the strong quarterly performance, the stock sold off 18% as management lowered its guidance for 2015 citing a lower anticipated reimbursement rate and concerns about the profitability of generic drugs.
Thursday Estimize contributors are looking for 7 cents per share which would be 3 cents per share higher than the company’s total in the same quarter of last year. Sales are projected to rise $224 million (3.5%) to $6.58 billion.
h3 Friday - BlackBerry/h3Friday morning offers a peek at the state of the turnaround attempt over at BlackBerry (NASDAQ:BBRY). Over the past 2 quarters CEO John Chen appears to have slowed the bleeding, the quarterly loss has shown signs of shrinking. On the other hand, sales have not been improving either.
Since John Chen took over the CEO role at BlackBerry last year his mission has primarily been to focus on cutting costs and meeting the security needs of enterprise customers. At the very end of the third quarter BlackBerry released its latest handset, the PassPort. Chen commented in October that sales for the business focused smartphone were exceeding expectations, which is a positive for the company even if we may have to wait for BlackBerry’s 4th quarter results to see the impact.
Estimize contributors are expecting BlackBerry to cut its third quarter loss from 67 cents per share last year to just 3 cents in 2014. Revenue this quarter, which will include very little if any PassPort sales, is projected to land 17% lower than it did last year. To get a sense for how quickly BlackBerry’s revenue is disappearing, third quarter revenue is forecast to come in at just 36% of what it was in calendar 2012.
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