Earnings Preview: Two Companies That Could Surprise

By Charles Rotblut

With just 51 companies scheduled to report, economic news will be at the forefront. The only S&P 500 members on the earnings calendar are Brown Foreman (BF.B) and Ciena (CIEN)

The economic calendar is pretty packed with the August ISM surveys, August employment data and minutes from the last Fed meeting all scheduled to be released. Adding to the potential volatility will be light volume, particularly on Friday afternoon as many traders leave early for the holiday.

• Monday: August Chicago PMI
• Tuesday: August ISM manufacturing index, August auto sales, July construction spending, July pending home sales
• Wednesday: August ADP employment survey, August Fed minutes, July factory orders, revised Q2 productivity, weekly crude inventories, weekly mortgage applications
• Thursday: August ISM services index, weekly initial jobless claims, weekly natural gas inventories
• Friday: August unemployment rate and nonfarm payrolls

No Fed officials are scheduled to speak.

The U.S. financial markets will be closed on Monday, Sep 7 in observance of Labor Day.

Volume is likely to stay light throughout the week and get even lighter on Friday afternoon. Overall, the bullish trend is continuing, though given the Dow's recent winning streak, some profit-taking is likely to occur. Nonetheless, the fast money remains in charge.

Companies That Could Issue Positive Earnings Surprises

ADC Telecom (ADCT) recently raised its third-quarter guidance. The company now anticipates that non-GAAP profits totaled between 11 and 16 cents per share. Positive revisions by 8 covering analysts pushed the Zacks Consensus Estimate 5 cents higher to 13 cents per share. The most accurate estimate is a penny higher at 14 cents per share. ADCT has beat twice and matched expectations twice during the past 4 quarters. ADC Telecom is scheduled to report on Tuesday, Sep 1, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Zale Corporation (ZLC) has disappointed investors for 3 consecutive quarters with earnings missing expectations by an average margin of 39 cents share. Ahead of the company's fiscal fourth-quarter report, nearly all of the covering analysts have lowered their projections. The Zacks Consensus calls for a loss of 77 cents per share, 5 cents worse than the average forecast of a month ago. The most accurate estimate is more bearish at 87 cents per share. Zale is scheduled to report on Wednesday, Sep 2, before the start of trading.