Whisper Numbers Lacking Confidence for Upcoming Earnings

Includes: DELL, DIS, HD, WMT
by: John Scherr

Investor expectations are tame for all but Disney this week as we provide an earnings preview of Disney (NYSE:DIS), Dell (NASDAQ:DELL), Home Depot (NYSE:HD), Wal-Mart (NYSE:WMT)

Home Depot (HD):
The whisper number is $0.48, in-line with the analysts estimates. Home Depot has exceeded the whisper number in 29 of the 43 earnings reports we have data, including the past nine out of ten quarters. But the stock has seen (short term) negative price movement following each of the last two reports. So why are investor expectations not showing confidence in this quarter's earnings? The stock is still recovering from a very negative mid-year slump (-26% between April and July) and investors may be taking baby steps back into the stock. Home Depot reports earnings 11/16.

Wal-Mart (WMT):
The whisper number is 0.91, a penny above the analysts estimates. Wal-Mart has exceeded the whisper number in only 19 of the 37 earnings reports we have data. But over the past four quarters the price reaction has been positive (short term) whether or not the company missed or beat the whisper, and that may be providing investors with some confidence this quarter. The stock has also been on a strong positive run since July. Wal-Mart reports earnings 11/16.

Disney (DIS):
The whisper number is $0.49, three cents ahead of the analysts estimates. Disney has exceeded the whisper number in 26 of the 37 earnings reports we have data. The company has topped the whisper number by an average of 8 cents over the past four quarters, and that helps explain investor's confident expectations for this quarter. Growth of 10% over the past month certainly hasn't hurt either. Disney reports earnings 11/11.

Dell (DELL):
The whisper number is 0.31, a penny below the analysts estimates. Dell has missed the whisper number in 26 of the 43 earnings reports we have data. But has Dell lost its appeal to investors? We're not seeing anything close to the average number of investors submitting expectations for the company, showing investors may be 'bored' with the company. And why not - the stock was at a $14-$15 level a year ago and today it's trading at a $14-$15 level. No growth usually equates to no interest. Dell reports earnings 11/18.

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