Earnings Preview: 2 Retail Companies That Could Surprise

Now, we wait.

Earnings reports from some of the major brokerage firms, the next Fed meeting and options expiration are all more than 10 days away. In contrast, the schedule for the second week of March is pretty light.

We have confirmed reports from just 330 companies. This group includes S&P 500 members American Tower (AMT), Kroger (KR) and Liz Claiborne (LIZ).

The only economic releases likely to have any impact on trading will be the CPI and the University of Michigan's consumer confidence survey, both of which will be published on Friday. Here is a list of the economic data scheduled to be released:

• Monday: January wholesale trade
• Tuesday: January trade balance
• Thursday: February import prices, February retail sales, January business inventories
• Friday: February consumer price index and preliminary March University of Michigan consumer sentiment

The credit markets will continue to play a role in determining the direction of equities. Margin calls, such as what happened to Thornberg (TMA), are difficult to predict. Any such volatility will create buying opportunities in other sectors, however.

Companies That Could Issue Positive Earnings Surprises during the Week of Mar 10 - 14

Last month, Gymboree (GYMB) announced that, as a result, fiscal fourth-quarter same-store sales rose 10% and that earnings would be better than previously announced. The company raised its quarterly profit guidance by a nickel to a range of 93 cents and 95 cents per share. All four covering brokerage analysts adjusted their projections in response, resulting in a consensus earnings estimate of 95 cents per share. GYMB has surpassed expectations for five consecutive quarters. Gymboree is scheduled to report on Wednesday, Mar 12, after the close of trading.

Companies That Could Issue Negative Earnings Surprises during the Week of Mar 10 - 14

Liz Claiborne (LIZ) recently preannounced adjusted fourth-quarter profits of 15 cents to 25 cents per share. The guidance was far below brokerage analysts' expectations for earnings of 64 cents per share. LIZ blamed higher markdowns and an increased level of cancellations from retailers for the poor performance. The consensus earnings estimate now calls for the clothing company to report adjusted profits of 19 cents per share. LIZ has missed three times during the past four quarters. Liz Claiborne is scheduled to report on Friday, Mar 14, before the start of trading.

Charles Rotblut, CFA is the senior market analyst for Zacks.com. He can be reached at [e-mail]