# 10 Companies That Missed Earnings Expectations

BOSTON (

) -- Earnings season has been a success so far, with 76% of

**S&P 500**

companies exceeding analysts' earnings estimates. But not all companies beat consensus. Here are the 10 companies that fell short by the widest margins. The earnings per share tallies represent diluted earnings from continuing operations, excluding extraordinary items.

10.

**Zions Bancorporation**

(**ZION**) - Get Report

swung to a loss of 84 cents a share, missing analysts' expectation by 62%. The net loss widened to $113 million from a loss of $51 million a year earlier. Revenue declined 5.5% to $693 million. The operating margin remained in negative territory. Zions has $6 billion of cash and $3.1 billion of debt, equaling a debt-to-equity ratio of 0.5. Its stock has advanced 7% in the past year. It trades at a forward earnings multiple of 34, a 137% premium to the industry average. Its book value multiple of 0.5 and cash flow multiple of 2.3 reflect discounts of 57% and 58% to peer averages. Roughly 22% of analysts covering Zions rate its stock "buy."

9.

**Genzyme**

( GENZ) is a biotechnology company. It posted quarterly adjusted profit of 18 cents, missing the consensus by 63%. Genzyme swung to a GAAP net loss of $3.8 million, or 1 cent per share, from a profit of $188 million, or 68 cents, a year earlier. Revenue declined 12% to $1.1 billion. The operating margin shrank from 22% to 5%. Genzyme has $835 million of cash and $1.1 billion of debt, converting to a quick ratio of 1.4 and a debt-to-equity ratio of 0.2. Its stock has gained 25% in the past 12 months, beating indices. It sells for a forward earnings multiple of 18, on par with biotech peers. Around 24% of analysts covering Genzyme rate its stock "buy."

8.

**Snap-On**

(**SNA**) - Get Report

makes hand and power tools. Second-quarter profit increased 21% to $45 million, or 78 cents a share, missing researchers target by 65%. Revenue expanded 7.5% to $662 million. The operating margin remained steady at 13%. Snap-On has $431 million of cash and $923 million of debt, translating to a quick ratio of 1.6 and a debt-to-equity ratio of 0.7. The company's stock trades at a forward earnings multiple of 11 and a book value multiple of 1.9, 36% and 39% discounts to machinery industry averages. Of analysts following Snap-On, four, or 80%, rate its stock "buy" and one rates it "hold." A median target of $56.83 suggests a return of 41%.

7.

**Anadarko Petroleum**

(**APC**) - Get Report

explores for and produces oil and gas. Its adjusted quarterly profit of 10 cents a share missed the consensus expectation by 73%. Anadarko's GAAP loss narrowed 82% to $40 million, or 8 cents a share, as revenue grew 35%. The operating margin climbed from negatives to 13%. Anadarko has $3.4 billion of cash and $12 billion of debt, equaling a quick ratio of 1.2 and a debt-to-equity ratio of 0.6. The stock sells for a book value multiple of 1.2 and a cash flow multiple of 4.9, 64% and 30% discounts to peer averages. Roughly 59% of analysts rate Anadarko's stock "buy." A median target of $72.50 implies 48% of upside potential.

6.

**Sears Holdings**

(**SHLD**)

owns the Sears and Kmart retail chains. Its second-quarter adjusted loss of 32 cents missed the expectation for a loss of 18 cents. The GAAP loss narrowed to $39 million, or 35 cents a share, from a loss of $94 million, or 79 cents, a year earlier. Revenue declined marginally to $10 billion. The operating margin remained in shallow negative territory. The stock trades at a forward earnings multiple of 26, a 60% premium to the industry average. Its book value multiple of 0.8 and sales multiple of 0.2 represent discounts of 67% and 76%. None of the analysts following Sears recommend buying its shares. Roughly 38% advise holding.

5.

**MEMC Electronic Materials**

(**WFR**)

makes silicon wafers for semiconductors and solar panels. Its second-quarter adjusted profit of two cents missed the consensus expectation of nine cents. GAAP net income increased to $14 million, or 6 cents a share, from $1.4 million, or 1 cent, a year earlier. Revenue surged 58% to $737 million. The operating margin remained negative. MEMC's stock sells for a forward earnings multiple of 11 and a book value multiple of 1.1, 13% and 79% discounts to industry averages. Of researchers covering MEMC, 10, or 38%, rate its stock "buy", 10 rate it "hold" and six rate it "sell." A median target of $13.47 suggests a return of 29%.

4.

**Vulcan Materials**

(**VMC**) - Get Report

sells construction materials, including sand, crushed stone, concrete and asphalt. Second-quarter adjusted earnings per share of 2 cents missed the expectation of 25 cents. Vulcan swung to a GAAP loss of $24 million, or 18 cents a share, from a profit of $22 million, or 14 cents, a year earlier. Revenue inched up 2% to $736 million. The operating margin tightened from 9.2% to 5.9%. Vulcan has $50 million of cash and $2.7 billion of debt, converting to a quick ratio of 0.4 and a debt-to-equity ratio of 0.7. Vulcan's stock trades at a sales multiple of 1.9 and a cash flow multiple of 16, premiums to peer averages. Around 22% of analysts rate it "buy."

3.

**Coventry Health Care**

( CVH) is a managed health care company. Second-quarter adjusted profit of one cent missed analysts' consensus forecast of 66 cents. GAAP net income plummeted 94% to $1 million as revenue decreased 18% to $2.9 billion. The operating margin climbed from 2.9% to 9.9%. Coventry holds $1.5 billion of cash and $1.6 billion of debt, translating to a quick ratio of 1 and a debt-to-equity ratio of 0.4. Coventry's stock sells for a forward earnings multiple of 7.9 and a book value multiple of 0.8, 38% and 69% discounts to industry averages. Roughly 32% of analysts covering the stock rate it "buy." A median target of $25.64 implies 28% of potential growth.

2.

**Nvidia**

(**NVDA**) - Get Report

designs chips for computers, game consoles and mobile devices. Its second-quarter adjusted loss of 25 cents fell short of analysts' consensus estimate of an 11 cent profit. The net loss widened 34% to $141 million from a loss of $105 million a year earlier. Revenue advanced 4.5% to $811 million. The operating margin fell into negative territory. Nvidia has $1.8 billion of cash and $24 million of debt, equaling a quick ratio of 2.7. Nvidia's stock trades at a forward earnings multiple of 15, a 25% premium to its peer average. But it's cheap based on book value and sales. Roughly 32% of researchers following Nvidia advise purchasing its shares.

1.

**Massey Energy**

( MEE) processes and sells coal. Its second-quarter adjusted loss of two cents missed researchers' consensus target for a profit of 30 cents. Massey swung to a GAAP net loss of $89 million, or 88 cents a share, from a profit of $20 million, or 24 cents, a year earlier. Revenue expanded 14% to $793 million. The operating margin narrowed from 6.9% to 2.8%. Massey has $496 million of cash and $1.3 billion of debt, translating to a quick ratio of 1.3 and a debt-to-equity ratio of 0.7. Massey's stock sells for a forward earnings multiple of 8.1 and a book value multiple of 1.7, 39% and 49% discounts to industry averages. Around 48% of analysts rate it "buy."

*-- Reported by Jake Lynch in Boston.*

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