Earnings Reports to Watch Next Week

NEW YORK (TheStreet) -- The bulk of next week's earnings will focus on a few companies trading over two million shares a day. Technology, services and capital goods are in the lineup.

Reporting Before the Open

 Kroger (KR)

About the company: Kroger is one of the larger grocery retailers in the United States and is headquartered in Cincinnati. Kroger trades an average of 4.9 million shares per day with a market cap of $12.2 Billion.

Kroger is anticipated to report moderate first-quarter earnings growth on June 14. The consensus estimate is currently 72 cents a share, an improvement of 2 cents from 70 cents during the same period last year.

The trailing 12-month price-to-earnings ratio is 11.3, and the forward estimate is 9.43, based on estimated earnings of $2.32 a share this year.

Revenue year-over-year has increased to $82.19 billion in the last fiscal year compared to $76.73 billion in the previous year. The bottom line has rising earnings year-over-year of $1.12 billion last fiscal year compared to $70 million in the previous year.

The Kroger chart is technically in a bear market and unsurprising given the current industry competitive landscape. Wal-Mart continues to make progress encroaching into this space and an improvement in earnings should be considered a victory.

Industry Comparisons:

Whole Foods (WFM)
Wal-Mart (WMT)
Supervalu (SVU)

Unlike Supervalu, Kroger doesn't have a large short interest to slingshot the stock price higher if it beats expectations. However, the price has fallen far enough to become priced with a single-digit earnings multiple. A beat with good guidance can move the stock back into a double digit price-to-earnings multiple.

 Pier 1 Imports (PIR)

About the company: Pier 1 Imports consists of a chain of retail stores operating under the names Pier 1 Imports and The Pier and trades an average of 2.1 million shares per day with a market cap of $1.7 billion.

Pier 1 is anticipated to report strong first-quarter earnings on June 14. The consensus estimate is currently 16 cents a share, an improvement of 4 cents (25%) from 12 cents during the same period last year.

The trailing 12-month price-to-earnings ratio is 16.2 and the mean fiscal-year estimate price-to-earnings ratio is 13.95, based on estimated earnings of $1.14 a share this year. Dividend yield is 1%.

Management has provided an improvement of year-over-year revenue. Revenue reported was $1.40 billion last fiscal year compared to $1.29 billion in the previous year. The bottom line has rising earnings year-over-year of $100.12 million last fiscal year compared to $86.84 million in the previous year.

Industry Comparison:

The chart looks good technically. The 200-day moving average is trending nicely below the current price. However, the 60-day moving average has turned lower.

If Pier 1reports a favorable earnings release, expect the price to retest the 90-day moving average, currently at 17.06. Pier 1 recently sold off after a seemingly favorable reporting of sales.

 Michael Kors (KORS)

About the company: Michael Kors is a global accessories, footwear and apparel company based in Hong Kong. Michael Kors trades an average of 2.5 million shares per day with a market cap of $7.5 Billion.

The consensus fourth-quarter earnings estimate is currently 16 cents a share. The mean fiscal year estimate price-to-earnings ratio is 38.85, based on earnings of 99 cents a share this year.

For the same fiscal period year-over-year, revenue has improved to $803.33 million last fiscal year compared to $508.09 million in the previous year. The bottom line has rising earnings year-over-year of $72.50 million last fiscal year compared to $39.24 million in the previous year.

Kors is new and doesn't have a long chart history to read. The volatility is high like a typical recent initial public offering. Kors will need to deliver strong growth on the top and bottom lines to maintain the lofty earnings multiple. Meeting expectations may not be enough. Watch for a beat or be prepared for further stock weakness.

After Closing Bell

 Finisar (FNSR)

About the company: Finisar is a provider of fiber optic subsystems and network test and monitoring systems. Finisar trades an average of 2.5 million shares per day with a market cap of $1.2 Billion.

Finisar is anticipated to report weak fourth-quarter earnings on June 11. The consensus estimate is currently 16 cents a share, a decline of 12 cents (43%) from 28 cents during the same period last year.

For the same fiscal period year-over-year, revenue has improved to $948.79 million last fiscal year compared to $629.88 million in the previous year. The bottom line has rising earnings year-over-year of $88.09 million last fiscal year compared to $14.13 million in the previous year.

Industry Comparisons:

JDS Uniphase (JDSU)
Ciena Corporation (CIEN)
Juniper Networks (JNPR)

The industry comparisons tell the whole story. A lowering tide lowers all boats and the communications equipment boats are almost aground. Finisar and the others have sold off so much they are becoming oversold technically. The push higher Wednesday towards $15 fell short of breaking the falling trendline, leaving the bear market intact.

Expectations are low and short interest is high. If Finisar is able to provide a surprise beat and guidance it is setup for a rather large short squeeze.

 Capstone Turbine (CPST)

About the company: Capstone Turbine develops, designs, assembles and sells Capstone MicroTurbines. Capstone trades an average of 2.6 million shares per day with a market cap of $277 million.

Capstone is anticipated to report better fourth-quarter earnings on June 14. The consensus estimate is currently -2 cents a share, an improvement of 10 cents (-500%) from -12 cents during the same period last year.

Investors have been rewarded somewhat with an increase of year-over-year revenue. Revenue reported was $81.9 million last fiscal year compared to $61.6 million in the previous year. The bottom line has lower losses year-over-year of $-38.47 million last fiscal year compared to $-67.24 million in the previous year.

Capstone has lost 43% of its value in the last year and is trading under a dollar. I have no interest in buying this one. The chart looks poor and in six months the stock may face delisting if the price continues to fall (stocks need to keep an average price of $1 or more to remain on Nasdaq).

I use industry comparisons and not necessarily direct competitors.

At the time of publication the author did not hold a position in any stock mentioned.

At the time of publication the author did not hold a position in any stock mentioned.

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