Investors are keeping a close watch on fourth-quarter earnings season, which so far looks steadier compared to the last reported quarters. Per the Earnings Trends report as of Jan 27, out of the 170 S&P 500 members that have come up with their quarterly numbers, approximately 64.1% have posted positive earnings surprises, while 54.7% beat top-line expectations.
According to the report, earnings for the 170 S&P 500 companies that have reported so far have advanced 6% from the same period last year, while revenues have increased 3.1%.
Additionally, the report projects that earnings for the total S&P 500 companies are expected to grow 5.2% from the year-ago period, while revenue will rise 4%. In third-quarter, earnings of S&P 500 companies increased 3.8%, while revenues rose 2.3%.
The performance of the index is not restricted to a single sector, and of the 16 Zacks sectors, five are anticipated to observe an earnings decline in fourth-quarter, with Oil/Energy, Autos and Transportation being a big drag. However, the Consumer Discretionary sector is showing improvement. Total earnings for the Consumer Discretionary sector are estimated to rise by 4%. Further, revenues are projected to increase 13.2%.
Among Consumer Discretionary stocks lined up to report earnings, let’s take a sneak peek at two Textile-Apparel companies.
Under Armour, Inc. UAA, the developer, marketer and distributor of branded performance apparel, footwear and accessories, is slated to report fourth-quarter 2016 results on Jan 31, 2017.
Under Armour’s sustained focus on brand development, expansion of its DTC business, product innovation and foray into the technology-based fitness business bode well, as evident from its revenue growth of over 20% in the past 26 straight quarters.
Under Armour, Inc. Price, Consensus and EPS Surprise
Under Armour, Inc. Price, Consensus and EPS Surprise | Under Armour, Inc. Quote
However, Under Armour has been grappling with higher interest expense due to higher debt level. In third-quarter 2016, the company’s interest expenses increased to nearly $8 million in comparison with $4 million in the prior-year quarter. The company expects interest expenses to rise to roughly $30 million in 2016. We also noted that the company’s debt in the third quarter increased to $1.07 billion from $902 million in the year-ago quarter. (Read More: Under Armour: Stock Poised to Beat Earnings in Q4?)
Under Armour carries a Zacks Rank #4 (Sell) and has an Earnings ESP of 4%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.