Costco Wholesale Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Costco Wholesale (NASDAQ:COST) will unveil its latest earnings on Wednesday, December 12, 2012. Costco Wholesale operates membership warehouses that offer a selection of nationally branded and selected private-label products in categories such as food, appliances, and sporting goods, at low prices.

Costco Wholesale Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 93 cents per share, a rise of 16.3% from the company’s actual earnings for the year-ago quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 13.4% compared to last year’s $4.49.

Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the fourth quarter of the last fiscal year, it reported net income of $1.39 per share versus a mean estimate of $1.30. Two quarters ago, it reported profit of 88 cents per share.

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A Look Back: In the fourth quarter of the last fiscal year, profit rose 27.4% to $609 million ($1.39 a share) from $478 million ($1.08 a share) the year earlier, exceeding analyst expectations. Revenue rose 14.3% to $32.22 billion from $28.18 billion.

Wall St. Revenue Expectations: Analysts predict a rise of 8.6% in revenue from the year-earlier quarter to $23.48 billion.

Stock Price Performance: Between November 30, 2012 and December 6, 2012, the stock price dropped $5.45 (-5.2%), from $103.92 to $98.47. The stock price saw one of its best stretches over the last year between March 6, 2012 and March 15, 2012, when shares rose for eight straight days, increasing 4.4% (+$3.88) over that span. It saw one of its worst periods between April 27, 2012 and May 9, 2012 when shares fell for nine straight days, dropping 6.8% (-$6.07) over that span.

Key Stats:

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 13.2% in the second quarter of the last fiscal year and 19.1% in the third quarter of the last fiscal year before increasing again in the fourth quarter of the last fiscal year.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 12.4% in the first quarter of the last fiscal year, 10% in the second quarter of the last fiscal year and 8.2% in the third quarter of the last fiscal year before increasing again in the fourth quarter of the last fiscal year of the last fiscal year.

Analyst Ratings: There are 11 out of 20 analysts surveyed (55%) rating Costco Wholesale a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.1 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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