Dollar Tree Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Dollar Tree (NASDAQ:DLTR) will unveil its latest earnings on Thursday, November 15, 2012. Dollar Tree operates discount variety stores in the United States. Its stores offer merchandise at the fixed price of $1.00. The company operates stores under the names of Dollar Tree, Deal$, and Dollar Bills.

Dollar Tree Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 49 cents per share, a rise of 11.4% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 52 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 51 cents during the last month. For the year, analysts are projecting profit of $2.48 per share, a rise of 22.8% from last year.

Past Earnings Performance: The company is looking to beat analyst estimates for the third quarter in a row. Last quarter, it beat estimates with net income of 51 cents per share against the mean estimate of 47 cents. In the prior quarter, the company reported profit of 50 cents.

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A Look Back: In the second quarter, profit rose 25.6% to $119.2 million (51 cents a share) from $94.9 million (77 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 10.5% to $1.7 billion from $1.54 billion.

Stock Price Performance: Between August 16, 2012 and November 9, 2012, the stock price fell $11.37 (-23.2%), from $49.11 to $37.74. The stock price saw one of its best stretches over the last year between May 17, 2012 and May 25, 2012, when shares rose for seven straight days, increasing 7.4% (+$7.07) over that span. It saw one of its worst periods between November 1, 2012 and November 9, 2012 when shares fell for seven straight days, dropping 6.5% (-$2.64) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 8.1% in revenue from the year-earlier quarter to $1.73 billion.

Key Stats:

With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 11.7% over the last four quarters.

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 15.6% in the fourth quarter of the last fiscal year and 15% in the first quarter before increasing again in the second quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.28 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Analyst Ratings: With nine analysts rating the stock as a buy, one rating it as a sell and nine rating it as a hold, there are indications of a bullish outlook.

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

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