Hot Topic Third Quarter Earnings Sneak Peek

Hot Topic, Inc. (NASDAQ:HOTT) will unveil its latest earnings on Wednesday, November 14, 2012. Hot Topic is a mall- and web-based specialty retailer.

Hot Topic, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 9 cents per share, a rise of 28.6% 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 105% compared to last year’s 41 cents.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the second quarter, the company reported net loss of 2 cents per share versus a mean estimate of a loss of 2 cents per share. In the first quarter, the company beat estimates by one cent.

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A Look Back: In the second quarter, the company’s loss narrowed to a loss of $768,000 (2 cents a share) from a loss of $6.2 million (14 cents) a year earlier, meeting analyst expectations. Revenue rose 4.6% to $157.8 million from $150.9 million.

Stock Price Performance: Between August 15, 2012 and November 8, 2012, the stock price fell $1.07 (-11.1%), from $9.67 to $8.60. The stock price saw one of its best stretches over the last year between October 1, 2012 and October 8, 2012, when shares rose for six straight days, increasing 6.7% (+58 cents) over that span. It saw one of its worst periods between November 1, 2012 and November 8, 2012 when shares fell for six straight days, dropping 6.5% (-60 cents) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.12 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. The company regressed in this liquidity measure from 2.51 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 25.6% to $78.1 million while assets rose 5.9% to $165.6 million.

Wall St. Revenue Expectations: On average, analysts predict $185.4 million in revenue this quarter, a rise of 5.5% from the year-ago quarter. Analysts are forecasting total revenue of $736.5 million for the year, a rise of 5.5% from last year’s revenue of $697.9 million.

Analyst Ratings: With four analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

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

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