Big Lots Inc. Earnings: Tops Wall Street Profit Estimate

S&P 500 (NYSE:SPY) component Big Lots Inc. (NYSE:BIG) dropped to a third quarter loss, but results topped expectations. Big Lots operates as a broadline closeout retailer through its subsidiaries in the United States. It sells a number of products, including food, home decor, and furniture.

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Big Lots Inc. Earnings Cheat Sheet

Results: Reported a loss of $6 million (10 cents per diluted share) in the quarter. Big Lots Inc. had a net income of $4.2 million or 6 cents per share in the year-earlier quarter.

Revenue: Fell 0.4% to $1.13 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Big Lots Inc. reported adjusted net income of 3 cents per share. By that measure, the company beat the mean analyst estimate of a loss of 24 cents per share. It fell short of the average revenue estimate of $1.3 billion.

Quoting Management: “We update our guidance for fourth quarter fiscal 2012 consolidated income from continuing operations to be in the range of $1.91 to $2.10 per diluted share,” the company said in a press release. “This guidance assumes U.S. comparable store sales decline in the range of low to mid single digits and a total U.S. sales increase in the range of 3% to 7%. For our Canadian operations, sales are expected to be in the range of $48 to $52 million for the fourth quarter of fiscal 2012. As a reminder, the fourth quarter of fiscal 2012 includes 14 weeks of operations, compared to 13 weeks of operations in last year’s fourth quarter results.”

Key Stats:

A year-over-year revenue decrease last quarter breaks a four-quarter streak of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 9.9%.

After two quarters of falling short, the company beat estimates last quarter. In the second quarter, it missed the mark by 5 cents, and in the first quarter, it came in under estimates by one cent.

The company’s loss in the latest quarter follows profits in the previous three quarters. The company reported a profit of $22.1 million in the second quarter, a profit of $40.7 million in the first quarter and $114.7 million in the fourth of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $2.04 a share to $2.01 over the last ninety days. For the fiscal year, the average estimate has moved down from $2.84 a share to $2.80 over the last ninety days.

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

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