S&P 500 (NYSE:SPY) component Lorillard (NYSE:LO) will unveil its latest earnings on Wednesday, October 24, 2012. Lorillard manufactures and sells cigarettes and tobacco under the brand names of Newport, Kent, True, Maverick, and Old Gold.
Lorillard Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average analyst estimate is for profit of $2.24 per share, a rise of 15.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $2.25. Between one and three months ago, the average estimate was unchanged. It has since dropped over the last month. Analysts are projecting profit to rise by 8.6% versus last year to $8.56.
Past Earnings Performance: The company has missed estimates in the last two quarters. In the second quarter, it missed the mark by 13 cents as a result of reporting net income of $2.19 against an estimate of profit of $2.32 per share. In the first quarter, the company fell short of forecasts by 25 cents.
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Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.8 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.
Wall St. Revenue Expectations: Analysts predict a rise of 9% in revenue from the year-earlier quarter to $1.21 billion.
Stock Price Performance: Between July 25, 2012 and October 18, 2012, the stock price fell $10.62 (-8.2%), from $128.79 to $118.17. The stock price saw one of its best stretches over the last year between August 7, 2012 and August 17, 2012, when shares rose for nine straight days, increasing 7.2% (+$8.86) over that span. It saw one of its worst periods between September 4, 2012 and September 12, 2012 when shares fell for seven straight days, dropping 8.5% (-$10.82) over that span.
An income boost this time around would be welcome news after profit declines in the past two quarters. Net income dropped 10.1% in the first quarter and then again in the second quarter.
On the top line, the company is hoping to build on a revenue increase last quarter. Revenue fell 0.6% in the first quarter after increasing in the second quarter.
A Look Back: In the second quarter, profit fell 2.4% to $284 million ($2.17 a share) from $291 million ($2.05 a share) the year earlier, missing analyst expectations. Revenue rose 2.3% to $1.73 billion from $1.69 billion.
Analyst Ratings: With five analysts rating the stock as a buy, none rating it as a sell and five 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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