PetSmart Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component PetSmart, Inc. (NASDAQ:PETM) will unveil its latest earnings on Wednesday, November 14, 2012. PetSmart is a specialty provider of products, services, and solutions for the lifetime needs of pets. The company offers a line of products for all the life stages of pets and offers various pet services.

PetSmart, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 63 cents per share, a rise of 26% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 61 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 63 cents during the last month. Analysts are projecting profit to rise by 32.9% compared to last year’s $3.39.

Past Earnings Performance: Last quarter, the company beat estimates by 6 cents, coming in at profit of 71 cents a share versus the estimate of net income of 65 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the second quarter, profit rose 28.3% to $78.5 million (71 cents a share) from $61.2 million (54 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 8.9% to $1.62 billion from $1.49 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 8% in revenue from the year-earlier quarter to $1.62 billion.

Stock Price Performance: Between September 13, 2012 and November 8, 2012, the stock price had fallen $3.66 (-5.2%), from $70.04 to $66.38. The stock price saw one of its best stretches over the last year between January 3, 2012 and January 12, 2012, when shares rose for eight straight days, increasing 5.2% (+$2.65) 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% in the fourth quarter of the last fiscal year and 33.5% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 7.9% in the third quarter of the last fiscal year, 7.7% in the fourth quarter of the last fiscal year and 9.4% in the first quarter before increasing again in the second quarter.

Analyst Ratings: There are mostly holds on the stock with 13 of 21 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.84 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. The company improved this liquidity measure from 1.83 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 5.3% to $1.3 billion while liabilities rose by 4.7% to $707.4 million.

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

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