As earnings season draws to an end, it's hard to describe this quarter as anything other than underwhelming. Many companies missed estimates on both the top and bottom line as weak economic conditions curbed earnings. Fortunately, the final few companies left to report this week are seeing heavy upward revisions activity which might just put a smile on investor's faces.
On the heels of Stratasys's impressive earnings report last week, rival competitor, 3D Systems, reported a strong beat yesterday, sending shares soaring. Leading into the report, analysts had been aggressively revising estimates upward, with earnings and sales expectations increasing around 10% since the prior quarterly report. Even so, this wasn't enough to capture the earnings surprise the company ended up reporting, beating on the bottom line by a resounding 12 cents.
Moreover, retailers DSW and The Children's Place crushed earnings this morning on heavy upward revisions. In the past three months, the two retail names, like 3D systems, had seen EPS expectations shift up 9% which turned out to not be aggressive enough. DSW profits topped the Estimize crowdsourced consensus by by 5 cents while earnings of $1.19 from The Children's Place was enough to beat the consensus by 7 cents.
The number of striking beats in the past two days sets the stage for impressive performances from Ctrip.com, and Aeropostale later this week. The crowd of professionals and nonprofessionals tracking these stocks is frantically revising their estimates of late, pushing EPS up over 60% on each, in the past 3 months.
Bringing the most momentum into this week, Ctrip looks to close off a banner 2015 with yet another beat. Analysts expect Ctrip to post earnings of $0.04 on revenue of $439.87, according to crowdsourced consensus data. Compared to the year prior, earnings are projected to increase 130% while sales are expected to grow by 42%.
Ctrip has been the primary beneficiary of the rising travel trend in China and currently holds a dominant market position in the region. Recent partnerships with eLong and Qunar are likely to propel Ctrip's market share in Chinese hotel and airline bookings to about 70%-80%. Additionally, Priceline's recent $500 million investment in the Chinese travel company will help bolster outbound travel. Ctrip's consolidation of the travel market and growth in the global market will give it the scale and distribution power to generate more meaningful margins. In the meantime, shares have risen 66.91% over the past 12 months, giving shareholders reason to be pleased.
Meanwhile, teen retailer, Aeropostale is hoping to ride the wave of momentum created after Abercrombie and American Eagle reported strong earnings last week. Since then, revisions activity has been rampant with earnings soaring 92% and revenue up 4%. This propelled the crowdsourced EPS estimate up to -$0.03 on -$0.11 guidance issued in mid January. Unfortunately, this won't be enough to mask the anticipated 585% year over year decline on the bottom line.
Aeropostale has had a difficult couple year as teens preferences shifted away from uniform clothing to unique fashion trends. Last quarter the company saw net sales decrease by 20% thanks to 10% declines in comparable sales and e-commerce channels. Aeropostale announced that they would be laying off 100 corporate employees in Q4 as part of an effort to lower expenses by $40 million a year.This comes as no surprise given the company has reported a loss in seven of the past eight quarters. Instead of trying to keep pace with fashion trends, like ANF and ARO, the company remains focused on providing teens with a uniform of basic clothing. So far, that strategy has failed.
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