A Last Look at The Third Quarter

Investors don't have too many more third-quarter earnings reports to wade through, but data from some big retailers and a few other firms will get attention.

Well-known companies scheduled to report earnings during the week of 17 November include:

Barnes & Noble (NYSE: BKS), BJ's Wholesale Club (NYSE: BJ), Dell (NASDAQ: DELL), Gap Inc (NYSE: GPS), HJ Heinz (NYSE: HNZ), Home Depot (NYSE: HD), Imclone (NASDAQ: IMCL), Intuit (NASDAQ: INTU), Lowe's (NYSE: LOW), Medtronic (NYSE: MDT), and Target (NYSE: TGT).

We previously posted an earnings "look-ahead" for The Home Depot, Inc..  When this firm announces its actual results, we will compare the Income Statement with our baseline and update the GCFR gauges.

GCFR evaluations are already available for the third-quarter financial statements issued by:

• Anheuser-Busch (NYSE:BUD) - GCFR analysis
  
• Automatic Data Processing (NYSE: ADP) - GCFR analysis
  
• BP p.l.c. (NYSE: BP)  - GCFR analysis 
• Broadridge Financial Solutions (NYSE: BR)  - GCFR analysis
  
• ConocoPhillips (NYSE: COP) - GCFR analysis and update
  
• Cisco Systems (NASDAQ: CSCO) - GCFR analysis
  
• Edison International (NYSE: EIX)  - GCFR analysis
  
• Intel (NASDAQ: INTC) - GCFR analysis and update   
• King Pharmaceuticals (NYSE: KG) - GCFR analysis
  
• Microsoft (NASDAQ: MSFT) - GCFR analysis
• Nokia (NYSE: NOK) - GCFR analysis
• Nortel Networks (NYSE: NT) - GCFR analysis 
• NVIDIA (NASDAQ: NVDA) - GCFR analysis
  
• Paragon Shipping, Inc., (NASDAQ: PRGN) - GCFR analysis
  
• PepsiCo (NYSE: PEP) - GCFR analysis
• Tidewater Inc. (NYSE: TDW) - GCFR analysis
• Wal-Mart Stores, Inc. (NYSE: WMT) - GCFR analysis
  
• Watson Pharmaceuticals (NYSE: WPI) - GCFR analysis and Update
  

The following is an update to the scorecard we use to look for trends in the tiny, unscientific selection of earnings reports we are able to analyze.

Company	Net Income Compared to Q/E Sept 2007	Net Income Compared to GCFR Estimate	Overall Gauge Score (100 = max)	Gauge Increasing the Most	Gauge Decreasing the Most
Anheuser Busch	-5.7%	N/A	24	Profitability	None
ADP	+15.6%	+2.6%	63	Cash Mgt	None
BP	+83%	-2.2%	78	Value	None
Broadridge Financial	-1.1%	+5.0%	44	Value	Profitability
Cisco Systems	0%	+5.8%	64	Value	Growth
ConocoPhillips	+41%	+0.6%	48	Value	Profitability
Edison International	-6.9%	-17.5%	22	Value	Growth
Intel	+12.5%	+0.9%	62	Value	Growth
King Pharma	N/A	+60%	68	Value	Cash Mgt
Microsoft	+2.0%	-0.4%	57	Cash Mgt	Growth
Nokia	-30%	+15%	51	Value	Profitability
Nortel	N/A	N/A	35	N/A	Profitability
NVIDIA	-74%	N/A	55	None	Profitability
Paragon Shipping	N/A	N/A	N/A	N/A	N/A
PepsiCo	-9.6%	-9.8%	30	None	Value
Tidewater	+10.4%	-1.0%	34	Value	Profitability
Wal-Mart	+6.6%	+1.4%	27	None	Growth
Watson	+105% (*)	+39% (*)	53	Profitability	Cash Mgt

(*) includes income was related to the sale of the Somerset joint venture to Mylan Labs (NYSE: MYL).


With stocks battered so brutally, it's no surprise that the contrarian Value Gauge is the one increasing the most, while Growth and Profitability are flagging.

The GCFR standard practice is to compute the Value gauge using the share price at the end of the subject quarter.  Because share prices have dropped substantially recently, we recomputed a few Value gauge scores using current prices and saw significant score increases.  Shares have become much less expensive.

It's now time to establish expectations for the fourth quarter, which will be difficult given the discontinuities in the marketplace.  First up for us will be Intel, Microsoft, and Nokia.  Intel (see this) and Nokia (see this) have already lowered their guidance.