Alcoa (AA), Marriott (MAR) and Yum! Brands (YUM) kick off the new earnings season this week. Analysts surveyed by Thomson Reuters are looking for moderate year-over-year earnings and revenue growth in the third quarter from each of these dividend payers. Note that Marriott and Yum! Brands have exceeded consensus estimates in recent quarters and have First Call consensus 'buy' recommendations as well. They are also trading near their 52-week highs, while Alcoa shares are closer to the 52-week low, despite a 22% rise in the past three months.

PepsiCo's Effervescent Revenue

During the three months that ended in September, PepsiCo (PEP) announced investments in Vietnam and was included in Dow Jones sustainability indexes. The beverage and snack giant is expected to post EPS of $1.22, which compares to $1.08 per share a year ago. Third-quarter revenue is expected to have surged 38.7% to $15.4 billion. Looking ahead to the full year, the forecast is for $4.16 per share earnings (+10.2%) on revenue of $57.3 billion (+32.6%). PepsiCo earnings results have met or beat consensus estimates in the past five quarters.

PepsiCo's long-term EPS growth forecast of 8.9% is better than that of rival Coca-Cola (KO), and its price-earnings (PE) ratio of 15.3 is less than the industry average. PepsiCo's return on equity (ROE) is 40.0%. The First Call recommendation has been to buy PEP for more than 90 days, and the mean price target is currently $74.15. The Motley Fool considers it a Buffett-type stock. Shares are 8.9% higher than three months ago and recently have been trading near the 52-week high of $67.61.

Mosaic's Big Earnings Growth

Miner and fertilizer producer Mosaic Co. (MOS) is anticipated to be one of the week's biggest earnings gainers. For its fiscal first-quarter, the consensus forecast calls for earnings to have jumped 68.1% from a year ago to 72 cents per share. During the three months that ended in August, Plymouth, Minn.-based Mosaic reported strong demand and closed on investment in a joint venture. Revenue for that period is expected to total nearly $2 billion. That's a 35.2% increase from the same period of last year. And analysts also expect sequential and year-over-year earnings and revenue growth in the second quarter. Though Mosaic only topped earnings expectations in one of the past four quarters, its EPS increased sequentially each time.

However, Mosaic has a long-term EPS growth forecast of only 8%. Its forward PE ratio is 16.6, but that's less than the industry average and the trailing PE ratio of 31.4. This dividend payer keeps more than enough cash on hand to cover long-term debt, and it has a ROE of 54.3%. Its annual stockholder's meeting is scheduled for October 7. The stock has surged 53.3% in the past three months and ended last week at $59.62.

Jobs Numbers and Other Economic Data

Other quarterly reports scheduled for this week include Constellation Brands (STZ), Costco Wholesale (COST) and Monsanto (MON).

The week's economic data releases include:

  • Monday: Pending home sales in August and factory orders in September
  • Tuesday: ISM nonmanufacturing survey for September
  • Wednesday: ADP employment index for September
  • Thursday: Job vacancies in August, Monster Employment Index for September, consumer credit in August, September same-store sales of retailers and initial jobless claims for last week
  • Friday: Wholesale trade in August and unemployment data for September

Job losses are expected to have declined, with the private sector adding jobs, but the unemployment rate could rise to 9.7% as more people reenter the labor market and seek work.

Also, late next week is the annual meeting of the IMF and World Bank.

Increase your money and finance knowledge from home

Introduction to Value Investing

Are you the next Warren Buffett?

View Course »

Understanding Stock Market Indexes

What does it mean when people say "the market is up 2%"?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Save yourselves. Save your money and reduce your tax footprint in whatever ways you can. Throw the tax and spend your money junkies in DC out on their rears.

October 04 2010 at 9:15 PM Report abuse rate up rate down Reply

Red and blue side are one of the same....We are just living in the Bush Legacey..Taxs breaks for the very Weathy and 2 Wars are Not Free...

October 04 2010 at 1:52 AM Report abuse -3 rate up rate down Reply
2 replies to plleo's comment

Bleep - nobody has anything against 'rich' people. And there are lots of ways to get rich if you are smart, work hard, have an adequate education and the infrastructure of a great nation to work in. You seem to be saying you are a conservative but we had years of conservative government where deficits grew by leaps and bounds. Was President Bush a RINO? Not sure if you are cheering the terrorists or what with your comment. I for one am sad however that my country has not raised one dime to pay for the just punishment we inflicted on the terrorists and those that harbored them. We borrowed and continue to borrow it all from the Chinese and others. Are we too good to pay for our own defense? When I say 'we' I mean all of us, rich and poor, who benefit from living in the best country in the world. If we are taxed enough then great, let's cut spending. If we can't or won't cut spending then raise taxes on all of us. One way or another we need to balance our spending and income.

October 04 2010 at 8:45 AM Report abuse +1 rate up rate down Reply

I does not matter who runs the show..... The last 30 year I have been in Business in The Private Sector.. The Public Sector with all there gravy train jobs, silly-azz rules and regulations Strangled my business to Death...The sad thing about that they do-not understand or get it....Is Once the Private Sector is Done...Its for certain they are finished to...This is the same Manner as a Parasite works=Once the Victim is Done they are Finished to....Guaranteed

October 04 2010 at 1:47 AM Report abuse +2 rate up rate down Reply

Libearals talking points, bush fault and riches fault. enoought nobody is buying it anymore, Most american are not as stupid as all you progressives. Hey idiots check the polls your muslim president sucks, people do not like him anymore.

October 03 2010 at 11:17 PM Report abuse +6 rate up rate down Reply

How can you talk about earnings when over 20 million Americans can't earn a red cent due to the outsourcing of jobs by greedy cretons ?

October 03 2010 at 9:47 PM Report abuse +8 rate up rate down Reply

Sorry China why don't you use some of that Kungfu an cut the debt in half

October 03 2010 at 9:35 PM Report abuse +5 rate up rate down Reply

Americans don't have to pay off the national debt that was created by the outsourcing of jobs. That debt lies with the outspourcers!

October 03 2010 at 9:30 PM Report abuse +5 rate up rate down Reply

Borrow some more money from China since those were our jobs you don't have to pay them back!

October 03 2010 at 9:05 PM Report abuse +8 rate up rate down Reply

If things are so good pay my bills an when they create a job for me I'll pay them back!

October 03 2010 at 9:00 PM Report abuse +8 rate up rate down Reply

They claim the recession ended in the USA but they forgot to put batteries in their GPS because that was in China! If they can't create jobs then that my friends is a depression!

October 03 2010 at 8:58 PM Report abuse +7 rate up rate down Reply