3 Earnings Reports That Caught My Attention Last Week

As first-quarter earnings creep to a close, I can't help but point out that the majority of earnings reports we've covered over the past year have been better than expected. With so many companies reporting during the weeks that comprise earnings season, it's easy for some earnings reports to fall through the cracks.

Each week for the past year, I've taken a look at three companies that could be worth further research after either beating or missing their profit expectations. Today, we'll take a gander at three more companies that reported earnings last week. They may have slid under your radar, but they deserve a look.

Company

Consensus EPS

Reported EPS

Surprise

Guess? (NYSE: GES  )

$0.87

$0.95

9%

Jabil Circuit (NYSE: JBL  )

$0.54

$0.53

(2%)

FutureFuel (NYSE: FF  )

$0.19

$0.15

(21%)

Source: Yahoo! Finance.

Guess?
It's a name that aptly fits the apparel and accessories company that wooed analysts with a better-than-expected fourth quarter but offered underwhelming first-quarter guidance of just $0.05 to $0.10 per share when Wall Street had been expecting $0.08.

Unfortunately for Guess?, its fourth-quarter report isn't the peaches 'n' cream that its earnings beat would make it out to be. Overall, adjusted net earnings fell 15% from the year-ago quarter amid a shrinking margin environment in North America, where it generates a majority of its business. Like other apparel retailers, Guess? has taken to expanding to emerging markets in order to boost its bottom line, but the amount it derives in sales from these regions just isn't enough to counteract the negative effects it received from a 6.3% decline in North American same-store sales.

As dire as the outlook might appear for Guess?, I feel it could have a decent chance of stabilizing in North America if it limits its promotional activity and keeps its inventory level relatively low. Whether or not that happens is up to management, but Guess? offers an attractive dividend and a history of profitability that would make it an intriguing buy candidate if it were to fall further.

Jabil Circuit
It's actually quite a shame that Oracle (NYSE: ORCL  ) and Jabil reported within one minute of each other on Wednesday, as Oracle's mammoth earnings miss would have given Jabil shareholders some time to prepare for what was bound to be a similarly miserable report. Oracle, which operates in both the hardware and software side of the business, missed revenue expectations by more than 4%, and noted that hardware sales in the upcoming quarter could fall by 12% to 22%.

Jabil, a company focused mostly on the hardware side of the business, would clearly not be expected to fare well after the news from Oracle -- and not surprisingly, the report wasn't very encouraging. Looking toward the third quarter, Jabil forecast just $0.50 to $0.58 in EPS versus an existing $0.61 EPS estimate. Part of Jabil's reduced forecast has to do with its recent purchase of Nypro for $655 million in February. Nypro, a plastics manufacturer for the health care and consumer electronics sectors, will help expand Jabil's product line, but the costs of integrating the company into its fold are damaging Jabil's margins.

Despite the miss and the hatred of hardware by much of Wall Street, I think Jabil represents a nice value play here. At some point, hardware companies like Jabil -- assuming they can diversify their operations beyond the U.S. and into varying sectors -- should be able to command a reasonable forward valuation. Jabil's net debt of $592 million isn't excessive given its consistent cash flow and 1.7% yield, and I feel the company could actually make for an attractive purchase with limited downside at these levels.

FutureFuel
In May of last year, I featured FutureFuel in my CAPScall of the Week series and placed a CAPScall of outperform on the company, noting consistency in its chemical business and the forecast that a holiday from the fuel blenders tax credit would be only temporary. Since that selection, FutureFuel has moved higher in accord with the overall market, but its bottom line hasn't seen the boost I've been looking for, with top chemical companies holding off on orders, the biodiesel industry scaling back on orders in the fourth quarter, and the fuel blenders tax credit still missing in action.

Despite these concerns, FutureFuel still managed to turn in a profit of $0.83 for the year and noted that it's beginning to see a rebound in demand from the biodiesel and chemicals industry. My Foolish colleague Travis Hoium would prefer to avoid FutureFuel at the moment because the U.S. government is shying away from excessive spending. While I understand where he's coming from, I also feel that alternative fuels are one of the few areas where subsidies aren't in jeopardy of seeing big cuts. That would be great news for FutureFuel and Archer Daniels Midland (NYSE: ADM  ) , an ethanol and biodiesel supplier, which both rely heavily on government subsidies to keep their expenses low and drive their bottom lines. I stand by my assessment that the fuel blenders tax credit will soon be on its way back, which should be a boon for both ADM and FutureFuel.

Foolish roundup
Sometimes an earnings beat or miss isn't as cut-and-dried as it appears. I've given my two cents on what's next for each of these companies -- now it's your turn to sound off. Share your thoughts in the comments section below and consider adding these stocks to your free and personalized watchlist.

One company you'll want to keep your eyes on
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