On Thursday, J.C. Penney (NYSE:JCP) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Penney has been trying to engineer a turnaround in its struggling retail business for some time. Yet recently, the company finally gave up on its newest strategy, replacing departing CEO Ron Johnson with former leader Mike Ullman. Let's take an early look at what's been happening with J.C. Penney over the past quarter and what we're likely to see in its quarterly report.

Stats on J.C. Penney

Analyst EPS Estimate

($0.86)

Year-Ago EPS

($0.25)

Revenue Estimate

$2.72 billion

Change From Year-Ago Revenue

(13.7%)

Earnings Beats in Past 4 Quarters

0

Source: Yahoo! Finance.

Can J.C. Penney finally turn around now?
Analysts have completely lost confidence in Penney's future over the past several months, tripling their loss estimates for the most-recent quarter and reducing their earnings-per-share consensus for fiscal 2014 and 2015 by more than almost $2.50 each. The stock has fallen 6% since early February but has recovered from much worse levels In recent months, analysts have scaled back their views on J.C. Penney's earnings somewhat, widening their loss estimates for the first by a penny per share and cutting full-year 2013 earnings projections by $0.04 per share. But they've gotten more optimistic about J.C. Penney's prospects in 2014, and that longer-term optimism has helped push the stock up about 10% since early February.

Penney has already warned investors that its coming quarterly results will be ugly. In a preview last week, the retailer said that same-store sales would drop 16.6%, due largely to the construction work that has been ongoing in more than 500 locations across the country.

Yet in many ways, what Penney's performance looks like in this report is already irrelevant, given the departure of former CEO Ron Johnson. Now, investors face a situation in which Penney has already backtracked on its attempts to eliminate coupons and discounts, apologizing in a massive advertising campaign for what it now claims to see as missteps in its attempt to transform itself. Yet while memories on Wall Street are short, they're not so short as to forget that new CEO Mike Ullman was Johnson's predecessor and played a role in getting Penney into the problems that necessitated Johnson's turnaround attempt in the first place.

Also hanging over Penney's head is the potential for an adverse verdict in its legal battle against Macy's (NYSE:M). Although Penney has managed to defeat Macy's to retain the right to sell its JCP Everyday line of good provided by Martha Stewart Living, there's no guarantee that the court won't hold the company responsible for damages.

In Penney's quarterly report, look closely for Ullman's strategic vision, with particular attention toward any decisions about the company's massive real-estate holdings. Sears Holdings (NASDAQ:SHLD) has looked attractive to many investors primarily because of its real estate rather than its weak retail operation, and given the challenges that Penney faced in raising capital recently, resorting to its real-estate portfolio might be the next step Penney has to resort to in its efforts to survive.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.