Nordstrom Third Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Nordstrom (NYSE:JWN) will unveil its latest earnings on Thursday, November 8, 2012. Nordstrom is a fashion retailer offering designer, luxury and quality apparel, shoes, cosmetics and accessories.

Nordstrom Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 72 cents per share, a rise of 22% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 70 cents. Between one and three months ago, the average estimate moved up. It has risen from 71 cents during the last month. Analysts are projecting profit to rise by 9.7% compared to last year’s $3.49.

Last quarter, the company came in at net income of 75 cents per share against a mean estimate of profit of 74 cents per share, beating estimates after missing them in the previous quarter. In the first quarter, it missed forecasts by 5 cents.

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Wall St. Revenue Expectations: Analysts are projecting a rise of 17.6% in revenue from the year-earlier quarter to $2.8 billion.

A Look Back: In the second quarter, profit fell 10.9% to $156 million (75 cents a share) from $175 million (80 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 7.1% to $3.01 billion from $2.81 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.15 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 2.41 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 10.8% to $2.45 billion while assets decreased 1% to $5.27 billion.

Key Stats:

After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 6.7% in the third quarter of the last fiscal year, 1.7% in the fourth quarter of the last fiscal year and 2.8% in the first quarter before declining in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.6% in the third quarter of the last fiscal year, 12% in the fourth quarter of the last fiscal year and 13.2% in the first quarter before increasing again in the second quarter.

Stock Price Performance: Between August 9, 2012 and November 2, 2012, the stock price rose $1.40 (2.5%), from $55.08 to $56.48. The stock price saw one of its best stretches over the last year between May 17, 2012 and May 29, 2012, when shares rose for eight straight days, increasing 5.2% (+$2.54) over that span. It saw one of its worst periods between May 2, 2012 and May 14, 2012 when shares fell for nine straight days, dropping 12.2% (-$7) over that span.

Analyst Ratings: With 13 analysts rating the stock a buy, two rating it a sell and seven rating the stock a hold, there are indications of a bullish stance by analysts.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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