Target Earnings: Profit Streak has Investors Cheering

S&P 500 (NYSE:SPY) component Target Corporation (NYSE:TGT) reported net income above Wall Street’s expectations for the first quarter. Target operates general-merchandise and food discount stores in the United States.

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Target Earnings Cheat Sheet for the First Quarter

Results: Net income for Target Corporation rose to $697 million ($1.04 per share) vs. $689 million (99 cents per share) in the same quarter a year earlier. This marks a rise of 1.2% from the year-earlier quarter.

Revenue: Rose 5.8% to $16.87 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Target Corporation reported adjusted net income of $1.11 per share. By that measure, the company beat the mean estimate of $1.01 per share. Analysts were expecting revenue of $16.84 billion.

Quoting Management: “We’re very pleased with our first quarter earnings, which benefited from better-than-expected sales,” said Gregg Steinhafel, chairman, president, and chief executive officer of Target Corporation. “While our outlook for the remainder of 2012 reflects continued economic uncertainty, we are confident in our strategy, keenly focused on delivering an affordable and inspirational merchandise assortment to our guests and committed to making thoughtful investments in our U.S. and Canadian business segments that we expect will reward our shareholders over time.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 10 cents in the fourth quarter of the last fiscal year, by 8 cents in the third quarter of the last fiscal year, and by 6 cents in the second quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 3% to $21.29 billion in the fourth quarter of the last fiscal year. The figure rose 5.1% in the third quarter of the last fiscal year from the year earlier and climbed 4.6% in the second quarter of the last fiscal year from the year-ago quarter.

Last quarter’s profit increase comes after net income dropped in the prevoius quarter. In the fourth quarter of the last fiscal year, net income declined 5.2% to $981 million.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the second quarter has gone up from 98 cents per share to 99 cents. For the fiscal year, the average estimate has moved up from $4.21 a share to $4.25 over the last sixty days.

Competitors to Watch: Wal-Mart Stores, Inc., Costco Wholesale Corp., Dollar Tree, Inc., Dollar General Corp., Gordmans Stores, Inc., Wal-mart de Mexico S A B de C V, Family Dollar Stores, Inc., 99 Cents Only Stores, Fred’s, Inc., and BJ’s Wholesale Club, Inc.

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

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