This one is for JG - Rite Aid Corporation (NYSE:RAD) will release financial results for its Fiscal 2014 Third Quarter, which ended Nov. 30, 2013, on Thursday, Dec. 19, 2013. The company will hold an analyst call at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) with remarks by Rite Aid's management team.
Wall Street anticipates that the drug store maker will earn $0.04 per share for the quarter. iStock expects RAD to beat Wall Street's consensus number. The iEstimate is $0.08 - ooh, that's big.
Rite Aid operates a chain of retail drugstores in the United States. The company sells prescription drugs and a range of other merchandise, including over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise, and other everyday and convenience products.
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A hundred percent surprise seems like a lot because it is, but Rite Aid has a history of smoking Wall Street's consensus estimate in a big way. Ten of the last 16 quarters RAD topped analysts' view by an average of 98.18% with a range of 30.77% to 300% - ooh, those are big numbers.
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Meanwhile, the four bearish surprises were large percentages, too, but not to the same degree as the bullish variety. The quartet of misses averaged -23.70%, ranging from -12.5% to -41.67%.
The drug store's stock price has been volatile, as you might expect, during the three-days surrounding the last 16 quarterly checkups. Unlike the favorable tilt to bullish EPS surprises, RAD's earning's driven price-performance splits down the middle with eight gains and eight losses. However, price-sensitivity favors bulls as the average gain of 16.64% more than doubles the average loss of -7.38%.
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As! you can see, being on the right side of the trade is extremely profitable. You could flip a coin or dig a little deeper into quarterly performance, which is what iStock did. The last four December announcements heavily favored taking the bull side of RAD's earnings.
The three-days booking ending the December profit scorecard release managed returns of -1.60% (not too painful), 1.1%, 19.40% and 24.8%. Last year produced the big winner!
We also see that almost all of the major plus moves were accompanied by quarter-over-quarter (QoQ) earnings growth. Last quarter, RAD earned $0.07. That iEstimate better be right. Let's dig into Rite Aid's same-store-sales announcements to see if more than $0.07 is possible.
The consensus sales estimate stands at $6.32 billion for Thursday's announcement. We have little doubt that Rite Aid will do slightly better as company press releases add up to $6.33 billion for the quarter.
EPS would come in right on Wall Street's target of $0.04 if net margins remained the same QoQ, not including tax benefits/losses. If management can continue to reduce costs and expenses as they did in Q2, it would add a penny.
Overall: Rite Aid Corporation's (NYSE:RAD) December history of four consecutive bullish surprises, the iEstimate and to a lesser degree, our revenue/EPS work suggest another better than expected result on Thursday morning.
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