Q4 Earnings Season: 12 Stocks Likely to Disappoint

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The Q4 earnings season has started off on an unexpectedly good note.

Both Alcoa Inc. (NYSE: AA) and Wells Fargo & Co. (NYSE: WFC) last week reported fourth-quarter earnings that beat estimates.

But before you get too excited about the rest of Q4 earnings season, keep in mind not all companies will be able to beat projections. Some industries were hit harder than others by uncertainty around fiscal cliff tax hikes and spending cuts, as both consumers and businesses reined in spending.

To prepare investors for the underperformers of Q4 earnings season, Bank of America has identified 12 stocks it thinks will disappoint. Each has a "Sell" rating and missed earnings estimates on revenue or profit last quarter.

12 Q4 Earnings Losers

Here is Bank of America's list of stocks likely to miss Q4 analysts' projections for either earnings or revenue, listed in order of each company's earnings release date, starting with the earliest.

  • Rockwell Collins Inc. (NYSE: COL): The Cedar Rapids, IA-based company reports Jan. 18 before markets open (BMO). Rockwell designs, produces and supports communication and aviation electronics for military and commercial use. Analysts expect uncertainty over the possible sequester cuts to defense spending to impact COL's earnings. Wall Street projects the company to earn 90 cents per share on revenue of $1.04 billion.
  • Praxair Inc. (NYSE: PX): The industrial gasses company supplies argon, hydrogen, nitrogen, oxygen and a range of specialty gasses. It reports Jan. 23 BMO, and analysts project it will earn $1.38 per share on revenue of $2.78 billion. Last quarter, Praxair missed revenue estimates, citing weakening macro conditions, which have only slightly improved.
  • Southwest Airlines Co. (NYSE: LUV): The Dallas, TX-based airline reports Jan. 24 BMO, and analysts expect it to earn 8 cents per share on revenue of $4.22 billion. Even though its stock has been on the move, up 27% in the past three months, the airline industry is always volatile for investing.
  • Northrop Grumman Corp. (NYSE: NOC): The Falls Church, VA-based defense contractor reports Jan. 30 BMO, and Wall Street expects it to earn $1.74 per share on revenue of $6.34 billion. Northrop is another company suffering from the uncertainly over defense spending cuts and has already announced plans to lay off more than 1,000 workers.
  • Sherwin-Williams Co. (NYSE: SHW): The Cleveland, OH-based paint company reports Jan. 31 BMO, and analysts project earnings of $1.16 per share on revenue of $2.19 billion. SHW was recently downgraded by Northcoast Research from a "Buy" rating to "Neutral."
  • Tyson Foods Inc. (NYSE: TSN): The Springdale, AR-based meat producer reports Feb. 1 BMO, and analysts expect earnings of 39 cents per share on revenue of $8.58 billion. Higher food prices in the past year, especially for chicken products, have cut into Tysons's bottom line.
  • The Clorox Co. (NYSE: CLX): The Oakland, CA-based conglomerate's brands include Pine-Sol, Fresh Step, Kingsford, Brita, Burt's Bees and Glad. It reports Feb. 4 BMO, and analysts expect it to earn 80 cents per share on revenue of $1.26 billion.
  • DENTSPLY International Inc. (Nasdaq: XRAY): The designer and manufacturer of dental products reports Feb. 4 BMO. Net income has dropped 14.2% year-over-year on average across the last five quarters. Analysts expect the company to earn 56 cents per share on revenue of $749 million.
  • Archer Daniels Midland Co. (NYSE: ADM): The Decatur, IL-based company procures, transports, stores, processes and merchandises agricultural commodities and products. It reports Feb 5. BMO, and Wall Street expects earnings of 55 cents per share on revenue of $23.67 billion.
  • Genuine Parts Co. (NYSE: GPC): Genuine distributes automotive, industrial, office and electrical parts. Last quarter, the company missed on earnings and revenue, even with record sales and profits. It reports Feb. 19 BMO, and analysts expect it to earn 93 cents per share on revenue of $3.2 billion.
  • J.C. Penny Co. Inc. (NYSE: JCP): The Plano, TX-based retailer reports Feb. 27 BMO, and analysts expect it to earn 1 cent per share on revenue of $4.27 billion. JCP has struggled over the past year, and it's down almost 50% in the past 12 months. The earnings misses for the first three quarters of its fiscal 2012 caused losses of 19.7%, 3.1% and 13%, respectively, on the day of each earnings release.
  • Staples Inc. (Nasdaq: SPLS): The Framingham, MA-based office products company has had a rough last three years, with its stock falling over 52%. It reports March 6 BMO. Analysts expect it to earn 45 cents per share on revenue of $6.7 billion.

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