Target (NYSE: TGT) announced its results for the most recent quarter on May 16, 2012. Target operates general-merchandise and food discount stores in the United States.Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days.
SEE: Can Earnings Guidance Accurately Predict The Future?
Target's EPS beat estimates and the company's revenues fell in line with predictions. The company reported adjusted net income of $1.11 per share versus the $1.01 per share estimate and revenues of $16.87 billion versus the $16.84 billion estimate. Revenue climbed 5.8% from the same period last year. Net income for the first quarter was $697 million. This is 1.2% higher than the year-ago quarter. Last quarter's rising profit follows a drop of 5.2% to $555 million in the previous quarter.
"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."
A Look Back:
Net income has increased 1.2% year-over-year on average across the last five quarters. The biggest gain came in the third quarter of the last fiscal year, when income climbed 3.7% from the year-earlier quarter.
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. Increasing earnings estimate is a positive sign about the company and it typically leads a increase in the stock price. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. At $4.25 per share, the average estimate for the fiscal year has risen from $4.21 60 days ago.
(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)