Thursday, October 21, 2010

Tractor Supply (Nasdaq:TSCO) Earnings Estimate Lowered by FBR Capital

After earnings results released from Tractor Supply (Nasdaq:TSCO), FBR Capital was underwhelmed with them, maintaining their "Underperform" on the company and lowering their earnings per share.

That is interesting because of the fairly strong quarter for Tractor Supply, who recorded an increase in sales of 46 percent, exceeding expectations.

FBR said, "What seemed to prevent an upward preannouncement of the quarter was a $0.045 beneficial swing from a LIFO credit for the period, which rendered EPS generally in line with expectations. Same-store sales were up 5% for the period, compared with our 5.5% estimate. October trends to date (first month of 4Q10E) are "comping nicely" versus the cool weather trends, which helped this time last year. Implied same-store sales guidance is 2%–4% for 4Q10E.

"We adjust our 2010E EPS estimate to $2.16 from $2.20; this compares with the former (pre 3Q) Street estimate of $2.08. For 2011E, we adjust our EPS estimate to $2.33 from $2.47, which is below the current Street mean estimate of $2.36."

Tractor Supply was trading at $37.17, down $0.82, or 2.16 percent at 12:57 PM EDT. FBR has a price target of $31 on them, raising it from $30 a share.

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