The top three public companies in Northwest Arkansas have been exceeding analysts’ expectations so far this year, but some are skeptical on whether the trend will continue throughout 2016.
Quarterly financial reports for Wal-Mart Stores Inc., Tyson Foods Inc., and J.B. Hunt Transport Services Inc. have been positive in the first half of 2016.
Walmart’s shares have been steady, trading at more than $68 on the New York Stock Exchange, since announcing first-quarter earnings May 19. As of press time, shares of the world’s largest retailer were trading at $71.
Walmart expects earnings to be between 95 cents and $1.08 per share for the second quarter, ending in July. This is in line with analysts’ estimates, at $1.02 per share, but nearly 20 cents per share less than its earnings a year ago. Earnings might fall to 93 cents per share in the third quarter, based on estimates from 25 analysts surveyed by Thomson Reuters.
In February, the Bentonville-based company projected sales growth to be flat this year because of store closures and continued strengthening of the U.S. dollar.
In the past two quarters, between Oct. 31 and April 30, Walmart opened 251 stores but closed 278. This left the company with 11,527 stores worldwide or 27 fewer stores on April 30 than it had Oct. 31.
Walmart’s shares dipped 1.8 percent after announcing it would close 269 stores in January. Then, shares were trading at $60.84.
On a positive note, sales at stores open at least one year, a key indicator of the retailer’s health, rose 1 percent. Same-store sales have been positive for the past seven quarters. The trend is expected to continue into the second quarter.
Like Walmart, Tyson Foods has seen its share of positive news this year. Its shares soared nearly 19 percent to $61.58, from $51.95 on the New York Stock Exchange after reporting first-quarter earnings Feb. 5.
In the report, the Springdale-based food company projected a 33 percent to 37 percent growth rate in earnings for 2016 and was in a strong financial position that will enable future growth.
On April 13, the day before Tyson proposed a $136 million processing plant in Green Forest, shares fell over 5 percent to $64.66, from $68.37. But in May, shares gained back some ground after a groundbreaking ceremony for a $31 million high-tech broiler hatchery in Springdale.
Earlier this year, executives spoke of the progress in its transition from a protein producer to a branded, value-added food company with stronger, more stable earnings.
On June 13, Tyson announced that Tom Hayes had been promoted to president and will lead the transition to a hybrid model of branded prepared foods and fresh meats.
Hayes will work directly with Donnie Smith, who remains chief executive officer.
John Tyson, chairman of the board of directors, said that succession planning is the board’s responsibility as the company enters its next phase of growth.
At press time, Tyson shares were trading at $61.45. And unlike the other top companies in Northwest Arkansas, Tyson’s earnings are expected to be greater than they were a year ago, according to Thomson Reuters.
Since Jan. 1, J.B. Hunt stock has risen more than 11 percent, trading at $81.29 on Nasdaq as of June 20.
Shares of the Lowell-based carrier started increasing after its fourth-quarter earnings report Jan. 21.
The stock rose more than 3 percent to $88.46 after a positive first-quarter earnings report in April.
But since then, shares have dipped 8 percent.
In a June 8 presentation at Deutsche Bank Global Industrials and Materials Summit, the company projected a 9 percent to 12 percent increase in revenue for 2016. But 26 analysts have second- and third-quarter earnings down from what they were a year ago, according to Thomson Reuters.