9 companies’ profits are about to boom

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Earnings season is filling many investors with dread – as it’s expected to be another dismal quarter for profits. But some companies could put investors back into a good mood.

There are nine companies in the Standard & Poor’s 500, including online retailer Amazon.com (AMZN), cruise ship operator Royal Caribbean Cruises (RCL) and airline United Continental (UAL), that are expected to post 90% or higher adjusted profit growth in the fourth quarter, according to a USA TODAY analysis of data from S&P Capital IQ. These companies are in stark contrast to the S&P 500 at large, which is expected to post 5.9% lower profit.

Earnings season has turned into a point of pain for investors – corporate profit growth has faded and headed in the wrong direction. If earnings fall in the fourth quarter, it would be the second straight quarter of adjusted earnings declines following the 1.4% decline in the third quarter, says S&P Capital IQ.

That’s what makes the explosive profit growth from a company like Amazon standout even more. While other retailers – especially department stores struggle and restructure – Amazon is set to report adjusted profit of $1.60 a share in the fourth calendar quarter, which would be a 255% increase from the same period a year ago. No wonder the stock is up 112% over the past twelve months closing Tuesday at $617.89. The company is scheduled to report earnings on Jan. 29.

Some of the big profit gains are coming from companies that are righting themselves from harder times. Royal Caribbean Cruises is bouncing back from a tough period for cruise ship operators. Analysts are calling for the company to report adjusted fourth quarter profit of 92 cents a share, up 188% from the same period a year ago. Shares are up 12.9% to close at $94.02 Tuesday. The company is expected to report on Feb. 16.

Airlines continue to put up huge profit growth, even though investors are souring on the group. United Continental is expected to report quarterly adjusted profit of $2.60 a share, up 117% from the same period last year. But despite the big jump in expected earnings growth, shares are down 23% this year as investors fear that airlines might add capacity. The company reports Jan. 22.

These are estimates – which could prove to be overly optimistic. If that’s the case, investors could be even more disappointed if these bright spots don’t pan out. But for now, these companies are holding out examples of how profit can still grow in a difficult environment.

S&P 500 COMPANIES EXPECTED TO POST HIGHEST FOURTH-QUARTER PROFIT GROWTH 

Company, symbol, Q4 2015 EPS % expected

Pinnacle West Capital, PNW, 406.3%

Amazon.com, AMZN, 254.8%

Royal Caribbean Cruises, RCL, 187.6%

Apartment Investment and Management, AIV, 118.8%

United Continental, UAL, 116.7%

Equinix, EQIX, 107.5%

Loews, L, 97%

Entergy, ETR, 96.8%

Vulcan Materials, VMC, 96.5%

Matt Krantz

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