This vital update provides investors with timely information regarding companies that will be reporting their earnings in the coming week, how companies' earnings faired the week prior, exclusive sector rankings and earnings commentary. Below you will find a synopsis of this week's earnings commentary including estimates and the Zacks Rank for the previously mentioned companies:

Companies Making an Announcement This Week:

Ticker Company Name Date EPS Estimate ZacksRank(a)
------ ------------ ---- ------------ ------------

BBY Best Buy 3/30 1.56 4
CC Circuit City 3/30 .55 2
COGN Cognos, Inc. 3/31 .48 3
KMX Carmax 3/30 .28 3
RHAT Red Hat 3/31 .06 4

To see the complete Weekly Earnings and Sector Update with the entire list of companies reporting this week and sector rankings, click http://at.zacks.com/?id=106

4Q 2004 Earnings Scorecard - S&P 500

491 companies in the S&P 500 have released 4Q 2004 earnings results as of 3/25/05.

66% (of the companies) exceeded estimates

16% matched estimates

18% missed estimates

Synopsis of Weekly Earnings and Sector Update by Nick Raich

Over 98% of companies in the S&P 500 have released fourth quarter 2004 earnings. The results have exceeded Nick Raich's expectations. The final fourth quarter 2004 results will mark the fifth consecutive quarter of earnings growth exceeding 20%. As he factors in Zacks estimates for the companies yet to report with the companies that have already released results, Raich believes the final fourth quarter earnings results for the S&P 500 will easily exceed the beginning of the quarter consensus estimate of 15% growth. His best estimate is for final earnings growth of 28%. Strong year-over-year earnings gains in the Materials, Energy and Technology sectors have been driving the results.

In total, 491 S&P 500 companies have released fourth quarter 2004 earnings results as of 3/25/05. Of those that reported, 82% have met or exceeded their estimates. Average earnings growth has been 28% from last year with sales growth up 13%. Despite sounding like fantastic numbers, the market has shifted its attention to next quarter where the current first quarter 2005 consensus earnings growth figure is only for 10.5%. In Raich's view, this figure is too low and he expects the final first quarter 2005 earnings growth figure to be 16%. Although if oil prices continue to rise, he believes first quarter figures will only slightly exceed current earnings expectations and forward guidance will not be raised. If this occurs, Raich believes it will not be good for a rising stock market. He cautions that the market could face continued near-term selling pressure without the raised earnings guidance.

Focus over the next two weeks will be on first quarter 2005 preannouncements. Over the past thirty days, Raich believes earnings guidance has been relatively positive with 1.35 companies lowering earnings guidance for every company raising it. Over the past five years, this negative to positive ratio has averaged roughly three to one. Therefore, the current guidance should be viewed favorably. In his opinion, this further supports the belief that current first quarter estimates are too low.

Companies in the Auto-Tires-Truck sector have been warning about earnings the most as measured by a 3:1 negative to positive ratio. Retail, Finance and Medical companies also had warnings that ran above the overall average.

Within the Basic Materials and Oils-Energy sectors, more companies were raising earnings estimates than lowering them over the past month. In fact, S&P 500 companies in the Basic Material and Energy sectors actually had their 1Q 2005 estimates raised by almost a full percentage point over the past two weeks. Every other sector within the S&P 500 either had 1Q 2005 estimates that remained unchanged or declined.

Of course, Raich will closely monitor the rest of the guidance this month, which will ultimately help him determine how first quarter and even the remainder of 2005 will go for earnings.

(a)About the Zacks Rank

What is the Zacks Rank? A stock ranking system that for over 15 years has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Stocks are ranked from 1 (Strong Buy) to 5 (Strong Sell). Since 1988 the #1 Ranked stocks have generated an average annual return of +33.4% compared to the (b)S&P 500 return of only +12.2%. Plus this exclusive stock list has generated average gains of +28.6% during the last 4 years; a substantial return compared to the large losses suffered by most investors during that time frame. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). And since 1988 the S&P 500 has outperformed the Zacks #5 Ranked stocks by 133.5% annually (12.21 % vs. 5.23% respectively). Thus, the Zacks Rank system can truly be used to effectively manage the trading in an individual investor's portfolio