What to Expect from Kellogg's Earnings? - Analyst Blog
29 Aprile 2013 - 7:15PM
Zacks
Kellogg Company (K) is set to report its
first-quarter fiscal 2013 results on May 2 before the market opens.
Last quarter it posted 3.1% positive surprise. Let’s see how things
are shaping up for this announcement.
Factors to Consider This Quarter
During the first quarter, sales growth is expected to be solid.
We believe the improving volume trends in North America and strong
performance of its Pringles business will once again drive the top
line in the quarter. Kellogg acquired The Procter &
Gamble Company’s (PG) snack unit in Jun 2012 which
included the iconic potato snack brand, Pringles, for $2.7 billion.
Pringles is now the second-largest brand at Kellogg.
However, the company expects adjusted operating profit to
decline slightly year over year due to higher costs of input and
other cost increases. Earnings per share are also expected to be
down in the first quarter due to difficult year-ago comparisons
(which included a $0.05 benefit from interest rate hedges) and
headwinds from the Venezuela currency devaluation.
Earnings Whispers?
Our proven model does not conclusively show that Kellogg is
likely to beat earnings this quarter. That is because a stock needs
to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A
Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen.
That is not the case here, as you will see below.
Negative Zacks ESP: The Earnings ESP is
-0.97%.
Zacks #2 Rank (Buy): Kellogg carries a
Zacks Rank#2 (Buy). However the Zacks #2 Rank when combined with a
negative ESP makes surprise prediction difficult. We caution
against stocks with Zacks #4 and #5 Ranks (Sell rated stocks) going
into the earnings announcement.
Other Stocks to Consider
Here are some other food companies you may want to consider, as
our model shows they have the right combination of elements to post
an earnings beat this quarter:
- Flower Foods Inc. (FLO), with Earnings ESP of
+14.63% and a Zacks Rank #1 (Strong Buy).
- J&J Snack Foods Corp. (JJSF), with
Earnings ESP of +9.84% and a Zacks Rank #2 (Buy)
FLOWERS FOODS (FLO): Free Stock Analysis Report
J&J SNACK FOODS (JJSF): Free Stock Analysis Report
KELLOGG CO (K): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
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