General Mills Inc.
) is set to report its first-quarter fiscal 2014 results on Sep
18 before the market opens. Last quarter, it posted a 1.9%
negative surprise. Let's see how things are shaping up for this
Factors to Consider This Quarter
Though General Mills expects stronger earnings growth in
fiscal 2014, we believe that the first quarter could be a little
tough due to soft overall volume trends and recent negative
momentum in the food sector. For General Mills, especially, two
of its most important categories - cereals and yogurt - are
showing sluggish results.
Though the company is making an effort to re-invigorate their
growth, the results are not expected to benefit the top line in
this quarter. However, cost savings and lower commodity cost
inflation could prove to be tailwinds which are expected to be
partially offset by higher advertising costs.
Our proven model does not conclusively show that General Mills
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive Earnings ESP (Read:
) 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 -1.43%.
Zacks #3 Rank (Hold):
General Mills carries a Zacks Rank #3 (Hold) which lowers the
predictive power of ESP because a Zacks Rank #3 when combined
with a negative ESP makes surprise prediction difficult. We
caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other consumer staples companies you may want to
consider, as our model shows they have the right combination of
elements to post an earnings beat this quarter:
Treehouse Foods, Inc.
), Earnings ESP of +1.30% and a Zacks Rank #2 (Buy).
The J. M. Smucker Company
), Earnings ESP of +0.63% and a Zacks Rank #3 (Hold).
), Earnings ESP of +2.36% and a Zacks Rank #3 (Hold).
GENL MILLS (GIS): Free Stock Analysis Report
INGREDION INC (INGR): Free Stock Analysis
SMUCKER JM (SJM): Free Stock Analysis Report
TREEHOUSE FOODS (THS): Free Stock Analysis
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