Leggett & Platt Inc.
) is set to report first-quarter 2014 results on Apr 25. Last
quarter, the company posted an earnings surprise of 6.1%. Let us
see how things are developing for this announcement.
Growth Factors in the Past Quarter
Leggett reported better-than-expected fourth-quarter 2013
results with sales and earnings of $896.8 million and 35 cents
per share, respectively, which was above the year-ago comparable
quarter figure as well as the Zacks Consensus Estimate. The
year-over-year top-line improvement was largely attributable to a
3% increase in unit volume and 2% benefit from acquisitions.
Moreover, improved bottom-line results were primarily driven
by increased sales, leverage operating expenses, lower interest
payment and a decline in outstanding number of shares. These
positives were partly offset by higher steel costs. Buoyed by
better-than-expected quarterly performance, Leggett is expecting
an increase in sales, earnings before interest and tax (EBIT)
margin and operating earnings per share (EPS) in 2014.
A well-diversified customer base, pricing power and solid
research and development (R&D) capabilities facilitate
Leggett to keep itself afloat in the soft economic environment.
We commend the company's consistent endeavors to keep itself on
the growth trajectory through acquisitions, which will help to
increase the top and bottom lines as well.
Our proven model does not conclusively show that Leggett is
likely to beat earnings this quarter. This is because a stock
needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. This is not the
case here as you will see below.
ESP for Leggett is 0.00% since the Most Accurate Estimate stands
at 38 cents, which is in line with the Zacks Consensus
Zacks Rank #3 (Hold):
Leggett's Zacks Rank #3 (Hold) has little effect on the
predictive power of ESP because the Zacks Rank #3, when combined
with a 0.00% ESP, makes surprise prediction difficult.
We caution against stocks with Zacks Rank #4 and 5 (Sell-rated
stocks) going into an earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Leggett is not the only firm we are looking up to this
earnings season. Our model shows that the following stocks have
the right combination to post an earnings beat:
CHURCH & DWIGHT (CHD): Free Stock Analysis
DISNEY WALT (DIS): Free Stock Analysis Report
LEGGETT & PLATT (LEG): Free Stock Analysis
To read this article on Zacks.com click here.
The Walt Disney Co.
) with an Earnings ESP of +2.08% and a Zacks Rank #2 (Buy)
Church & Dwight Co. Inc.
) with an Earnings ESP of +1.37% and a Zacks Rank #3