Kimberly Clark Corporation ( KMB ) is set to report
first quarter 2013 results on April 19. Last quarter it posted a
0.7% positive surprise. Let's see how things are shaping up for
Growth Factors this Past Quarter
Kimberly Clark's cost saving initiatives, lower commodity costs,
and continued product innovation drove earnings growth in the
fourth quarter. The company achieved higher organic sales on the
back of volume growth and better pricing. The company is well
positioned overseas and has expanded its presence in key emerging
markets through the K-C International segment in the quarter.
Kimberly Clark's restructuring and cost savings initiatives helped
reduce costs, which was reflected in the company's higher operating
profit in the fourth quarter of 2012. However, increased marketing
and interest expenses and higher manufacturing costs dented
Overall, we are encouraged by the company's leadership position
in several categories including diapers, paper goods, health care
and female personal care. Kimberly Clark's latest acquisition of
the anesthesia business of Texas-based Life-Tech, Inc in
early-April helped the company to acquire a leading position in the
pain pump market.
Our proven model does not conclusively show that Kimberly Clark
is likely to beat earnings this quarter. That is because a stock
needs to have both a positive earnings Expected Surprise Prediction
(ESP) (Read: Zacks Earnings ESP: A Better Method ) and a
Zacks Rank #1, #2 or #3 for this to happen. That is not the case
here as shown below.
Negative Zacks ESP : The Most Accurate estimate
stands at $1.32 while the Zacks Consensus Estimate is higher at
$1.34. That is a difference of -1.49%.
Zacks Rank #3 (Hold): Kimberly Clark's Zacks
Rank #3 (Hold) lowers the predictive power of ESP because the Zacks
Rank #3 when combined with a negative ESP makes surprise prediction
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 companies in the consumer staples sector
that can be considered as our model shows they have the right
combination of elements to post an earnings beat this quarter:
Flower Foods Inc ( FLO ), Earnings ESP of
+7.50% and Zacks Rank #1 (Strong Buy).
The Hillshire Brands Co. ( HSH ), Earnings ESP of
+18.75% and Zacks Rank #2 (Buy).
Molson Coors Brewing Co. ( TAP ), Earnings ESP of
+2.86% and Zacks Rank #3 (Hold).FLOWERS FOODS (FLO): Free Stock Analysis ReportHILLSHIRE BRAND (HSH): Free Stock Analysis
ReportKIMBERLY CLARK (KMB): Free Stock Analysis
ReportMOLSON COORS-B (TAP): Free Stock Analysis
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