McCormick & Company, Inc.
) is set to report fiscal first quarter 2013 results before the
opening bell on Apr 2. Last quarter, this global leader in
flavors posted a 3.48% negative surprise. Let's see how things
are shaping up prior to the announcement.
Factors This Past Quarter
McCormick's sales and earnings both lagged the Zacks Consensus
Estimate in fourth quarter fiscal 2012 as the company experienced
disappointing retailer buying patterns and temporary supply chain
disruptions in the Americas region and lower demand from
industrial customers in the Asia/Pacific region.
Also, the unfavorable mix of businesses negatively impacted
operating income in the industrial segment in the quarter. Though
earnings and revenues increased on a year-over-year basis driven
by acquisitions benefits, positive volume, and improved product/
pricing mix; high input costs and currency headwinds remained an
overhang in the quarter.
The Zacks Consensus Estimate for the first quarter stands at
56 cents. Estimates have mostly seen a downward trend ahead of
the first quarter results, due to an expectation of soft results
from industrial segment.
Though McCormick remains on track to implement a new inventory
management process in order to improve inventory levels, the
difficult global economy ahead and material cost pressure is
expected to hurt the sales in the coming quarters.
The stock carries a Zacks Rank #4 (Sell). We caution against
stocks with Zacks Ranks #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
Our model states that 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 to beat earnings estimates.
You could, however, consider other consumer staples stocks
FLOWERS FOODS (FLO): Free Stock Analysis
KELLOGG CO (K): Free Stock Analysis Report
MCCORMICK & CO (MKC): Free Stock Analysis
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