Is Archer Daniels (ADM) Poised for Earnings Surprise in Q2? - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

We expect the world's largest corn processor Archer Daniels Midland Co. ( ADM ) to beat expectations when it reports second-quarter 2014 results on Aug 5.

Why a Likely Positive Surprise?

Our proven model shows that Archer Daniels may beat earnings because it has the right combination of two key components.

Positive Zacks ESP: Archer Daniels currently has an Earnings ESP of +2.67%. This is because the Most Accurate estimate stands at 77 cents per share, while the Zacks Consensus Estimate is pegged at 75 cents.

Zacks Rank #3 (Hold): Note that stocks with a Zacks Rank #1, 2 and 3 have a higher chance of beating earnings. The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

The combination of Archer Daniels' Zacks Rank #3 and Earnings ESP of +2.67% makes us confident of a positive earnings beat.

What is Driving Better-than-Expected Earnings?

Archer Daniels is a leading player in the global food processing industry. It has a network of over 600 processing and sourcing facilities and 27,000 vehicles operating across the Americas, Europe and Asia for transportation of agricultural commodities. This strengthens its well-established position in the market.

We believe that Archer Daniels' consistent focus on enhancing its processing capabilities and global footprint through strategic acquisitions and joint ventures bode well for future growth. Furthermore, Archer Daniels' margins are expected to improve in 2014 as a result of robust global farm production, which will subsequently lower the prices of agricultural products.

Other Stocks to Consider

Archer Daniels is not the only firm looking up this earnings season. The following companies are also likely to beat earnings in the to-be-reported quarter:

First Solar Inc. ( FSLR ) has an Earnings ESP of +6.06% and a Zacks Rank #1 (Strong Buy).

Wal-Mart Stores Inc. ( WMT ) has an Earnings ESP of +2.48% and a Zacks Rank #3.

Quicksilver Resources Inc. ( KWK ) has an Earnings ESP of +14.29% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ARCHER DANIELS (ADM): Free Stock Analysis Report

WAL-MART STORES (WMT): Free Stock Analysis Report

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

QUICKSILVER RES (KWK): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: ADM , WMT , FSLR , KWK

More from


Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by