Diamond Foods, Inc.
), the branded food company is slated to post its second quarter
fiscal 2014 results on Mar 11, 2014. In the previous quarter, the
company delivered a positive earnings surprise of 28.6%. Let's
see how things are shaping up for this announcement.
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Factors this Past Quarter
Although Diamond Foods reported better-than-expected bottom-line
results, its sales for first-quarter fiscal 2014 were
disappointing mainly due to weak performance at the company's
Nuts segment, partially offset by improved sales at the Snacks
segment. The company's gross margin expanded 200 basis points
(bps) to 24.7%, resulting from better price realization,
effective cost management and enhanced productivity at the
company's operating segments. On one hand, the company is trying
to reinstate itself on the growth trajectory, but on the other
hand it remains susceptible to the near-term headwinds such as
challenges related to procuring walnut supplies and mending ties
Our proven model does not conclusively show that Diamond Foods is
likely to beat earnings this quarter. This is because a stock
needs to have both a positive
(Expected Surprise Prediction) and a Zacks Rank of #1, 2 or 3 for
this to happen. This is not the case here as you will see below.
: Diamond Foods currently has an Earnings ESP of 0.00%. This is
because the Most Accurate estimate is in line with the Zacks
Consensus Estimate of 8 cents per share.
Zacks Rank #2 (Buy)
: Diamond Foods' Zacks Rank #2 (Buy) when combined with 0.00% ESP
makes surprise prediction difficult. We caution against stocks
with a 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 you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
), Earnings ESP of +6.25% and a Zacks Rank #1 (Strong Buy).
CommScope Holding Company, Inc.
), Earnings ESP of +5.71% and a Zacks Rank #1 (Strong Buy).
First Merchants Corporation
), Earnings ESP of +2.56% and a Zacks Rank #1 (Strong Buy).