)is set to report fourth-quarter fiscal 2013 results on Feb 6,
before the market opens. Last quarter, it delivered positive
earnings surprise of 6.7%. Let's see how things are shaping up
for this announcement.
Factors to Consider this Quarter
Kellogg has been seeing slower-than-expected sales growth in
the U.S. in the past two quarters due to sluggishness in the U.S.
snacks and cereals - two of Kellogg's largest businesses. While
sluggish category growth is hurting cereals, weakness in crackers
and cookies is taking a toll on the snacks business.
Kellogg's U.S. sales are expected to be slow in the fourth
quarter as well. In fact management expects sales to be weaker in
most developed markets in the fourth quarters. In addition to
soft sales, higher costs should pressurize margins. The Pringles
business and international segments should continue to do well in
the fourth quarter.
Our proven model does not conclusively show that Kellogg is
likely to beat earnings this quarter. That 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. That is not the case here, as you will see
The Earnings ESP is -1.22%.
Kellogg carries a Zacks Rank #3 (Hold) which, when combined with
a negative ESP, makes surprise prediction difficult. 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
Other stocks in the consumer staples sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
ConAgra Foods, Inc.
), with earnings ESP of +1.54% and a Zacks Rank #2 (Buy).
), with earnings ESP of +1.18% and a Zacks Rank #2.
Mondelez International, Inc.
), with earnings ESP of +2.27% and a Zacks Rank #3.
CONAGRA FOODS (CAG): Free Stock Analysis
KELLOGG CO (K): Free Stock Analysis Report
LORILLARD CO (LO): Free Stock Analysis Report
MONDELEZ INTL (MDLZ): Free Stock Analysis
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