Will Avon (AVP) Beat Earnings this Quarter? - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

Avon Products Inc. ( AVP ) is set to declare second-quarter 2013 results on Aug 1. In the last quarter, the company's posted a positive earnings surprise of 85.7%. Let us now look at how things have developed for the imminent announcement.

Growth Factors in the Past Quarter

The year-over-year improved bottom-line results for first-quarter 2013 primarily benefited from improving margins. Management's turnaround strategies aimed at accelerating top-line growth, reducing costs, and improving working capital, paid off, as was evident from improved operating results in the last quarter.

Earnings Whispers?

Our proven model does not conclusively project Avon Products as beating earnings estimates this quarter. A stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, that is not the case here due to the following factors:

Zacks ESP: ESP for Avon Products is 0.00% since the Most Accurate Estimate stands at 26 cents, which is in line with the Zacks Consensus Estimate.

Zacks #3 Rank (Hold): Avon Products' Zacks Rank #3 increases the forecasting power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with Zacks Rank #4 and 5 (Sell rated stocks) going into earnings announcement, especially when the company is undergoing negative estimate revisions.  

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:

The Gap, Inc. ( GPS ), Earnings ESP of +1.70% and a Zacks Rank #1 (Strong Buy).

New York & Company Inc. ( NWY ), Earnings ESP of +33.33% and a Zacks Rank #2 (Buy).

Abercrombie & Fitch Co. ( ANF ), Earnings ESP of +3.23% and a Zacks Rank #3 (Hold).

ABERCROMBIE (ANF): Free Stock Analysis Report

AVON PRODS INC (AVP): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

NEW YORK & CO (NWY): Free Stock Analysis Report

To read this article on Zacks.com 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: ANF , AVP , GPS , NWY

More from Zacks.com




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by BankRate.com