Campbell Soup Company
) is scheduled to report its third-quarter fiscal 2014 results on
May 19. Last quarter, this manufacturer of branded convenience food
products posted a positive earnings surprise of approximately
1.44%. Let's see how things are shaping up for this announcement.
Factors Influencing the Upcoming Results
Following an excellent second-quarter fiscal 2014, the company
remains optimistic about its results for the rest of the year. The
company expects sales to increase 4%-5% for fiscal 2014. Moreover,
the company expects adjusted earnings growth guidance to be in the
range of 2%-4% with fiscal 2014 earnings ranging between $2.53 and
$2.58 per share.
However, we believe this optimism for the rest of the year could be
slightly impacted by the upcoming quarter results, wherein the
company's sales might be hurt by the prevailing weak volume trends,
shift of Easter into the fourth quarter this year and the effect of
severe winter weather in the third quarter. Additionally, we expect
the impact on sales to slightly weigh upon the reported earnings
for the third quarter.
Our proven model does not conclusively project Campbell as likely
to beat earnings this quarter. A stock needs to have both a
and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However,
this is not the case here due to the following factors:
ESP (Expected Surprise Prediction) for Campbell is 0.00% since the
Most Accurate estimate stands at 59 cents per share, which is in
line with the Zacks Consensus Estimate.
Zacks #3 Rank (Hold):
Campbell's Zacks Rank #3 increases the predictive power of ESP.
However, we also need to have a positive ESP to be confident of an
earnings surprise. We caution against stocks with a Zacks Rank #4
and #5 (Sell-rated stocks) going into earnings announcement,
especially when the company is undergoing negative estimate
Other Stocks to Consider
Here are some companies you may want to consider as our model shows
they have the right combination to post an earnings beat:
Foot Locker Inc.
) has an Earnings ESP of +1.91% and a Zacks Rank #2 (Buy).
The Gap Inc.
) holds an Earnings ESP of +1.79% and it carries a Zacks Rank #3.
) with an Earnings ESP of +5.56% carries a Zacks Rank #3.
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