One of the world's leading consumer products company,
The Clorox Company
) is likely to beat the expectations while reporting its fiscal
2013 second-quarter results on Feb 4.
Why a Likely Positive Surprise?
Our proven model shows that Clorox may beat the earnings since
it has the right combination of two key components - Positive
Earnings Expected Surprise Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #3.
Positive Zacks ESP:
Clorox currently has an Earnings ESP of +1.24%. This is because
the Most Accurate Estimate stands at 82 cents, while the Zacks
Consensus Estimate is pegged at 81 cents.
Zacks #3 Rank (Hold):
Note that stocks with Zacks Rank #1, #2 and #3 have significantly
higher chances of beating the earnings. The sell rated stocks (#4
and #5) should never be considered going into an earnings
The combination of Clorox's Zacks Rank #3 (Hold) and Earnings
ESP of +1.24% makes us confident regarding a positive earnings
beat by the company on Feb 4.
What is driving the Better-than-Expected Earnings?
We believe that the company's intensive capital investments in
information technology systems and R&D will facilitate it in
improving productivity while providing platforms for growth,
product innovation and cost savings.
The positive trend is seen in the trailing four-quarter
average surprise of 8.3%, which was greatly helped by a 6.3%
surprise in the last quarter. During the previous quarter, the
company mainly benefited from improved sales resulting from
higher prices, while inflation played spoilsport impacting
manufacturing and logistics costs, as well as other supply chain
Other Stocks to Consider
Clorox is not the only firm looking up this earnings season.
The following companies - Clorox's industry peers - are also
likely to beat the earnings in the to-be-reported quarter:
Inter Perfums Inc.
) has Earnings ESP of +13.33% and carries a Zacks Rank #1 (Strong
) with Earnings ESP of +1.43% and a Zacks Rank #2 (Buy).
Proctor & Gamble Company
) with Earnings ESP of +1.04% and a Zacks Rank #2 (Buy).
COLGATE PALMOLI (CL): Free Stock Analysis
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