Food products company
ConAgra Foods Inc.
) is scheduled to release its fourth-quarter fiscal 2014 (ended May
26, 2014) results before the opening bell on Jun 26. The company
had delivered a positive earnings surprise of 3.33% in the
preceding quarter. Let's see how things are shaping up prior to
Factors to Consider
ConAgra reported improved year-over-year results in the third
quarter of fiscal 2014. Adjusted earnings increased to 62 cents per
share from 55 cents in the year-ago quarter. Revenues rose 14.5%
year over year to $4.4 billion on the back of increased sales of
In the to-be-reported quarter, the Consumer Foods segment is
expected to record 7% fall in volumes, which will lead to lower
revenues. Additionally, the Private Brands segment is expected to
yield lower profits, negatively impacting total earnings. ConAgra
expects earnings per share to be 55 cents per share for fiscal
2014, from the prior projection of 60 cents. The company expects to
repay $550 million of debt, whereas operating cash flow generation
is estimated at $1.4 billion. It also plans to continue the annual
dividend payout of $1.00 per share.
Management is planning to take proactive measures like improving
product mix and promotion strategies in order to enhance volumes in
the Consumer Foods segment.
Our proven model shows that ConAgra is less likely to beat
earnings this quarter. That is because a stock needs to have both a
and a Zacks Rank #1, 2 or 3 for this to happen. That is not
the case here as we see below.
ConAgra's Most Accurate estimate stands at 55 cents, while the
Zacks Consensus is pegged slightly higher at 57 cents. Hence, the
Earnings ESP is -3.51%.
ConAgra has a Zacks Rank #4 (Sell) which lowers the predictive
power of ESP. 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
witnessed downward movement of estimates in the past seven days for
the upcoming quarter as well as for fiscal 2014.
Other Stocks to Consider
Here are some other companies in the industry that investors may
want to consider on the basis of our model, which shows that they
have the right combination of elements to post an earnings beat
The Hain Celestial Group, Inc.
) has Earnings ESP of +1.12% and a Zacks Rank #2 (Buy).
Campbell Soup Company
) has Earnings ESP of +2.04% and a Zacks Rank #3 (Hold).
Post Holdings, Inc.
) has Earnings ESP of +4.00% and a Zacks Rank #3.
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HAIN CELESTIAL (HAIN): Free Stock Analysis
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