Food products company,
ConAgra Foods, Inc.
) is set to report fiscal third-quarter 2014 results on Mar 20,
before the opening bell. In the last quarter, it delivered 12.73%
positive earnings surprise. Let's see how things are shaping up
for this announcement.
Factors to Consider
In the second quarter of fiscal 2014, ConAgra posted
impressive results. Earnings per share increased 9% year over
year to 62 cents, primarily due to a rise in sales. Revenues
increased 26% year over year to $4.7 billion on the back of
However, the company recently cut its quarterly guidance due
to a longer-than-expected delay in restoring the Private Brands
segment to planned levels of operating profit. The inordinate
delay was caused by dismal levels of customer service, pricing
and sales force coverage issues.Per the new guidance, adjusted
earnings per share in fiscal third-quarter 2014 are expected to
be 60 cents, while that for the fourth quarter is expected to be
65 cents. Ralcorp is expected to contribute 20 cents to fiscal
2014 earnings, down from 25 cents.
In the second half of fiscal 2014, volume decline for Consumer
Foods segment is expected in the range of 3%-4%, versus 1%-2%
expected earlier. In fiscal 2014, cash flow from operating
activities is estimated at $1.4 billion. The company expects to
repay $1.5 billion debt by fiscal 2015.
Our proven model does not conclusively show that ConAgra is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive Zacks
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as we see below.
Zacks Earnings ESP:
The Most Accurate estimate stands at 60 cents flat with the Zacks
Consensus Estimate. This translates to Earnings ESP of 0.00%.
ConAgra's Zacks Rank #4 (Sell) when combined with a 0.00%
Earnings 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 a negative estimate revision momentum.
Other Stocks to Consider
Here are 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:
Tyson Foods, Inc.
), Earnings ESP of +9.52% and a Zacks Rank #1 (Strong Buy).
Coca-Cola Enterprises Inc.
), Earnings ESP of +4.55% and a Zacks Rank #2 (Buy).
Mead Johnson Nutrition Company
), Earnings ESP of +1.09% and a Zacks Rank #3 (Hold).
CONAGRA FOODS (CAG): Free Stock Analysis
COCA-COLA ENTRP (CCE): Free Stock Analysis
MEAD JOHNSON NU (MJN): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
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