Will Fortune Brands (FBHS) Beat Earnings? - Analyst Blog

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Fortune Brands Home & Security, Inc. ( FBHS ), the home and security products providing company, is slated to report fourth-quarter and full-year 2013 results on Jan 29, 2014. In the last quarter, it posted a positive surprise of 12.2%. Let's see how things are shaping up for this announcement.

Growth Factors this Past Quarter

The Ill-based company posted strong third-quarter 2013 results, driven by the spate of new construction in recent times and improvement in the Repair & Remodel market. The year-over-year increase in top line was primarily boosted by improvement in the housing market. Fortune Brands also registered double-digit sales growth across all of its segments with an improved adjusted operating margin mainly backed by a fall in selling, general & administrative (SG&A) expenses as a percentage of sales.

Earnings Whispers?

Our proven model does not conclusively show that Fortune Brands is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.

Negative Zacks ESP : ESP for Fortune Brands is -2.70%. This is because the Most Accurate estimate stands at 36 cents, while the Zacks Consensus Estimate is pegged at 37 cents.

Zacks Rank #4 (Sell) : Fortune Brands' Zacks Rank #4 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with a Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Stocks that Warrant a Look

Here are some other companies you may want to consider as our model shows these have the right combination of elements:

The Home Depot, Inc. ( HD ) has an Earnings ESP of +1.39% and a Zacks Rank #2 (Buy).

Abercrombie & Fitch Co. ( ANF ) has an Earnings ESP of +1.96% and a Zacks Rank #2 (Buy).

Texas Roadhouse, Inc. ( TXRH ) has an Earnings ESP of +4.35% and a Zacks Rank #2 (Buy).



ABERCROMBIE (ANF): Free Stock Analysis Report

FORTUNE BRD H&S (FBHS): Free Stock Analysis Report

HOME DEPOT (HD): Free Stock Analysis Report

TEXAS ROADHOUSE (TXRH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ANF , FBHS , HD , TXRH

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