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


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

To read this article on Zacks.com click here.

Zacks Investment Research

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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