The J. M. Smucker Co.
) is set to report third-quarter fiscal 2014 results before the
opening bell on Feb 14. Last quarter, this food products
manufacturer posted a negative surprise of 4.40%. Let's see how
things are shaping up prior to the announcement.
Factors to Consider
The recent weakness in K-cup sales and price declines mainly
in coffee and peanut butter are concerns for Smucker.
Smucker's sales have been impacted by a decline in net price
realization over the last one year, mainly in coffee and peanut
butter. Though the company has benefited from the decline in
commodity costs, primarily owing to lower green coffee costs, the
lower pricing has more than offset the benefit.
Last quarter, the performance of the K-Cup business was below
the company's expectations, as sales of one of its K-cup brands,
Millstone K-Cup, declined significantly in the quarter, probably
due to increased competitive activity. The company also lowered
its K-Cup sales growth expectation to a mid-single digit percent
range for fiscal 2014 compared to its prior expectation of 15%
Our proven model does not conclusively show that Smucker is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is
not the case here as you will see below.
The Expected Surprise Prediction or ESP for Smucker is 0.00% as
both the Zacks Consensus Estimate and Most Accurate Estimate
stand at $1.67 per share.
Zacks Rank #4 (Sell):
Smucker's Zacks Rank #4 when combined with a 0.00% ESP makes
surprise prediction difficult. We caution against stocks with
Zacks Rank #4 and 5 (Sell rated stocks) going into the earnings
announcement, especially when the company is seeing negative
estimate revisions momentum.
Other Stocks to Consider
Other stocks in the consumer staples sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
J&J Snack Foods Corp
), with an Earnings ESP of + 2.67% and a Zacks Rank #2 (Buy).
), with an Earnings ESP of +1.18% and a Zacks Rank #2.
ConAgra Foods, Inc.
), with an Earnings ESP of +1.54% and a Zacks Rank #3 (Hold).
CONAGRA FOODS (CAG): Free Stock Analysis
J&J SNACK FOODS (JJSF): Free Stock Analysis
LORILLARD CO (LO): Free Stock Analysis Report
SMUCKER JM (SJM): Free Stock Analysis Report
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