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General Mills Earnings Preview: Will it Miss? - Analyst Blog
General Mills Inc. ( GIS ), a global consumer food company, is set to report fourth quarter and fiscal year 2013 results on Jun 26. Last quarter, it posted a 12.28% positive surprise. Let's see how things are shaping up for this announcement.
Factors to Consider this Quarter
General Mill's fourth-quarter 2013 earnings outlook is quite
weak with costs and taxes anticipated to rise. General Mills
expects fourth-quarter earnings to decline from the comparable
quarter last year, which witnessed 15% earnings growth due to
higher supply chain costs, increased spending to support in-store
merchandising and a higher tax rate.
Most of the estimates have been trending downwards, as a result of the expected decline in earnings in fourth quarter 2013.
Our proven model does not conclusively show that General Mills is likely to beat earnings this quarter. That is because a stock needs to have both a positive earnings expected surprise prediction or ESP (Read: Zacks Earnings ESP: A Better Method ) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Negative Zacks ESP: General Mills currently has an ESP of -1.85%.
Zacks Rank #3 (Hold) . General Mills' Zacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative 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
We also see likely earnings beats coming from these 3
companies from the same industry:
Chiquita Brands International Inc. ( CQB ), Earnings ESP of +26.83% and Zacks Rank #3 (Hold)
Diamond Foods, Inc. ( DMND ), Earnings ESP of +33.33% and Zacks Rank #3 (Hold)
Dole Food Company Inc. ( DOLE ), Earnings ESP of +9.09% and Zacks Rank #3 (Hold)
CHIQUITA BR INT (CQB): Free Stock Analysis Report
DIAMOND FOODS (DMND): Free Stock Analysis Report
DOLE FOOD CO (DOLE): Free Stock Analysis Report
GENL MILLS (GIS): Free Stock Analysis Report
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